Juno Therapeutics Shopping Spree Continues With $44 Million Buy

Published: Jun 02, 2015

Juno Therapeutics (JUNO) Shopping Spree Continues With $44 Million Buy
June 2, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

White-hot CAR-T darling Juno Therapeutics is at it again, announcing Tuesday it had acquired tiny Waltham, Mass. biotech X-BODY, Inc. for $44 million in order to build out its human antibody engineering toolbox. Juno paid $21 million in cash up front and shelled out 439,265 shares of its stock for the nine-person firm.

"The X-BODY acquisition brings protein engineering capabilities to Juno that meaningfully improve our ability to generate novel CAR T and TCR product candidates, which will help optimize potential therapies against both current and new targets," said Hans Bishop, CEO of Juno. "We are delighted to welcome our new Massachusetts-based employees, who have impressed us with the quality of their science and output since our partnership began in early 2014."

The move is the latest in a shopping spree by Juno, which has been riding high from its recent IPO. Less than a week ago Juno inked a massive $727 million deal with Editas Medicine, the gene editing company, for a partnership that will forge three research programs marrying Editas’ technologies, including CRISPR/Cas9, to Juno’s CAR and TCR technologies.

Under the terms of the deal, Juno will shell out $25 million up front and up to $22 million in research support over the next five years across the three programs. Editas will also be eligible to receive more than $230 million in future research, regulatory and commercial sales milestone payments. If any of these products come to market, Editas is also eligible to receive tiered royalties.

In the third week of May, Juno went shopping again, announcing that it would pay $59 million cash and a chunk of Juno stock, worth approximately $22 million, to buy up German cell therapy company Stage Cell Therapeutics.

Juno said it would make the upfront payment along with 486,279 shares of Juno stock to acquire the 95 percent of Stage it did not already own, as it bulks up its supply chain and adds Stage to its fast-growing stable of CAR and TCR companies.

"This important acquisition is driven by our strategy to have best in class process development and manufacturing capabilities in support of our goal of developing next generation CAR and TCR products," said Bishop at the time. "We welcome our new colleagues in Germany to the Juno family, and we look forward to working together to develop and commercialize best in class therapies."

A month ago San Diego, Calif.-based biotech Fate Therapeutics surged more than 80 percent on news that the company had inked a $60 million deal with Juno.

That deal will have Fate study small molecules in an effort to boost Juno's genetically-engineered T cell product candidates and turbocharge their effectiveness against cancer. Under its terms, Juno will pay Fate $5 million upfront and purchase one million shares of Fate common stock at $8 per share, as well as fund all mutual collaboration activities for an exclusive four-year research term.

“For each product developed by Juno that incorporates modulators identified through the collaboration, Fate is eligible to receive approximately $50 million in target selection fees and clinical, regulatory and commercial milestones, as well as low single-digit royalties on sales,” said the companies in a statement.

Under the terms of the deal announced today, during the four-year partnership, Fate will be responsible for screening and identifying small molecules that modulate the biological properties of engineered T cells. Juno will be responsible for the development and commercialization of engineered T cell immunotherapies that use Fate’s advances.

Juno also has the option to extend the deal for an additional two years, as long as it pays an undisclosed amount.

"A deep understanding of T cell biology is the basis of Juno's approach to creating best-in-class cellular immunotherapies," said Bishop. "Partnering with Fate Therapeutics, and accessing its strong science and leading platform for modulating the properties of immunological cells, enables interrogation of new avenues of T cell manipulation and provides an opportunity to enhance the therapeutic profile of our genetically-engineered T cell product candidates."

Through the four-year research and development collaboration, Fate will be responsible for screening and identifying small molecules that modulate the biological properties of engineered T cells. Juno will be responsible for the development and commercialization of engineered T cell immunotherapies incorporating Fate's small molecule modulators.

Juno has been growing by leaps and bounds. It said in mid-March that it will look for new headquarters in Seattle, and will be looking for new hires well into 2015.

Juno has ballooned from 10 employees at the beginning of 2014 to 123 employees now and currently occupies 23,200 square feet of office and lab space at 307 Westlake Ave. N. in South Lake Union.

"During the past year, we have made significant progress in building a world class science and clinical organization. We have leveraged our CAR and TCR technology platform to continue to develop cellular therapeutics with the potential to meaningfully improve the lives of patients with cancer," said Bishop, Juno's chief executive officer.

"Our successful rounds of private financing, together with our IPO, have provided us with the financial resources that we need to continue advancing our product candidates. Within the next 12 months, we expect to have 10 product candidates in clinical development directed at six different cancer-associated antigens."

As part of that massive growth, Juno said in a statement that it expects to burn between $125 million and $150 million in cash in 2015, excluding cash inflows or outflows from business development activities and ongoing litigation.

The company has seen ups and downs in its journey through the public markets. Juno surprised the analysts and investors alike in January when it announced it will have 10 therapeutic candidates for six different diseases in clinical trials by end of 2015, a massive push into the market that was unexpected by even its most bullish supporters.

Bishop told attendees at the J.P. Morgan Healthcare Conference that it has data for endogenous T cells that can reach cancer cells in all tissue types, with efficacy in high rate of response in patients.

Juno joined a long list of gene therapy biotechs attempting to IPO this year; the company uses human T cells to help fight cancer. Its main therapies are based on T Cell Receptors (TCR) and Chimeric Antigen Receptors (CAR) and include chimericantigen receptor drug candidates JCAR 014, JCAR015, and JCAR017.

Interim ASH data hasn’t quite shown an improved clinical profile for its experimental therapies -017, -014 with defined cell composition (CD4/8), but Bishop was excited about the company’s next-generation “armored" chimeric antigen receptors to combat the tumor microenvironment, specifically IL-2 secreting area. Juno has bispecific CARs that can regulate the tumor’s on/off switches, said Bishop.

“The real prize here is obviously success in solid tumors,” he told the audience.

Juno has been riding high since its initial public offering Dec. 19. The stock’s opening price was $24 per share, which skyrocketed $60 the first day of trading. The company adjusted its set price several times prior to the IPO, first filing with the U.S. Securities and Exchange Commission between $15 and $18, then updating to between $21 and $23.

Bishop alone raked in $100 million for his 3 percent. Other stakeholders include Robert Nelson, who made $450 million, and Seattle’s Fred Hutchinson Cancer Research Center, who pocketed a tidy $153.6 million.

In addition, two funds, CL Alaskan and JT Line Partners, have a combined 31 percent stake. Their portion of Juno is now worth more than $1 billion. The spinoff from Fred Hutchinson, Memorial Sloan-Kettering Cancer Center and Seattle Children’s Research Institute had Goldman, Sachs & Co., J.P. Morgan and Morgan Stanley as lead bookrunners on the deal.



Will PfizerKline Become the Next Pharma Player?
The speculation surrounding a possible bid from Pfizer Inc. for struggling GlaxoSmithKline is heating up, after one closely-watched biotech analyst said in a note last week that Pfizer buying the company would “unlock access to its balance sheet and improve its tax situation.”

Gregg Gilbert, a biotech analyst at Deutsche Bank, wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.

“We believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals,” Gilbert wrote. “Since media reports in the past have pointed to the potential for a Pfizer/GSK combination, we are revisiting that theme.”

We want to know, dear readers, if you agree? Should Glaxo continue going it alone, or might Pfizer buy it and create one of the world’s largest pharma players in history?

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