June 2, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Closely followed immunotherapy Juno Therapeutics leapt more than 15.3 percent in afternoon trading Tuesday after the chief executive of pharma behemoth AstraZeneca PLC told Bloomberg it might be in the market for a cancer therapy company.
AstraZeneca’s CEO Pascal Soriot made the comments as an answer to whether the firm would be interested in a company like Juno, that uses the body’s own immune system to fight disease.
“If at some point we conclude we need to make an acquisition, we certainly would consider it, there’s no question about it,” Soriot told the news service.
He stressed that as of now, no deal was on the immediate horizon.
“At this stage, we have a lot on our hands,” Soriot said. “We have a full portfolio of immunooncology assets; our strategy has been, with CAR-T, to partner.”
AstraZeneca is already partnered with Juno on a project that weds its own immune therapy drug to Juno’s CAR-T technology. CAR-T is an acronym for chimeric antigen receptor therapy, which rewires a patient’s own immune system T-cells to kill cancer cells. But that type of immunotherapy sometimes backfires, in some instances even killing patients.
Soriot told Bloomberg he’d want any potential side effects worked out before any acquisition could be made.
“The CAR-T technology has a lot of promises; we also need to find a way to manage the side effects,” he said. “They can be hard to predict and they can be quite substantial.”
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.
Juno CEO Hans 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.
As a result, 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 CEO Bishop.
"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.
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?
