Shares of Jounce Therapeutics (NASDAQ: JNCE) jumped more than 39% last month, according to data from S&P Global Market Intelligence. The development-stage company reported full-year 2018 operating results that included $65.2 million in collaboration revenue, compared to $71.6 million in the year-ago period. The decline isn't noteworthy for the pre-commercial biopharma.
In fact, that's an impressive amount of revenue for such an early stage company. It went a long way in allowing the company to report an operating loss of "only" $31 million in 2018, which allowed Jounce Therapeutics to exit the year with $196 million in cash, cash equivalents, and investments. That said, investors need a reason to get excited about the company's immuno-oncology pipeline after a disastrous clinical trial last summer -- and the business is trying to deliver.
The lead drug candidate, vopratelimab (formerly JTX-2011), is expected to begin two new phase 2 trials as a combination therapy in 2019, which means preliminary data are expected to be available in 2020. The experimental treatment proved almost completely ineffective against a wide range of solid tumors, both as a stand-alone therapy and combination therapy, in its first major clinical trial reported in June 2018. Wall Street doesn't seem too confident in its potential, but Jounce Therapeutics remains committed to its development nonetheless.
Meanwhile, the second most-advanced drug candidate, JTX-4014, will have a recommended dose determined in 2019. That's a relatively boring milestone, but one that's required before a mid-stage trial can be approved by regulators. It could also become more important if vopratelimab stalls again.
Considering the company is valued at just $210 million, a far cry from its peak valuation of over $900 million in early 2018, Jounce Therapeutics desperately needs a win in the clinic to regain the trust of investors. While it's possible the company can use what it learned from its first failure to develop more effective treatments, most of its pipeline assets are still in preclinical development. That means investors will need to remain patient -- and can expect a fair amount of volatility in the meantime.
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