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In March, Juno announced that it was discontinuing work on JCAR015, but with the writing already on the wall, investors were able to shake it off and focus on data from Juno's earlier-stage programs.
And what good data it was
JCAR017, the new star of Juno's pipeline, uses the same basic principle as JCAR015; both are chimeric antigen receptor T-cell (CAR-T) therapies that train T-cells to target cancerous cells expressing a protein called CD19, but JCAR017 uses a fixed ratio of CD4+ and CD8+ T-lymphocytes as well as a few other changes to avoid the side effects that led to JCAR015's demise.
So far, the strategy seems to be working, with JCAR017 posting a three-month overall response rate of 74% in 19 B-cell non-Hodgkin lymphoma patients treated at dose level 2. The treatment led to a 68% complete response rate at three months. And for the 14 patients who have reached six months of follow-up, the complete response rate is still an impressive 50%.
Importantly, only one out of 67 total patients experienced severe cytokine release syndrome, an issue seen with some CAR-Ts as the immune system overreacts. And severe neurotoxicity, which is also common for CAR-T therapies, was only seen in 15% of patients.
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A buyout candidate?
Whether Gilead's decision makes Juno more likely to be purchased is debatable, given Juno's large 2015 partnership with Celgene (NASDAQ: CELG). What company would want to buy Juno, only to have to split profits on its acquired therapies with Celgene?
Of course, Celgene, which already has a large stake in Juno, could end up buying the company, but it seems naive to say that Gilead owning Kite makes that more likely to occur.
Shares could have gone up simply because Kite's buyout serves as an endorsement by Gilead of CAR-T's potential, but that's a marginal increase, at best, considering Celgene arguably has much more experience in the blood cancer market than Gilead does and has already given Juno its own endorsement.
Late to the party
Shares of Juno are about 25% off the high set ahead of the American Society of Hematology (ASH) meeting as investors digested the ASH data and started to worry about how far JCAR017 is behind fellow CAR-T therapies, Novartis' (NYSE: NVS) Kymriah and Gilead's Yescarta, which are both already on the market.
But long-term investors don't have to worry about the delay. Initially, Juno might have problems pushing into the market as doctors will tend to use what's worked for their previous patients, but as doctors gain experience with new drugs, the best, safest drug always comes out on top in the end.
Now Juno just needs to prove that in 2018.
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Brian Orelli has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Celgene and Gilead Sciences. The Motley Fool recommends Juno Therapeutics. The Motley Fool has a disclosure policy.