Celgene Corporation (NASDAQ: CELG)
Celgene Corporation announced a 10 year collaboration agreement with Juno Therapeutics for a total of a $1 billion dollar investment to access Juno’s immunotherapy technologies for the treatment cancer. Shares of JUNO sky rocketed higher in after hours trading by over 60%, or $34.58 to a high of $80.87 from a close of $46.29. Shares of CELG were flat on the news and since have slid lower.
Celgene has agreed to purchase 9.1 million shares of JUNO stock for roughly 1 billion dollars and reserves the right to buy up to an additional 30% of JUNO stock over the 10 year period.
An analyst at RBC Capital Markets, Michael Yee, had the following comments:
“Bottom line is we like that CELG is making a big commitment to CAR-T, as we think this will be an important hematological platform in the future, but certainly would agree with the likely pending consensus view that the price tag is also big. Bulls could say that CELG now gets access to a leading CAR-T platform and a long-term relationship to CAR-T expertise and manufacturing … but the bears would clearly say, ‘Why did they have to pay $1 billion, and why pay at such a premium price, given these products are still years away from the market and other programs are not in the clinic and will be years from the market and no real clinical data just yet?” Investors Business Daily
Celgene Corporation (Celgene), incorporated on April 17, 1986, together with its subsidiaries, is an integrated biopharmaceutical company engaged primarily in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. Reuters
Juno Therapeutics (NASDAQ: JUNO)
Juno Therapeutics has agreed to collaborate with Celgene Corporation to develop ground breaking immunotherapies to treat cancer.
What does this mean for JUNO?
In short, Celgene will have the opportunity to participate in the commercialization of Juno’s lead autoimmune candidates, CD19 and CD22. Juno will have the responsibility of the North American market while Celgene will undertake the global market while paying Juno a royalty on sales. In addition, Juno retains the right to a co-development scenario with regard to specific Celgene products where the split will be 70(Celgene)/30(Juno) for costs and profits.
Juno’s Chief Executive Officer, Hans Bishop said,
“This unique collaboration is designed to catalyze and create tremendous ongoing scientific and product development synergy by leveraging each company’s strengths and assets.In addition to its established global presence and commercial reach, Celgene has leading small molecule and protein capabilities that complement Juno’s advanced engineered T cell capabilities. By doing this together, we believe we can more quickly and effectively develop potentially disruptive therapies in this new field of medicine and make them more readily available to patients worldwide.”
Juno Therapeutics, Inc. (Juno), incorporated on August 5, 2013, is a biopharmaceutical company. The Company is developing cell-based cancer immunotherapies based on its chimeric antigen receptor (CAR) and T cell receptor (TCR) technologies to genetically engineer T cells to recognize and kill cancer cells. Juno’s product candidates, JCAR015, JCAR017 and JCAR014, utilize CAR technology to target CD19, a protein expressed on the surface of various B cell leukemias and lymphomas. The Company’s CAR and TCR technologies alter T cells ex vivo, or outside the body. Reuters
Ziopharm Oncology, Inc. (NASDAQ: ZIOP)
Ziopharm Oncology, another company involved in the CAR-T arena has commanded a lot of attention as it has been on fire in 2015. In the span from January to march, ZIOP tacked on over 150% to its share price and since has consolidated maintaining a 100% move since the beginning of 2015. Shares of ZIOP jumped higher in after hours trading yesterday on sympathy to the news of a collaboration agreement between Celgene Corporation and Juno Therapeutics.
Recently, ZIOP received a downgrade from the analyst firm BMO Capital Markets. BMO cut their rating on ZIOP from Outperform to Market Perform on a “valuation” call and slashed the price target from $15 to $10 on June 22.
However, the breaking news between Celgene and Juno could spark another move up for ZIOP to all time highs as that level is well within reach. That, in addition to speculation of ZIOP being positioned for a large merger deal, could be the catalysts to propel ZIOP exponentially higher and worth keeping on a watch list.
ZIOPHARM Oncology, Inc., incorporated on May 16, 2005, is a biopharmaceutical company. The Company is engaged in the acquisition, development and commercialization of a portfolio of cancer therapies through synthetic biology. The Company’s pipeline includes a number of cell-based therapeutics in both clinical and preclinical testing which are focused on hematologic and solid tumor malignancies. Reuters