The Probable Reason Why Juno Therapeutics Rose 12.1% In April

By Brian Feroldi Markets Fool.com

What happened

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Shares of Juno Therapeutics (NASDAQ: JUNO) a clinical-stage biotech focused on CAR-T cancer immunotherapies, rose 12.1% during April, according to data from S&P Global Market Intelligence.

So what

Juno didn't release any significant news during that month that could help to justify its strong market performance. That makes it likely that Juno's shares were simply bouncing back from the drubbing that they took in March. The stock fell by double digits that month after the company announced that it was throwing in the towel on JCAR015 for safety reasons. Since JCAR015 was the company's lead compound, it is understandable that the market reacted negatively to the news.

Image source: Getty Images.

Now what

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Juno has since decided to refocus its resources to develop the rest of its pipeline. The company appears to be particularly excited about its CD19-directed product candidates, which include JCAR017 and JCAR014. These products are being researched as hopeful treatments for diseases like non-Hodgkin lymphoma, chronic lymphocytic leukemia, and acute lymphoblastic leukemia. While these products are still in early-stage testing, Juno and its partner Celgene believe that JCAR017 could be on the market as a treatment for non-Hodgkin lymphoma as early as next year.

Meanwhile, Juno continues to boast a balance sheet packed with more than $922 million in cash. That should be plenty of capital to keep the company's doors open for several more years, even though it is expected to set fire to roughly $285 million in 2017 alone.

On the flip side, even if all goes well, it is possible that Juno won't be the only CAR-T game in town. Companies such as Novartis and Kite Pharma have already sent CAR-T product candidates off for regulatory review in disease states like acute lymphoblastic leukemia and non-Hodgkin lymphoma. If they succeed in bringing these therapies to market first, then it might be hard for Juno's products to gain traction.

Overall, Juno remains a high-risk, high-reward stock. Long-term investors should mentally prepare themselves for plenty more volatility in the months and years ahead.

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Brian Feroldi owns shares of Celgene. The Motley Fool owns shares of and recommends Celgene. The Motley Fool recommends Juno Therapeutics. The Motley Fool has a disclosure policy.