What happened

After Gilead Sciences (NASDAQ:GILD) scooped up competitor Kite Pharma (NASDAQ: KITE) for $11.9 billion and Novartis (NYSE:NVS) secured an approval from the Food and Drug Administration for Kymriah, shares of Juno Therapeutics (NASDAQ:JUNO) skyrocketed 46% in August, according to S&P Global Market Intelligence.

So what

Juno Therapeutics hasn't been in the lead in the race to develop cellular therapies for cancer treatment for a while, but that didn't stop investors from flocking to its shares following key advances at its top CAR-T competitors.

A burlap sack stuffed with cash.


In a flurry of news at the end of August, Gilead Sciences surprised investors by agreeing to pay $11.9 billion in cash to buy Kite Pharma and the FDA approved the use of Kymriah in heavily pretreated pediatric acute lymphoblastic leukemia patients.

The Kite Pharma deal comes ahead of an expected FDA decision on its CAR-T, axi-cel, on Nov. 29. It's not a given that axi-cel will get a green light, but it delivered a better than 50% complete response rate in trials, and the FDA opted against holding an advisory committee meeting to discuss axi-cel's pros and cons, suggesting a go-ahead is likely.

Novartis' Kymriah approval came after an FDA advisory committee gave a unanimous thumbs-up earlier this summer, and it offers significant new hope to a patient population with a historically poor prognosis, too.

Together, these developments show chimeric antigen receptor T-cell therapy, or CAR-T, which involves reengineering a patient's T-cells to spot and destroy cancer cells, could be the next big thing in cancer treatment.

Now what

Juno Therapeutics once challenged Novartis and Kite Pharma in the race to bring the first CAR-T to market, but safety stumbles forced it to shutter development of its lead drug program last year.

Now, Juno Therapeutics is focusing on JCAR017, a second-generation CAR-T that it hopes can still make it to market quickly enough to capture a fair share of the billions of dollars that could be spent on this class of cancer treatment.

Unfortunately, it has a lot of ground to make up. JCAR017 could be at least a year away from filing for FDA approval, and that may put it at least 18 months behind Novartis' and Kite Pharma's launches.

Nevertheless, drugmakers don't have to be the first to market to be best in class. For example, Lipitor wasn't the first cholesterol-lowering statin to make it to market, yet it became the best-selling statin on the planet. If Juno Therapeutics can deliver equal or better efficacy to axi-cel and Kymriah, with fewer safety risks, then it could still become a top seller, despite its laggard status.

Of course, we'll have to wait for a final analysis of JCAR017's trial to find out how it stacks up against other CAR-Ts. Nevertheless, investors appear to think JCAR017's potential makes Juno Therapeutics the next CAR-T company to attract an acquirer's attention. Personally, I'm skeptical that a deal will happen, at least until data from JCAR017's trial proves it's safe.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.