Celgene in Talks to Buy Juno Therapeutics -- Update

By FeaturesDow Jones Newswires

Celgene Corp. is in talks to buy biotechnology company Juno Therapeutics Inc., just days after announcing another major deal to bolster its portfolio of blood-cancer drugs.

The talks could produce a deal in the coming weeks, assuming they don't fall apart, people familiar with the matter said. Terms of the possible deal couldn't be learned. Juno had a market value of about $5.5 billion as of Tuesday afternoon.

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A deal would come on the heels of Celgene's agreement just over a week ago to buy closely held Impact Biomedicines. Celgene is to pay $1.1 billion upfront and could make billions of dollars of additional payments if Impact hits certain milestones.

Celgene, based in Summit, N.J., is one of the biggest U.S. biotech companies. It's known for its blood-cancer drugs, notably top-selling product Revlimid, but has been trying to diversify its portfolio before Revlimid loses patent protection in the U.S.

Seattle-based Juno would further boost Celgene in the market for drugs treating multiple myeloma and other blood cancers, a market that the company helped establish.

Juno is among the companies pioneering a new kind of cancer treatment, known as CAR-T, that takes a patient's own immune cells, modifies them and then sets them loose to hunt down and attack tumors.

So far, two CAR-T treatments, short for chimeric antigen receptor T-cell, are being sold. One is from Novartis AG and the other is from Gilead Sciences Inc., which paid more than $10 billion for Kite Pharma Inc. and its CAR-T technology.

Doctors hail the drugs as a promising new option for some of the most advanced, hard-to-treat cancers, and analysts expect the newly available therapies will ring up billions of dollars in sales.

But the manufacturing and shipping of the drugs is costly and complex, and it's unclear whether their use will be limited to cancers affecting the production of blood cells like myeloma and leukemia or whether they can extend to solid tumors, such as in breast and lung cancer.

Celgene has been joining with Juno on development of its CAR-T therapy. In 2015, the companies announced a 10-year collaboration in which Celgene paid Juno $150 million upfront and acquired $846.3 million of shares in exchange for options to market some Juno immunotherapy treatments.

Juno was launched in 2013, being based on discoveries by scientists at Fred Hutchinson Cancer Research Center in Seattle, Memorial Sloan Kettering Cancer Center in New York and Seattle Children's Research Institute.

The biotech was one of the pioneers of CAR-T drug research, but fell behind after five patients died in 2016 during a clinical trial. Juno later ended the program.

Since then, the partners have been trying to catch up. Juno and Celgene have released positive but early data for a different drug in development to treat a form of lymphoma. The news sent Juno's stock soaring.

Juno's most advanced CAR-T therapy in development, a leukemia treatment best known as JCAR017, could be approved for sale in the U.S. as early as the end of this year, the company has said.

If Juno's CAR-T pans out, Celgene's efforts to remain a big player in the blood-cancer market would get a shot in the arm just as the company braces for Revlimid losses. Rivals have been seeking to sell generic versions of the multiple myeloma drug, which accounted for $6 billion of Celgene's $9.5 billion in worldwide net product sales during the first nine months of 2017. During the period, Revlimid had nearly $4 billion in U.S. sales.

Celgene has been counting on new drugs like psoriasis therapy Otezla to help boost sales, but they haven't performed as expected, forcing the company to lower its financial outlooks.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com, Dana Cimilluca at dana.cimilluca@wsj.com and Dana Mattioli at dana.mattioli@wsj.com

(END) Dow Jones Newswires

January 16, 2018 17:33 ET (22:33 GMT)

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