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Juno (JUNO) Reports Second Quarter 2017 Financial Results



8/4/2017 7:52:45 AM

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SEATTLE--(BUSINESS WIRE)--Juno Therapeutics, Inc. (NASDAQ: JUNO), a biopharmaceutical company developing innovative cellular immunotherapies for the treatment of cancer, today reported financial results and business highlights for the second quarter 2017.

It has been a historic last several months for the CAR T field, highlighting the potential of these therapies for patients. Juno is well-positioned to make a major impact, particularly with the potential best-in-class profile emerging for JCAR017,” said Hans Bishop, Juno’s President and Chief Executive Officer. “We look forward to starting the pivotal cohort for JCAR017 this quarter as well as expanding the use of this drug into broader populations over the coming year.”

Second Quarter 2017 Highlights

Clinical Update:

  • JCAR017 in DLBCL - Investigators presented interim results at the American Society of Clinical Oncology and International Conference of Malignant Lymphoma meetings in June 2017 from the Phase I TRANSCEND study in patients with r/r diffuse large B cell lymphoma (DLBCL) who were treated with fludarabine/cyclophosphamide (flu/cy) lymphodepletion and JCAR017. The core group (N=44) includes patients that represent the population that Juno plans to move forward with for the pivotal cohort. The core group includes patients with DLBCL (de novo and transformed from follicular lymphoma) that are ECOG Performance Status 0-1. Topline results for both dose levels for the core group as of a data cutoff date of May 4, 2017 included:
  • Overall response rate (ORR) was 86% (38/44) and the complete response (CR) was 59% (26/44).
  • Three-month ORR was 66% (21/32) and CR was 50% (16/32). Of patients in response at three months, 90% (9/10) continued in response at six months.
  • Early data suggested a dose response relationship at three months with dose level 2 (100 million cells) ORR of 78% (7/9) and CR of 56% (5/9) as compared to dose level 1 (50 million cells) ORR of 58% (11/19) and CR of 42% (8/19).
  • 97% (37/38) of responding patients were alive and in follow-up as of data cutoff date.
  • 2% (1/44) experienced severe CRS and 18% (8/44) experienced severe NT.
  • 66% (29/44) did not experience any CRS or NT. No deaths were reported from CRS or NT.

Corporate News:

  • Hired key talent to our leadership team, including the appointment of Sunil Agarwal, M.D. as President of Research & Development. Dr. Agarwal is responsible for the execution of Juno’s drug development pipeline, integration of translational insights into ongoing programs, and the prioritization of research and development initiatives.
  • Appointments to Board of Directors of Jay Flatley, Executive Chairman of Illumina, Inc. and Rupert Vessey, MA, BM BCh, FRCP, DPhil, Celgene Corporation's President of Research and Early Development.

