Juno Therapeutics Stock Soars After Celgene Acquires $1 Billion Stake in Seattle Company
June 29, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SUMMIT, N.J. – Celgene Corporation has acquired a $1 billion stake in Seattle-based Juno Therapeutics as the two companies entered into a 10 year collaborative agreement to leverage combined immunology and oncology expertise to develop treatments for cancer and autoimmune diseases.
The companies jointly announced the collaborative agreement to leverage T cell therapeutic strategies Monday afternoon. The collaboration will have with an initial focus on Chimeric Antigen Receptor Technology (CAR-T) and T Cell Receptor (TCR) technologies, the companies said. soared in afterhours trading Monday, hitting a high of $64 after the stock closed at $46.61.
Hans Bishop, chief executive officer of Juno, said Celgene is a natural partner and will help Juno realize the full potential of clinical research, while still maintaining a level of independence to explore other business possibilities that “pop up.” Bishop said he thinks the scientific synergy between the two companies will allow them to advance the therapeutic pipelines of both Juno and Celgene.
“Celgene has leading small molecule and protein capabilities that complement Juno’s advanced engineered T cell capabilities,” Bishop said on a conference call.
Additionally, the collaboration thrusts Juno into the top tiers of immunooncology drugmakers, Bishop said. Bob Hugin, Celgene’s chairman and CEO, touted Juno’s capabilities. He said the early clinical data of Juno’s CAR-T approaches is impressive. He said the investment is giving Celgene upsides to its existing financial targets.
Under terms of the deal, Celgene will pay approximately $1 billion, which includes a $150 million upfront payment and an agreement to purchase slightly less than 9.1 million shares of stock at $93 per share. Celgene will have the option to be the commercialization partner for Juno’s oncology and cell therapy auto-immune product candidates, including Juno’s CD19 and CD22 directed CAR-T product candidates.
Juno will be responsible for research and development in North America and will retain commercialization rights in those territories. Celgene will be responsible for development and commercialization in other Europe, Asia, emerging markets and the rest of the world. Celgene will pay Juno a royalty on sales in those territories. Additionally, Celgne will be eligible to select two programs, excluding CD19 and CD22, to be subject to a global profit sharing agreement under which the companies will share worldwide expenses (with the exception of China) and profits equally.
Over the course of the next 10 years Celgene will have the option to purchase additional equity in Juno, and own up to 30 percent of the company. The transaction is expected to be completed by the end of the summer.
Hugin said the Juno deal is the third significant partnership over the past six months and expects to see revenue form the collaborations by 2020. In April, Celgene Corporation struck two deals with other pharmaceutical companies with a combined value of $110 million to advance its oncology platform, continuing the cancer drugmaking company’s deal making trend to advance its oncology pipeline. Celgene entered into an $80 million agreement with Agios Pharmaceuticals, Inc. to develop AG-881, a small molecule that has shown in preclinical studies to fully penetrate the blood brain barrier and inhibit isocitrate dehydrogenase-1 (IDH1) and IDH2 mutant cancer models. Celgene also announced today it struck a $30 million agreement with one-year-old Canada-based Northern Biologics to advance that company’s work in oncology and fibrosis therapeutics.
Also in April, Celgene entered into a collaborative agreement with AstraZeneca PLC that will allow the U.S.-based drug firm to develop MEDI4736, AstraZeneca’s immunotherapy treatment for blood cancer.
In 2014 Celgene entered into 10 deals, shelling out an average of $222 million in upfront payments to its partners. Juno is developing cell-based cancer immunotherapies based on chimeric antigen receptor and high-affinity T cell receptor technologies to genetically engineer T cells to recognize and kill cancer. JCAR015 is Juno’s chimeric antigen receptor product candidate indicated for the treatment of relapsed or refractory B-cell acute lymphoblastic leukemia. JCAR015 is currently the subject of a Phase I trial, which is designed to determine the safety and appropriate dose of modified T cells in patients. Chimeric antigen receptor technology employs the body’s immune system to attack cancer cells. JCAR014, JCAR016 and JCAR017 are also Juno CAR-T cell product candidates in current levels of testing.