Juno Therapeutics (NASDAQ: JUNO)
On July 12, 2016 it was announced that the FDA had released the clinical hold for the company’s lead drug candidate JCAR015. A few weeks prior the FDA had put Juno’s trial, known as ROCKET, on a clinical hold because there were two patient deaths in the trial. The company proclaimed that the patient deaths were due to the company adding two chemotherapy pre-conditioning drugs along with JCAR015. The phase 2 clinical trial was treating patients with relapsed or refractory B Cell acute lymphoblastic leukemia.
Juno stated that it would send an amended protocol to the FDA with the problem chemotherapy drug removed. The chemotherapy drug that may have caused interaction with JCAR015 and pre-conditioning drug cyclophosphamide was an entity known as Fludarabine. With that in mind, Juno Therapeutics sent the amended protocol to the FDA and then stated that it would take at least 30 days before the FDA would respond.
Although, the unthinkable happened last Tuesday. Only one week after the FDA had placed the clinical trial on hold, Juno announced that the hold had been lifted. The share price of June rose by more than 30% that day, making it a big day for investors who suffered losses the week prior. What’s amazing about the hold being lifted is the speed at which it was done. Typically, as noted before, the FDA has 30 days to respond to the clinical hold.
Sometimes it even takes longer than the 30 days for the FDA to respond, say by about two to three months. Which is why investors may have been totally shocked when the FDA had released the clinical hold so quickly. The FDA was happy with the amended protocol and Juno has begun to enroll patients in the clinical trial treating them with JCAR015. But the only pre-conditioning drug the patients will receive in the trial is cyclophosphamide.
With the good news flowing in for Juno, it is odd that just a few days later Juno Therapeutics bought a small startup biotechnology company known as Redox. Juno states that it would be beneficial to acquire this biotech because it could use its small molecule. What could Juno do with the small molecule it acquires from Redox? It could combine the small molecule together with its engineered T-cell platform
One thing to make note of is that Juno didn’t have to break its bank account to acquire this start-up biotech company. It only paid approximately $10 million in cash, along with other payments. Such other ways for Redox to earn payments from Juno would be regulatory, clinical and commercial milestone payments. The problem is that it gets a little tricky with this deal, because Redox has licensed the drug Vipadenant from another company. Redox had to license the drug from Vernalis. The license between Redox and Vernalis happened several years ago, and the terms of the deal were never made public.
The reason for Juno acquiring Vipadenant is that it could use it in combination with its engineered T-cell platform in order to penetrate hard to kill cancerous cells. In other words, it would improve the immune response of the combined drug. How this all plays out remains to be seen, but investors should be somewhat cautious here. The reason being is that it should not be overlooked that Juno acquired a small-cap biotech company one week after safety problems were brought to light about its drug. It could just be a huge coincidence, but investors should remain cautious nonetheless.
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