Juno Therapeutics (JUNO) Stock | CAR-T and Lockup Expiration


Juno Therapeutics Inc (NASDAQ: JUNO)

It’s no secret that CAR-T pharmaceutical companies have been soaring, and one stock leading the way is  Juno Therapeutics. After a sharp pullback in late April, buyers stepped in to push JUNO nearly 100% higher compared to its IPO price late last year. Though the stock has pulled back some in the last couple of days, the recent bounce, which began on 5/18, has seen it outpace the broad-based biotechnology index (IBB) by a wide margin.


CAR-T Background

The work JUNO is engaged in, CAR-T, refers to chimeric antigen receptor (CAR) T-cell therapy. In short, the therapy re-engineers a patient’s T-cells to attack cancer. It’s an exciting new technology that is still very much a work in progress, however the prospects are hopeful. According to the-scientist.com, “Many of these therapies are receiving orphan or breakthrough status from the US Food and Drug Administration (FDA), bringing expedited regulatory review, which translates into earlier realization of financial benefits from more rapid market entry. In November 2014, for example, the FDA granted orphan status to Juno’s JCAR015.”

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JUNO Acquisitions and Deals

JUNO, like many other companies involved in CAR-T, has engaged in rapid deal making with two taking place in a month. On June 3, the company announced its purchase of X-Body, a privately held company, in a cash and stock deal. According to Zacks.com, “With this acquisition, Juno has gained access to X-BODY’s discovery platform. The technology will be used to create novel chimeric antigen receptor (CAR T) and high-affinity T cell receptor cancer immunotherapies.”

Last month it was privately held German biotech company, Stage Cell Therapeutics that JUNO purchased. In addition, JUNO has also engaged in partnership deals with Editas Medicine, AstraZeneca, and Fate Therapeutics.. The deals have been met with enthusiasm by investors, with share price rallying on each announcement.  

Lock Up Expiration

One thing at the front of investors’ minds is JUNO’s looming lockup expiration on 85% of its shares, which is set to occur on June 16. A lock up occurs in the period immediately following an IPO and restricts insiders who’ve held shares from before the company was public from selling in the open market. The conventional wisdom, according to an article from ABC news, is that a stock will see a slight decline in the days before lock up expiration as investors anticipate the potential for enormous selling from insiders. Whether or not the stock ever recovers is anybody’s guess.

However, the outcome for biotechnology stocks, especially as of late, is not as ominous. According to Cantor Fitzgerald’s Mara Goldstein via a report from Benzinga, “92 biotech or specialty drug companies with relatively recent lockup expirations gained an average of 3 percent in the subsequent 30 days, versus an average gain of 4 percent during the same periods for the Nasdaq Biotechnology Index.”  So while biotech companies don’t typically outpace their sector index in the period following lock up expiration, they don’t fare too badly either.

Given JUNO’s tremendous bounce beginning in mid-May, where it stands relative to both its IPO price and the broad-based biotechnology index (IBB), and the unique prospects of CAR-T technology, it is all but certain traders will be keeping a keen eye on the stock in coming weeks.

Juno Therapeutics Company Profile

Juno Therapeutics, Inc., a biopharmaceutical company, engages in developing cell-based cancer immunotherapies. The company develops cell-based cancer immunotherapies based on its chimeric antigen receptor and T cell receptor technologies to genetically engineer T cells to recognize and kill cancer cells. Its clinical stage CD19 product candidates include JCAR015 that is in Phase I clinical trials for adult patients with relapsed/refractory B cell acute lymphoblastic leukemia (r/r ALL); JCAR017, which is in Phase I/II trials for pediatric patients with r/r ALL; and JCAR014 that is in Phase I/II trials to treat various B cell malignancies in patients relapsed or refractory to standard therapies. The company’s additional product candidates comprise CD22, a cell surface protein expressed on B lymphocytes; CD171, a cell-surface adhesion molecule to treat neuroblastoma; MUC-16, a protein for treating ovarian cancers; IL-12, a cytokine to overcome the inhibitory effects; ROR-1, a protein for the treatment of non-small cell lung, triple negative breast, pancreatic, and prostate cancers; and WT-1, an intracellular protein that is in Phase I/II clinical trials to treat adult myeloid leukemia and non-small cell lung, breast, pancreatic, ovarian, and colorectal cancers. Juno Therapeutics, Inc. has collaboration agreements with Fred Hutchinson Cancer Research Center, Memorial Sloan Kettering Cancer Center, and Seattle Children’s Research Institute. The company was formerly known as FC Therapeutics, Inc. and changed its name to Juno Therapeutics, Inc. in October 2013. Juno Therapeutics, Inc. was founded in 2013 and is headquartered in Seattle, Washington. Yahoo! Finance