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As Juno Therapeutics (JUNO) and Kite Pharma (NASDAQ: KITE) ramp up for a 2017 or early 2018 launch of their lead CAR-T therapies, investor caution is advised. Although the companies' cancer-killing immune cell therapies represent an exciting leap forward in cancer treatment, both companies are approaching pivotal FDA decisions, which could make or break these stocks. 

The pot of gold at the end of the rainbow is huge -- peak sales estimates of CAR-T therapies run up to $10 billion annually. But these therapies are highly unusual, they have a nasty track record for toxicity, and it's hard to know how regulators will view them.

There's one more big gotcha looming. The FDA will be making its decision based on data that isn't robust for either company. Kite reportedly will base its FDA filing on a Phase II data set of 51 patients, followed for three months. Juno's candidate therapy's Phase II trial is still recruiting, and data is very slim.

Here's a closer look at why investor skepticism (as well as some guarded optimism) could be in order.

Juno is behind on its launch date, but it may have better data

In early July, Juno's stock took a wild, 180-degree turn after a critical study for its lead CAR-T therapy was halted. Other CAR-T companies got caught up in the volatility and promptly tanked. The issue was the deaths of several trial participants from neurotoxicity. Juno quickly linked the tragic fatal reactions to chemo agent fludarabine, used in the CAR-T pre-conditioning regimen. The FDA had put a temporary hold on the trial, but it lifted it a few days later, when Juno modified the trial.

Before the deaths, Juno's goal was accelerated FDA approval in 2017, and launch immediately following. But Juno's CEO Hans Bishop said the need to modify the trial to avoid toxic effects would delay the filing and hoped-for launch. The first half of 2018 is the new launch date for the Juno therapy for acute lymphoblastic leukemia (ALL).

Based on very preliminary data, the drug, JCAR015, appears to be extremely effective. Its Phase 1 trial showed a complete remission rate of 89% in ALL. Juno is now recruiting for its Phase II ROCKET trial for the therapy.

The real deal in leukemia

Meanwhile, investors should take heart that both Juno and Kite both have multiple shots on goal. A failure with a lead therapy could actually pave the way to a later success. For instance, on September 7, Juno Therapeutics released an update on its second-generation CAR-T therapy, JCAR014. Over 50% of the patients in an earlier study still showed a complete response, meaning they remain without any traces of cancer.

Juno also is developing JCAR017, which could be a game-changer in leukemia. In a Phase 1 study, JCAR017 notched a stunning 93% response in children and teens, even without preconditioning. With preconditioning, complete remission occurred in a breathtaking 100%.

Kite on track for 2017 launch, but data set is fragile

Thanks to Juno's delay, Kite Pharma will likely be the first company to file for FDA approval of a CAR-T therapy. First-mover status typically conveys a huge advantage, so if that actually happens, expect some rocket action for Kite.

Investors need to be watching for the results of Zuma-1. The study is crucial because its data will form the basis for an approval filing with the FDA before the end of the year. Zuma-1 is being carried on at multiple testing sites and is targeting patients with an aggressive type of Non-Hodgkin's lymphoma (NHL).

KTE-C19's filing will be based on top-line data on the first 51 patients treated. Kite's CMO, David Chang, said, "Based on the feedback that we have received from the FDA, we are very much on track for submitting the BLA [Biologic License Application] by year end." If the FDA approves the therapy based on that data, it would set Kite up for a 2017 launch.

Now, some good news

Whatever happens, neither of these companies is going it alone. Juno has a validating partner in Celgene, who jumped in with $1 billion to start a collaboration a year ago. Kite has various collaborations with well-regarded research centers, such as the National Cancer Institute, as well as Swiss pharma Roche Holdings working on a combo drug treatment with Kite's lead product, KTE-C19.

In addition, both companies have accelerated approval status, so regulators' decision can be based on phase 2 trials. But these studies more typically involve up to around 300 people, and with several fatalities already occurring, the FDA will need a thorough justification that the benefits of these treatments outweigh the known risks before approval.

Bottom line? I'm hoping these therapies make it through the FDA gauntlet, especially for the sake of the thousands who are fighting intractable leukemias and lymphomas. But CAR-T therapy is still in early innings, and I'm not holding my breath for an easy victory.