Second Quarter 2017 Financial Results

  • Cash Position: Cash, cash equivalents, and marketable securities as of June 30, 2017 were $801.8 million compared to $850.7 million as of March 31, 2017 and $922.3 million as of December 31, 2016.
  • Cash Used in Operating Activities and Capital Expenditures: For the second quarter of 2017 cash used in operating activities was $38.0 million and cash used for capital expenditures was $21.8 million, compared to $2.2 million provided by operating activities and $7.4 million used for capital expenditures for the same period in 2016.
  • Cash Burn: Cash burn, which is cash used in operating activities and capital expenditures, excluding cash inflows and outflows from upfront payments related to business development activities, was $59.8 million in the second quarter of 2017, of which $56.9 million was operating cash burn and $2.9 million was cash burn for capital expenditures, compared to cash burn of $5.2 million, of which $2.2 million was an operating cash inflow and $7.4 million was cash burn for capital expenditures for the same period in 2016. For purposes of comparing the operating cash burn and cash burn for capital expenditures to the Company’s financial guidance, a cash inflow of $18.9 million for a tenant improvement allowance was reclassified from operating activities to capital expenditures. The increase in cash burn of $54.6 million was primarily driven by the $50.0 million cash inflow from Celgene in the second quarter of 2016 related to the CD19 License.
  • Revenue: Revenue for the three and six months ended June 30, 2017 was $21.3 million and $40.6 million, respectively, compared to $27.6 million and $37.4 million for the three and six months ended June 30, 2016, respectively. The decrease in the three months ended June 30, 2017 compared to the prior year period was due to milestone revenue recognized in the second quarter of 2016 in connection with the Novartis sublicense agreement. The increase in the six months ended June 30, 2017 compared to the prior year period was primarily due to revenue recognized under our Celgene Collaboration Agreement and Celgene CD19 License for the upfront license fee and partial reimbursement by Celgene of research and development costs incurred by us in the first and second quarters of 2017, offset by milestone revenue recognized in the six months ended June 30, 2016 related to the Novartis sublicense agreement.
  • R&D Expenses: Research and development expenses for the three and six months ended June 30, 2017, inclusive of non-cash expenses and computed in accordance with GAAP, were $101.1 million and $184.0 million, respectively, compared to $72.3 million and $146.0 million for the three and six months ended June 30, 2016, respectively. The increases in 2017 compared to 2016 were primarily due to increased costs to manufacture Juno's product candidates, execute on Juno's clinical development strategy, and expand its overall research and development capabilities, an increase in expense related to its success payment and contingent consideration obligations, expense incurred for the amortization of the intangible asset associated with the AbVitro, Inc. ("AbVitro") acquisition, and an increase in non-cash stock-based compensation expense. These increases were offset by a decrease in milestone expense.
  • Non-GAAP R&D Expenses: Non-GAAP research and development expenses for the three and six months ended June 30, 2017 were $77.8 million and $152.2 million, respectively, and include $10.1 million and $19.8 million of stock-based compensation expense, respectively. Non-GAAP research and development expenses for the three and six months ended June 30, 2016 were $72.1 million and $152.3 million, respectively, and include $8.9 million and $18.0 million of stock-based compensation expense, respectively. Non-GAAP research and development expenses for the first half of 2017 exclude the following:
  • An expense of $17.2 million and $24.6 million for the three and six months ended June 30, 2017, respectively, associated with the change in the estimated fair value and elapsed service period for Juno’s potential success payment liabilities to Fred Hutchinson Cancer Research Center ("FHCRC") and Memorial Sloan Kettering Cancer Center ("MSK").
  • Non-cash stock-based compensation expense of $0.9 million and $1.6 million for the three and six months ended June 30, 2017, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.
  • An expense of $2.4 million for the three and six months ended June 30, 2017 associated with amortization of the intangible asset recorded in connection with the AbVitro acquisition.
  • An expense of $2.7 million and $3.2 million for the three and six months ended June 30, 2017, respectively, associated with the change in the estimated fair value of the contingent consideration liabilities recorded in connection with the Stage and X-Body acquisitions.

Non-GAAP research and development expenses for the first half of 2016 exclude the following:

  • An expense of $3.5 million for the three months ended June 30, 2016 and a gain of $3.1 million for the six months ended June 30, 2016 associated with the change in the estimated value and elapsed service period for Juno’s potential success payment liabilities to FHCRC and MSK.
  • Non-cash stock-based compensation expense of $1.2 million and $2.4 million for the three and six months ended June 30, 2016, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.
  • A gain of $4.5 million and $5.5 million for the three and six months ended June 30, 2016, respectively, associated with the change in the estimated fair value of the contingent consideration liabilities recorded in connection with the Stage and X-Body acquisitions.
  • G&A Expenses: General and administrative expenses on a GAAP basis for the three and six months ended June 30, 2017 were $23.6 million and $44.3 million, respectively, compared to $16.8 million and $32.8 million for the same periods in 2016. The increases in 2017 compared to 2016 were primarily due to an increase in consulting and other expenses to support the growing organization including costs related to commercial readiness, increased personnel expenses primarily related to increased headcount to support the business, and an increase in stock-based non-cash compensation expense. The increases in the six month period were partially offset by decreased business development expenses. General and administrative expenses include $6.9 million and $13.0 million of non-cash stock-based compensation expense for the three and six months ended June 30, 2017, respectively, compared to $5.5 million and $10.4 million for the three and six months ended June 30, 2016.
  • GAAP Net Loss: Net loss for the three and six months ended June 30, 2017 was $100.7 million, or $0.96 per share, and $182.9 million, or $1.76 per share, respectively, compared to $64.8 million, or $0.64 per share and $135.9 million, or $1.35 per share, for the three and six months ended June 30, 2016, respectively.
  • Non-GAAP Net Loss: Non-GAAP net loss, which incorporates the non-GAAP R&D expense, for the three and six months ended June 30, 2017 was $77.5 million, or $0.74 per share, and $151.1 million, or $1.45 per share, respectively, compared to $64.6 million, or $0.64 per share, and $142.1 million, or $1.41 per share for the three and six months ended June 30, 2016, respectively.

Reconciliations of cash burn to GAAP cash used in operating activities and capital expenditures, non-GAAP net loss to GAAP net loss, and non-GAAP R&D expense to GAAP R&D expense are presented below under “Non-GAAP Financial Measures.”


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