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Why JUNO is on the Brink of Curing Cancer

Juno Therapeutics

Written by Ophir Gottlieb, 12-10-2015

Juno Therapeutics, if successful, would be an end-all-cure-all for cancer tumors. The firm may have as many as ten candidates in clinical trials by early 2016. Yes, it's on the brink of a cure, not a treatment. And here's a secret, the firm has over $1 billion in cash on hand.

The company is focused on easily the most exciting biotechnology in the world, which is called CAR-T. Juno's technologies genetically engineer a patient's own T cells to recognize and kill cancer cells. Here's how it goes:
CAR-T therapeutics require the removal of a cancer patient's immune cells, selection and activation of the cells, and gene transfer to train the cells to attack the patient's tumor. At that point, the cells are grown in an incubator until there are enough to put back into the patient."

In English, the goal is to reprograms a patient's T-cells — the kind that are supposed to fight disease — to seek and destroy only abnormal, cancerous lymph cells, not the healthy ones crucial for human life. This is a treatment to cure cancer from an individual's own biology.

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The annual meeting of the American Society of Hematology (ASH) just wrapped up and here's what happened with respect to Juno and CAR-T.

In a trial of JCAR014, 57% of leukemia patients and 64% of lymphoma patients who were given the most commonly used dosing regimen experienced complete responses. Another experimental T-cell-based therapy from Juno, JCAR015, achieved an 82% complete response rate in patients with ALL.

There was a ton of other data surrounding CAR-T, and most of it was quite good, if not downright shockingly good. Now get ready to fallout of your chair (CTL019 is Novartis' treatment):

Separately, researchers at the University of Pennsylvania reported that 55 out of 59 pediatric patients with acute lymphoblastic leukemia that had recurred or was not responding to treatment went into remission with CTL019. Of those, 18 were still in remission after a year and nine experienced remissions of more than two years.
Source: Forbes

CAR-T is working, friends, It will be the technology, or at least a part of the technology, to cure cancer. Period.

Now there are a lot of players getting into the CAR-T space, which is excellent news for the world, but makes stock picking a little harder. Kite Pharma is certainly one, and in a prior article I discussed how the company has essentially openly stated that they believe they have cured non-Hodgkin’s lymphoma and have bet the house on it. Other competitors include Novartis, Bellicum Pharma, Amgen and more.

But let's focus on JUNO. The equity market certainly has, placing a $4.5 billion valuation on this company with zero revenue and zero FDA approvals. That's called confidence.

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Juno was named to "MIT Technology Review's 50 Smartest Companies" for 2015 and for good reason. But, the stock has dipped hard in the recent 'risk-off' sell-off and appears to be in free fall. Here's a one-year stock chart -- note the recent move since the start of December.

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Juno's website reads: "These cellular therapies have the potential to be effective regardless of the type of previous treatments patients have experienced and may avoid the long-term side effects associated with current treatments."

Here's an image from Juno's website that illustrates this remarkable approach:

That's right, the firm creates personalized cells and then reinserts them into the patient so she can attack the cancer herself.

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Celgene and Juno have announced a ten-year collaboration, and that means JUNO has one of the most powerful mega cap biotechs in the world at its back, and even more so, that mega cap believes JUNO has cracked the code.

After meeting with Juno's CEO and CFO, FBR analyst Ed White stated "[investors may be] unaware of the advancements that Juno is making in lymphoma," given their focus on leukemia and solid tumors (Source: Benzinga). He further went on to say:

"The company's pipeline is deep with 10 candidates potentially in clinical trials using either CAR or TCR by early 2016."
(Source: Benzinga).

That's right, potentially 10 treatment candidates. The process itself is highly personal, which means the "manufacturing" process of cells is going to be expensive. The reality of medicine in the United States is that those that have, will receive. Those that do not have, very often times, will not receive.

When democratic presidential candidate Hillary Clinton sent her tweet heard round the world surrounding costs of biotech medicine, the stock jolted down. Here's more from that same Motley Fool article:

"CAR-T therapeutics aren't going to have the typical high margins that come with most pharmaceutical drugs. If the government puts pricing controls on drugs, it may be difficult for Juno Therapeutics, and the rest of the companies developing CAR-T therapeutics, to profit from the therapies if the drugs are eventually approved by the Food and Drug Administration."

Keep in mind that the prices that specialty drug makers charge patients is very different than the price these drug manufacturers can charge insurance companies. For now, JUNO has a market cap above $4 billion and has only reported revenue once; last quarter it reported ~$12.5 million. The stock is a pure play speculation on an incredible and novel application of medicine to cure cancer rather than treat it, person by person.

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