March 19, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Juno Therapeutics will look for new headquarters in Seattle, its chief executive said on an earnings call this week, and the company has confirmed that it will be looking for new digs, and possibly new hires, well into 2015.
The freshly IPO’d biotech darling 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. A spokesman for Juno declined to specify where it might move or how much space it is hoping to find.
The gene therapy company briefly disappointed market watchers late Wednesday after its first earning report said the company expects to burn through at least $140 million in cash during its first year as a public firm, but its share price has since rebounded to a healthy $59.68 at Thursday’s New York close.
“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 Hans 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.
“Juno enters 2015 financially strong and prepared to support the initiation of clinical trials for multiple product candidates targeting an array of antigens, our planned Phase II trial of JCAR015, and other milestones,” said Steven M. Harr, chief financial officer of Juno. “Our financial guidance for 2015 provides evidence of our commitment to patients and to investors to deliver on our business strategy, to spend prudently, and to invest in the innovation and development of therapies that re-engage the immune system to fight cancer.”
Investors and Wall Street have been watching closely to see if the gene therapy company has been able to live up to its hype. Juno’s shares closed at $52.49 Monday, a major leap from its IPO price of $24, but down from its historic high of $61 a share, but significantly in early trading Thursday.
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.
Chief Executive Officer Hans 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, J.P. Morgan and Morgan Stanley as lead bookrunners on the deal.
The firm reported intriguing clinical trial results at the annual meeting of the American Society of Hematology on Dec. 8.
“The tumor response rates and duration observed in these ongoing studies remain encouraging as we advance our lead product candidates in hematological malignancies,” said Bishop at the time.
Juno’s initial IPO filing showed it is aware of the market risks involved in taking a young company public, when huge swings in value can come from an enormous market open but quickly taper back.
“Our longer-term goal is to revolutionize medicine through the application of cell-based therapies,” the company writes in its SEC filing. “In particular, we believe that genetically-engineered T cells have the potential to meaningfully improve survival and quality of life.”
Juno will need every penny of its IPO coffers and existing $314 million in venture funding from Arch Venture Partners, Amazon.com founder Jeff Bezos and largest stakeholder Alaska Permanent Fund, which owns 34 percent of the venture.
“Our very short history as an operating company makes any assessment of our future success or viability subject to significant uncertainty,” the company writes. “We will encounter risks and difficulties frequently experienced by early-stage companies in rapidly evolving fields. If we do not address these risks successfully, our business will suffer.”
Earlier this winter the company beefed up its intellectual property portfolio by agreeing to pay Connecticut-based Opus Bio $20 million and 1.6 million shares of Juno stock in exchange for an exclusive license to patents and data related to various human monoclonal antibodies and their use in immunotherapy.
BioSpace Temperature Poll
After Amgen Inc. said last week that it will close its South San Francisco facility acquired during its $10 billion buyout of Onyx Pharmaceuticals and will lay off 300 of Oynx’s 750 workers, BioSpace is wondering—will the number of mergers and acquisitions completed in 2014 mean a “streamlining” of biotech jobs in the Bay Area? Tell us your thoughts.
