Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

"As we are fond of saying in our offices, 2016 is the year of Kite," the company's CEO Arie Belldegrun said on a February 29 earnings call. 

It's the sort of wince-inducing corporate platitude that maybe should have stayed in the offices. But it might be true in this case.

Kite wants to be first to market in a highly competitive race in CAR T therapy, an ambitious new type of cancer treatment that uses engineered human immune cells to attack cancer. CAR T may finally graduate from a massively hyped and potentially curative but distant treatment idea to approved medicine by next year. Kite shares rose 21.74 percent last week on an optimistic outlook from the company, outpacing what has looked like a nascent turnaround in biotech stocks (if you squint).

After a start to the year full of risk aversion in the sector, any investor willingness to bet on a still very uncertain outcome is a much-needed positive sign.

Flying High
Investors are starting to believe in Kite's ambitious treatment for blood cancer, sending shares up. Performance indexed to 100.

Kite's main competitors are Seattle biotech Juno Therapeutics and Swiss pharma giant Novartis. Each company is targeting a different blood cancer. There are other companies with big investments in the area, including Bluebird Bio, Bellicum, Cellectis, and Ziopharm, but they lag behind in getting to market. Juno hopes to get its treatment approved as soon as 2017, while Novartis expects to file for approval that year.  

If Kite can stick to its aggressive timeline, then it may get to market first. It said on its earnings call it expects results from a pivotal study of its furthest-along drug early in the second half of the year, which should put it in a position to file with the FDA by the end of 2016. That could lead to an approval in 2017. Kite is initially targeting non-Hodgkin lymphoma, the largest market of the three companies. 

But this is not a risk-free bet. Study results for Kite's treatment, built on science developed by the National Cancer Institute, have been impressive so far, but are based on a very small sample size. There's a risk that treated patients might relapse, or that results of the crucial next trial will disappoint. 

And there are regulatory issues. This a whole new world for the FDA, a brand new type of individually manufactured cancer treatment, and no one knows exactly how the agency will approach it. Other companies are working on so called "off the shelf" approaches, which use modified donor cells instead of a patient's own. That approach, if it works, might lower costs, increase speed of treatment, and supplant the individual approach used by Kite. And no one quite knows how to price or reimburse one-time potentially curative treatments. 

Long-term and risky biotech bets haven't exactly been popular with investors this year. But markets appear willing, at least in Kite's case, to start buying on potential again.  

Kite has enough cash -- despite accelerating spending -- to last until at least 2018, even without product revenue. The company has a wide-ranging research partnership with biotech giant Amgen, giving it both credibility and extra cash to fund research. And even though all eyes are on its lead drug candidate, it has been actively working on the next generations of this general area of therapy, including programs that target solid tumors.

Cash to Burn
Kite's cash pile should fund its R&D and operations through at least 2018.
Source: Bloomberg

The most optimistic case for Kite is that, if it gets an approval, or if one looks likely, then investors might significantly upgrade the value of its pipeline and see it as a cell-therapy powerhouse. Such dreams seduced investors during biotech's five-year bull run, but seem Pollyanna-ish now. A commercial launch of its first treatment alone will be difficult and expensive. And Juno looms with an even bigger cash pile, a high-profile partnership with Celgene and a big pipeline program of its own.

Kite is still down 10 percent for the year. It's a good sign that investors are jumping back on board, and 2016 might indeed be the "Year of Kite." But investors should be cautious about cell therapy in general and about this already crowded first race in particular.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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Mark Gongloff at