When Juno Therapeutics (NASDAQ: JUNO) announced its fourth-quarter and full-year 2016 results in March, investors were most focused on the company's discontinuation of development of a once-promising lead cancer drug. Juno chose to refocus on its other pipeline candidates after patient deaths occurred in clinical studies of JCAR015.
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Juno provided its first-quarter 2017 update after the market closed on Thursday. JCAR015 wasn't a topic of discussion this time around. Much more important was Juno's relationship with big partner Celgene (NASDAQ: CELG). Here are the highlights.
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Juno Therapeutics results: The raw numbers
|$19.3 million||$9.8 million||
Net income from continuing operations
|($82.2 million)||($71.1 million)||
Adjusted net loss per share
Data source: Juno Therapeutics.
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What happened with Juno Therapeutics this quarter?
Juno's revenue nearly doubled in the first quarter of 2017 compared to the prior-year period. This increase stemmed largely from the company's collaboration with Celgene. In April 2016, Celgene exercised its option to develop and commercialize Juno's CD19 program. The big biotech paid Juno $50 million and shares in all development costs of the program.
The bigger net loss in the first quarter was a result of increased operating expenses. Juno's research and development costs rose 12.5% year over year to $82.9 million. First-quarter general and administrative costs increased 30% year over year to $20.7 million.
Juno's non-GAAP net loss improved compared to the prior-year period, though. The better results were primarily thanks to achange in the estimated fair value of the success payment obligations owed toMemorial Sloan Kettering Cancer Center andthe Fred Hutchinson Cancer Research Center.
The most important financial results for Juno in the first quarter related to its cash position and cash burn. Juno reported cash, cash equivalents, and marketable securities totaling$850.7 million at the end of the first quarter, down from$922.3 million at the end of 2016. Its cash burn in the first quarter,excluding cash inflows and outflows from business development activities, was$75.3 million.
Juno's cash burn in the first quarter 2017 increased from the $61 million recorded in the prior-year period. This increase stemmed from general growth in the biotech'sclinical, manufacturing, and research operations (including purchase of manufacturing equipment) as well as additional costs to build out Juno's planned headquarters facility. However, the cash burn increase was partially offset by$11.2 million received from Celgene during the first quarter.
What management had to say
Juno Therapeutics president and CEO Hans Bishop said, "In the first quarter 2017, we made significant progress with our lead program, JCAR017, and we look forward to presenting updated data in DLBCL atASCO."
We also continue to advance our pipeline more broadly with eleven product candidates now in human testing. Already this year, we have initiated a number of trials, including a BCMA CAR T, a CD19-directed 4-1BBL armored CAR, a fully human CD19 CAR T, a combination trial with JCAR014 and durvalumab, and a combination trial with JCAR014 and ibrutinib. With up to 20 ongoing trials by year end, we expect to gain additional insights that may lead to product candidates that can deliver long-term durable remissions for patients in need.
Juno continues to expect cash burn in 2017,excluding cash inflows or outflows from upfront payments related to business development activities, of between$270 million and $300 million. The company should still have an excellent cash position for a while to come.
With JCAR015 out of the picture, Juno's hopes rest largely on another CD19 candidate, JCAR017. The company is evaluating JCAR017 in a phase 1 study for treatingin non-Hodgkin lymphoma, including diffuse large B-cell lymphoma (DLBCL). Juno also plans to seek approval to begin clinical testing for JCAR017, or a similar candidate, in treating chronic lymphocytic leukemia (CLL).
If everything goes well, Juno could potentially be in position to obtain regulatory approval for JCAR017 in treating DLBCL as early as 2018, and in treating CLL as early as 2019. There is a long way to go before the company will be in position to seek regulatory approval, but investors have much to watch along the way.
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