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Gilead (NASDAQ:GILD) acquired Kite Pharma for $12 billion, and the novel CAR-T therapy received FDA approval within months. For a while, it seemed like Gilead would have the U.S. CAR-T market all to itself. However, Novartis’s (NYSE:NVS) Kymriah was recently approved by the FDA to treat large B-cell lymphoma:

U.S. regulators approved Novartis’ cell therapy Kymriah for treatment of patients with a second type of blood cancer, large B-cell lymphoma, that has worsened despite two or more earlier lines of therapy, the Swiss drugmaker said on Tuesday.

The new indication puts Kymriah in direct competition with Gilead Sciences’ Yescarta, which was approved by the U.S. Food and Drug Administration in October for treatment of adults with diffuse large B-cell lymphoma who have failed to respond to other treatments.

Both Kymriah and Yescarta are chimeric antigen receptor T-cell therapies, or CAR-Ts, which reprogram the body’s own immune cells to recognize and attack malignant cells.

Kymriah, given as a one-time treatment, was approved in August for patients up to age 25 with acute lymphoblastic leukemia, the most common form of childhood cancer in the United States.

Kymriah could stymie sales of Yescarta, one of the few remaining catalysts Gilead possesses. Below, I will parse through the implications of Kymriah’s U.S. arrival.

The Situation

The Kite Pharma acquisition received a lot of fanfare from GILD bulls. When the deal was completed in August 2017, Kite’s revenue was expected to be approximately $200 million in 2018 and to grow to about $1.2 billion by 2021. Yescarta’s $1.2 billion of peak annual revenue paled in comparison to Gilead’s HCV revenue, which was generating $2.9 billion per quarter. I thought Gilead’s prospects were still dim amid its shrinking HCV franchise. Read more:

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