In March, Juno Therapeutics (NASDAQ:JUNO) announced that it was ending development of JCAR015 after five patients with acute lymphoblastic leukemia (ALL) died from cerebral edema -- brain swelling -- in its phase 2 clinical trial. The lethal side effect made it unlikely the treatment could get approved, despite extremely strong efficacy data.

After a review of the data, the company said it thought there were protocol modifications and process improvements that would hopefully make JCAR015 safer, but those changes would require Juno to go back to phase 1. Since the biotech has other drug candidates to treat ALL, Juno made a decision with its partner Celgene (NASDAQ:CELG) that it would be best to shelve JCAR015 and focus on the other ALL therapies.

All told, the biotech spent $46.4 million on the failed drug, which could end up being a little higher depending on wrap-up costs.

Period

JCAR015 Expenses

Aug. 5, 2013 to Dec. 31, 2013

$7.7 million

2014

$4.2 million

2015

$11.3 million

2016

$21.1 million

Q1 2017

$2.2 million

Total

$46.4 million

Data source: Juno Therapeutics. Total doesn't equal sum of periods due to rounding.

The perils of an unproven technology (maybe)

JCAR015 was Juno's lead CAR-T cell therapy, a relatively new type of cancer treatment in which patient's T-cells are taken out of a patient's body, treated so that they're trained to attack the cancer cells expressing a specific protein, and then put back into the patient.

Kite Pharma (NASDAQ:KITE) and Novartis (NYSE:NVS) have gotten their CAR-T treatments past phase 3 without showing troubling side effects, albeit in a different type of blood cancer. Juno is testing the target of JCAR015, a protein called CD19, with another CAR-T in patients with non-Hodgkin lymphoma (NHL), so it probably isn't the target specifically. And Juno is testing a CAR-T in pediatric ALL, where the company hasn't seen a problem with cerebral edema.

Doctor showing patient test results in hospital bed

Image source: Getty Images.

In the end, the demise of JCAR015 was probably an unlucky combination of frail patients, the pre-treatment used to get patients' bodies to accept the trained T-cells, and an overactive treatment.

Biotech is certainly a risky sector, but that risk is intensified when the underlying technology hasn't been proven to work. In this case, however, considering Kite Pharma's and Novartis' success, it might be that Juno just got unlucky more than anything else.

Righting the ship

At this point, JCAR015 is only a setback that doesn't look like it'll bring down the entire ship.

Juno has 11 treatments further back in the pipeline that use CAR-T or T Cell Receptor (TCR), a related technology for targets that are inside the tumor cell. Investors will get a look at how two of the early stage programs, JCAR017 and JCAR014, are working at the American Society of Clinical Oncology (ASCO) meeting next month.

At ASCO, Juno will present phase 1 data for a trial testing JCAR017 in patients with NHL that have failed other treatments. There will also be a presentation on the safety of JCAR014, which will hopefully give investors confidence that JCAR015's side effects are specific to that treatment and not an issue with the entire platform technology.

Brian Orelli has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool recommends Juno Therapeutics. The Motley Fool has a disclosure policy.