Juno Therapeutics (JUNO) is up 11% after raising $250 million in a follow-on secondary offering. The company sold 6.1 million shares at $41/share. Juno also completed a private placement of 659,415 shares at $41.00/share to partner Celgene (CELG).
Interest in chimeric antigen receptor T-cell (CAR-T) therapy has picked up since Gilead (GILD) made its long-awaited oncology acquisition. Gilead acquired Juno's most direct CAR-T peer Kite Pharma (KITE) for almost $12 billion on August 28. Juno's stock is up 70% since that deal was announced but the market cap is still just under $5 billion.
Juno had more hype around its IPO (after Kite had already come public) but patient deaths in the clinic caused the company to ditch its lead asset late last year. The low-hanging fruit in the world of CAR-T revolves around hematological (blood) cancers. The larger opportunity is in solid tumors. CAR-T has yet to demonstrate any real impressive efficacy with solid tumors. Investors are hopeful that the remarkable complete responses (remissions) seen in blood cancers will one day translate to success in solid tumors, which is a much larger market.
Novartis (NVS) received the first CAR-T approval by the FDA and Kite's approval is imminent. On August 30, the FDA approved Novartis' (NVS) Kymriah for children and young adults with B-cell Acute lymphoblastic Leukemia. Kite's axicabtagene ciloleucel (Axi-cel) will soon get approved for Non-Hodgkin's Lymphoma (NHL), which includes the diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL), and primary mediastinal B-cell lymphoma (PMBCL) indications.
Prior to this offering, oncology powerhouse Celgene already owned almost 10% of Juno. Celgene's initial investment came alongside a partnership and licensing agreement in June of 2015.