Shares of gene-editing pioneer Editas Medicine (EDIT 2.28%) rose over 14% today after Celgene (CELG) announced it will acquire the remaining 90% of Juno Therapeutics (JUNO) it didn't already own. The $9 billion blockbuster deal is just the latest in the biopharma sector for companies developing novel chimeric antigen receptor T-cell (CAR-T) and T-cell receptor (TCR) therapies as potential cancer treatments.
What's the big deal for Editas Medicine? While many stocks are moving on today's news simply because they're developing unrelated CAR-T therapies, the gene-editing pioneer is actually partnered with Juno Therapeutics. The goal of the partnership is to combine the best of both technology platforms. That is, to deploy CRISPR gene-editing technology to more efficiently engineer CAR-T and TCR therapeutics, potentially resulting in safer and more effective treatments with fewer side effects.
As of 3:30 p.m. EST Monday, the stock had settled to a 12.1% gain.
Editas Medicine and Juno Therapeutics tied the knot in the summer of 2015, initially agreeing to work on three undisclosed clinical programs. The gene-editing pioneer received a cool $25 million up front, the opportunity to be reimbursed up to $22 million for initial research in the first five years, and the potential to earn up to $230 million in milestone payments for each drug candidate. The total potential value of the deal was $737 million.
While Celgene gobbling up Juno Therapeutics won't change any details of the development deal with Editas Medicine, it does signal a high level of seriousness regarding the CAR-T and TCR platforms. Considering that the gene-editing pioneer's CRISPR technology could enable more efficient immunotherapies, Wall Street is correctly identifying that the two companies' wagons are hitched -- to a certain extent, anyway. And having a much deeper-pocketed partner on board certainly has the potential to de-risk the financial aspects of development.
Just about every biopharma stock even remotely associated with CAR-T therapeutics received a little boost today after the $9 billion deal for Juno Therapeutics was announced. While it may be difficult to justify the staying power of those gains for most companies, Editas Medicine has a stronger argument to make.
That said, the development deal with Juno Therapeutics will take several years to show demonstrable results in the clinic (the initial R&D period doesn't end until 2020), and Celgene's first priority will be readying its newly acquired immunotherapy pipeline for market approval. That doesn't (yet) involve the gene-editing pioneer, but the long-term potential is brighter after today.