May 4, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SANTA MONICA, Calif. -- Arie Belldegrun, Kite Pharma, Inc. ’s chief executive officer, exercised stock options valued at $95 million just two months prior to going public, Bloomberg reported this morning.
Belldegrun exercised his 2.18 million options at $1.35 per share and 70 cents per share. He spent $2.7 million purchasing the shares, Bloomberg said. By exercising his options before the initial public offering in June 2014, Belldegrun, who founded Kite in 2009, was eligible to tax future appreciation of the stocks as a capital grain, rather than income, the news agency said. Bloomberg noted “appreciation in value between grant and exercise of option awards is taxed as income -- a 39.5 percent rate in the top bracket. Appreciation between exercise and sale is treated as capital gains -- 20 percent in the top bracket.”
When the company went public, shares started at $17.
For fiscal year 2014 Belldegrun was awarded a pay package of $95.2 million, which made him the seventh highest-paid U.S. executive, Bloomberg reported.
Although Kite fell short of expectations when the company released its 2014 annual financial report in March, analyst are still predicting a good year for 2015. Analysts at Canaccord Genuity set a $90 price target on Kite shares in April, while analysts at Credit Suisse set a target of $79. Both groups rated the stock a “buy,” WKRB reported. Kite Pharma stocks showed an increase in early trading today, at $53.77 per share, more than two points above the open of $51.51 per share.
Kite has partnerships with the National Institute for Clinical Excellence (NICE) and Amgen to develop therapies that engineer white blood cells to fight cancer. Under the agreement , which netted Kite a $60 million upfront payment earlier this year, Kite will leverage its CAR platform, research and development and manufacturing capabilities to develop and commercialize a next generation of novel CAR T cell immunotherapies.
In the first half of 2015, Kite said it plans to initiate its first pivotal study of its lead product candidate, KTE-C19, under its investigational new drug application in refractory diffuse large B cell lymphoma.
Last year Kite acquired Netherlands-based TCF, which was renamed Kite Pharma EU, establishes a European presence for Kite operations. The transaction allows Kite to expand its product pipeline of TCRs for the treatment of solid tumors, complementing its CAR pipeline.
In a statement Belldegrun said the IND, the agreement with Amgen and its acquisition “will further drive the expansion of both our chimeric antigen receptor (CAR) and TCR portfolio.”
Will Hungry Pfizer Make a Play for Struggling GlaxoSmithKline?
Almost a year after its $119 billion offer for AstraZeneca PLC fell apart in the face of massive opposition from regulators and internal dissent, global drugmaker Pfizer Inc. is once again being floated as a potential buyer of another marquee-name British pharmaceutical company: GlaxoSmithKline . We at Biospace want to know your thoughts: With cash to burn, will Pfizer go hunting for Glaxo?
