Image source: Getty Images.
Owning a clinical-stage biotech stock can sometimes be like riding a roller coaster. Juno Therapeutics (JUNO) shareholders have gotten to experience how apt this analogy is first-hand this year. The biotech's stock plunged more than 35% early in 2016, rebounded strongly, then fell over 35% yet again in July.
Juno announced its second-quarter results after the markets closed on Thursday. How did the biotech perform? Here are the highlights.
Juno results: The raw numbers
| Metric |
Q2 2016 Actuals |
Q2 2015 Actuals |
Growth (YOY) |
|---|---|---|---|
|
Revenue |
$27.6 million |
$12.5 million |
120.8% |
|
Net loss from continuing operations |
($64.8 million) |
($66.0 million) |
-- |
|
Net loss per share |
($0.64) |
($0.79) |
-- |
YOY = year over year. Data source: Juno Therapeutics.
What happened with Juno this quarter
Celgene (CELG) kicked in a significant part of Juno's revenue in the second quarter. The big biotech continues to collaborate with Juno and exercised its option to commercialize Juno's CD19 program in April. Celgene paid $50 million to Juno in the second quarter for the CD19 opt-in, although not all of this amount was recognized as revenue during the quarter.
A 2015 patent litigation settlement with Novartis also made an impact in the latest results. Juno received $5.8 million from the large drugmaker in the first quarter and another $6.5 million in the second quarter.
Juno kept expenses largely under control during the second quarter. General and administrative costs dropped by 16.7% year over year. Research and development costs grew 20% compared to the prior year period.
Juno's best financial news was its cash position. The biotech reported cash, cash equivalents, and marketable securities of $1.11 billion as of June 30, 2016. That figure isn't too much lower than the $1.13 billion on hand at the end of the first quarter.
Outside of the financial results, Juno entered into two significant deals during the second quarter. The biotech secured an exclusive license with Memorial Sloan Kettering Cancer Center and Eureka Therapeutics for a drug candidate targeting B-cell maturation antigen (BCMA) and for antibodies against two additional undisclosed multiple myeloma targets. Juno also acquired privately held RedoxTherapies, with its potential cancer drug vipadenant.
The most significant news for Juno came after the end of the second quarter. On July 7, the FDA placed a clinical hold on the biotech's phase 2 clinical trial of JCAR015 after two patient deaths occurred. That hold was lifted on July 14 after Juno changed its pre-conditioning regimen.
What management had to say
Juno CEO Hans Bishop remained positive despite the recent JCAR015 scare. Bishop said:
The JCAR015 Phase II ROCKET trial is open again after we amended the protocol to return to a cyclophosphamide-only preconditioning regimen. If the ROCKET data are in the range of the Phase I results, where most patients were treated using this preconditioning regimen, we will have the opportunity to change the standard of care and offer improved hope for adult patients with relapsed or refractory ALL [acute lymphoblastic leukemia].
He added:
Additionally, we continue to enroll patients in our JCAR017 trial. We are encouraged that JCAR017, the backbone of our CD19 franchise, will change the standard of care again across a range of B cell malignancies with approvals projected to occur as early as 2018.
Looking forward
The two patient deaths in Juno's phase 2 clinical trial of JCAR015, along with the subsequent FDA clinical hold, jolted investors. Expect all eyes to be on any further developments from this study now that the hold has been lifted. With the deaths occurring only after the chemotherapy fludarabine was added to the pre-conditioning regimen, Juno hopes that sticking with only cyclophosphamide in pre-conditioning will prevent further deaths.
Much of Juno's market cap is tied to JCAR015. Any clinical bumps in the road will be amplified in the stock's movement. However, this CD19 candidate represents Juno's earliest chance for commercial success. The biotech hopes to win FDA approval for JCAR015 in the first half of 2018.
As Hans Bishop said, JCAR017 could win approval in 2018 if all goes well. The drug is even more important overall to Juno's future than JCAR015. Analysts think JCAR017 could eventually reach peak annual sales of around $2 billion.
