Shares of Juno Therapeutics soared Tuesday morning, a day after larger drug developer Celgene announced plans to invest about $1 billion in Juno mostly through stock purchases as part of a collaboration to develop cancer and autoimmune disease treatments.
Celgene will pay about $150 million upfront and buy 9.1 million shares of Juno's common stock at $93 each. The stock portion totals around $850 million, and the per-share price is nearly double the $46.61 closing price of Juno stock on Friday.
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The collaboration between the companies will initially focus on Juno technology that genetically engineers cells in a patient's body to recognize and kill cancer cells, based on a certain protein on that cell's surface.
Juno will be responsible for developing and selling its products in North America under the agreement. Celegene will develop and sell the products in the rest of the world and pay a royalty on sales from those areas.
Juno also can enter a co-development and commercialization deal on certain products that Celgene develops.
Celgene also can nominate a member of Juno's board under the deal, which has been approved by the boards of both companies. The drug developers expect the deal to close in the third quarter.
Shares of Seattle-based Juno Therapeutics Inc. were up more than 33 percent, or $15.45, to $61.75 in pre-market trading. Summit, New Jersey-based Celgene Corp. slipped 14 cents to $114.77.