Why Juno Therapeutics Inc Plummeted Today

By Brian OrelliMarketsFool.com

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What happened

Juno Therapeutics (NASDAQ: JUNO) is down 26.6% at 1:26 p.m. EST after announcing that it was placing a hold on one of its CAR-T clinical trials after two patients suffered cerebral edemas earlier this week. Both have died.

Rival biotechs that also have CAR-T therapies, Bellicum Pharmaceuticals (NASDAQ: BLCM), Kite Pharma (NASDAQ: KITE), and bluebird bio (NASDAQ: BLUE), initially fell on the news, but have regained most of the their losses, with Bellicum down 1.9%, Kite down 2.9%, and Bluebird actually up 0.2%.

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So what

This is the same trial, known as ROCKET, testing JCAR015 in adult patients with relapsed or refractory B cell acute lymphoblastic leukemia (ALL), which was placed on clinical hold in July after two patients died from a cerebral edema. At the time, Juno believed the side effect was caused by a protocol change that added fludarabine as part of the treatmentgiven to patients before the JCAR015 CAR-T cells are infused into the patient. Juno removed fludarabinefrom the protocol, and the FDA allowed the company to restart the trial.

But apparently there was more to the cerebral edema side effect than just fludarabine. Juno has treated 12 patients since the fludarabine-less protocol was enacted, putting the treatment-related mortality at under 10%. While that seems high, keep in mind that these patients have been treated with multiple drugs without success, so it may be acceptable if the cure rate is high enough. Other treatments, including chemotherapy, have higher treatment-related mortality with low success rates in these late-stage ALL patients.

Now what

At this point, management wasn't willing to hypothesize why the patients are getting cerebral edemas. They hope to have an idea by the American Society of Hematology meeting inearly December, but it seems possible that it's a combination of factors, including the frailty of the patients and the way JCAR015 stimulates the immune system to attack the cancer, which may be difficult to elucidate and correct. This potentially may lead Juno to scrap JCAR015 in late-stage ALL.

Fortunately, Juno has other CAR-T cancer treatments, JCAR014 and JCAR017, in particular, which appear to be safer, and JCAR015 might still be useful in patients with other blood cancers, such as non-Hodgkin lymphoma.

While this issue may be specific to JCAR015 and late-stage ALL, investors in Bellicum Pharmaceuticals, Kite Pharma, and Bluebird should keep in mind that CAR-T is largely uncharted territory that could result in other unanticipated issues with their treatments.

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Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Bluebird Bio and Juno Therapeutics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.