Juno Therapeutics (JUNO) is trading up 47% and hit a new all-time high after the WSJ reported that the company was in talks to be acquired with by Celgene (CELG).
Oncology giant Celgene already owns a 9.7% stake in the CAR-T pioneer. The two companies signed a 10-year collaboration in 2015. Celgene paid Juno $150 million in cash and bought 9.1 million shares at $93/share at the time. Celgene would already be the commercialization partner for Juno's CD19 and CD22 directed (lead) CAR-T product candidates.
Gilead (GILD) dove into the oncology market in a big way when it acquired Juno's rival Kite Pharma for $12 billion last year. That spurred the recurrent speculation about Celgene acquiring the rest of Juno, but last night was the first legitimate report that the companies are in talks.
Much like Gilead, Celgene is looking to acquire growth. Celgene's blood cancer drug Revlimid is expected to account for 64% of sales this year and serious patent cliffs are about four years away.
Celgene cut its 2020 financial targets late last year, sending the stock sharply lower. Those projections don't include partnered assets, like the one with Juno or bluebird's (BLUE) BCMA CAR-T program.
CAR-T cell therapy has potential to be the next frontier in oncology, that's why Gilead dropped $12 billion on Kite. Juno would give Celgene a wholly owned BCMA asset (targeting multiple myeloma, one of Revlimid's big indications). There is also huge potential going after solid tumors, although it is still very early on that front.
Juno was considered the leader in CAR-T and had a larger market value than Kite until its lead CD-19 asset flopped in the summer of 2016, giving Kite and Novartis (NVS) the lead in hematological malignancies. Still, JUNO has a robust pipeline, so one could argue that Celgene would have to pay at least $10 billion to acquire Juno.