How Juno's CEO Broke the $9B M&A News to Employees
Juno Chief Executive Officer Hans Bishop sent a company-wide email informing employees of the $9 billion deal. In the email, which was obtained by the Puget Sound Business Journal, Bishop called the acquisition “a very big step in the evolution” of Juno Therapeutics. In the email, Bishop explained the deal with Celgene, which already had a significant stake in the company, will mean for its future. His email did not hint at any planned layoffs but did tell employees that there were some questions he did not yet have an answer to. What those questions are he did not say in the email.
“I promise that the leadership team will provide you with accurate and timely information as we are able and will be here for you through this change,” Bishop said in the email.
In a separate email to company partners and vendors, Bishop explained that Juno would keep its name and operate as a wholly-owned subsidiary of Celgene. He said the company would remain in all of its locations. Bishop also said that the company would continue to grow and its hiring plans remain unchanged.
In yet a third email sent to “certain scientific founders,” Bishop said an important impetus for making the deal with Celgene is a “belief that progress within the cell therapy field is going to accelerate and the resources required to compete are going to increase significantly.” Furthermore, Bishop told the scientific founders that the company believes the merger with Celgene will both “accelerate and derisk” the company’s progress going forward.
Celgene acquired Juno a little more than two years after taking a $1 billion stake in the immuno-oncology company. Celgene pulled the trigger several months after the U.S. Food and Drug Administration approved the first CAR-T therapies for blood-based cancers. In its Monday announcement of the deal, Celgene said it believes Juno’s JCAR017 CAR-T therapy targeting relapsed and/or refractory diffuse large B-cell lymphoma (DLBCL) will be up for regulatory approval by 2019. The company issued a bullish statement claiming that JCAR017 has potential global peak sales of approximately $3 billion. Celgene said the addition of Juno to its umbrella will strengthen its position in hematology and will provide economic drivers beyond 2020.
In his email to employees, Bishop said Juno has ended one chapter but has started “a new and equally exciting one.”
“We can go about our work with increased resources and do even more with our quest of changing medicine for good,” Bishop said in his email.
Shares of Juno jumped upon news of the acquisition. It spiked from Friday’s close of $68.40 to a high Monday of $86.26.
Shares of Celgene dipped slightly on Monday after the deal was announced, but then climbed steadily throughout the day to close at $103. Shares continue to climb this morning and are sitting at $105.36 as of 10:30 a.m. Canaccord Genuity analyst John Newman said there is still room for Celgene to grow up to $140 per share. In a note this morning he said Celgene still has a strong enough balance sheet to support additional acquisitions even after Juno. Celgene started the year with a $7 billion deal for San Diego-based Impact Biomedicines. Newman added that Celgene’s partnership with bluebird bio for bb2121, a CAR-T treatment for multiple myeloma could also drive share prices higher.