An Open Letter to Sell-Sider Backtracking on Kite Pharma Questions

Dear Tom Shrader:

Did the management team at Kite Pharma (KITE) yell at you? Did your boss at Stifel Nicolaus yell at you? I ask because I'm interested in hearing the explanation for your "I'm sorry" research note on Kite published Tuesday.

I much preferred the research note on Kite you wrote on Monday. That report read like a refreshingly honest take on a cancer immunotherapy stock you like but have some legitimate concerns about. You were right to point out the risks involved in the phase III study of the company's lead CAR-T therapy KTE-019. Kite is enrolling very sick patients into this trial, so a death shouldn't come as a surprise. And yes, Kite's management team shouldn't be releasing quarterly results on a Friday after the market closes. Thank you for dinging them -- gently -- on that amateur-hour investor relations strategy.

You balanced your concerns about Kite with praise for the company's cancer immunotherapy platform and willingness to be "bold." You didn't downgrade Kite or change your price target. Again, Monday's research report came across as something written by a Kite bull who can see the value in offering criticism and understanding that risks don't disappear just because we're living through a biotech bull market.

In other words, you were wearing your rational investor hat. Well done.

All this makes your follow-up Kite report published on Tuesday all the more inexplicable. You offer an apology of sorts, writing that Monday's note "may have been confusing and incorrectly perceived as negative."

Ouch. It sounds like you got your ass chewed off by someone who didn't bother to read or comprehend everything you wrote on Monday. Pardon me for being so blunt, but Tuesday's mea culpa reads like a sell-side analyst kowtowing to the whims of his investment banking bosses. Maybe I'm wrong, but it certainly comes across as just that.

And that's a shame. I liked Monday's Tom Shrader much better, and I bet investors appreciated that person even more.

Adam

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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