What happened

Juno Therapeutics (NASDAQ:JUNO), a clinical-stage cell therapy company, lost a bit of its luster last month by shedding 19.4% of its value, according to data from S&P Global Market Intelligence. Heading into December, Juno's shares were up by more than 200% for the year, showing the stark reversal in the company's fortunes. 

What's the problem? Investors appear to be growing increasingly concerned that Juno's lead chimeric antigen receptor T cell therapy (CAR-T), JCAR017, won't be able to differentiate itself from Gilead Sciences' (NASDAQ:GILD) Yescarta or Novartis' (NYSE:NVS) Kymriah. Both of these pioneering CAR-Ts, after all, are already on the market.  

Chalkboard chart showing a positive trend turning negative.

Image Source: Getty Images.

So what

Juno's JCAR017 is initially indicated for advanced non-Hodgkin lymphoma (NHL). The problem is that Gilead's Yescarta was approved in the U.S. for this indication late last year, and Novartis' Kymriah is expected to be approved for NHL early this year. So, Juno is roughly a year behind the industry leaders, implying that the biotech may have a hard time convincing doctors to switch to its therapy. 

Now what

To do so, Juno is banking on JCAR017 being a more potent and safer product (i.e., best-in-class) than either Yescarta or Kymriah. While there haven't been any head-to-head trials conducted to properly assess JCAR017 against these other CAR-Ts, the data released last month at the annual American Society of Hematology meeting suggests that JCAR017 could, at least, be the safest of the bunch.

Unfortunately, the market apparently doesn't think safety will be enough to overcome Gilead or Novartis' first-mover advantage. That's not to say that the market is correct in its assessment of JCAR017's commercial prospects, but Juno's stock may have trouble gaining ground until its lead therapy proves otherwise. 

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.