Is Juno worth a $10B-$12B buy­out price? An­a­lysts see megabucks deal in the mak­ing on re­port­ed Cel­gene talks

Just a week af­ter bag­ging a blood can­cer drug at the FDA’s thresh­old in a multi­bil­lion-dol­lar deal, Cel­gene is re­port­ed­ly in talks to buy Juno Ther­a­peu­tics in a move that would give it a ma­jor, late-stage ef­fort on the CAR-T front.

The Wall Street Jour­nal is re­port­ing that sources close to the deal are telling them Cel­gene is in the hunt, and some an­a­lysts say that any fi­nal price could hit close to or even sur­pass the $10 bil­lion mark.

A spokesper­son for the biotech tells me that Juno doesn’t com­ment on mar­ket ru­mors. But you can be­lieve that there are plen­ty of pun­ters who are bet­ting that there’s fire un­der all that bil­low­ing smoke. Juno’s shares are up 55% in pre­mar­ket trad­ing Wednes­day. Be­fore the big spike, its mar­ket cap sat at $5.2 bil­lion.

Typ­i­cal­ly, with a mar­ket cap that big, a buy­out could be ex­pect­ed to ring up around a 50% pre­mi­um. But an­a­lysts who have been fol­low­ing these com­pa­nies say that’s all wrong. Cel­gene, they say, paid $93 a share to buy in­to Juno, and they ex­pect CEO Mark Alles to go all in on a deal that could range as high as $12 bil­lion.

Michael Schmidt at Leerink not­ed:

If a deal hap­pens like­ly de­pends on the price and if oth­er bid­ders emerge. We’d be sur­prised if JUNO would ac­cept an of­fer low­er than KITE’s ac­qui­si­tion price of $11.9Bn, giv­en the com­pa­ny’s high lev­el con­vic­tion of hav­ing de­vel­oped a best-in-class CAR-T plat­form and that CELG pre­vi­ous­ly ac­quired 10% of JUNO shares at $93/share.

Cel­gene will clear­ly be fo­cused on gain­ing the same ca­chet that Gilead found when it ac­quired Kite just ahead of its first land­mark ap­proval. But this one will take more time to bear reg­u­la­to­ry fruit. Nev­er­the­less, Ge­of­frey Porges al­so says it could wind up in the same ball­park as Gilead’s $12 bil­lion deal to ac­quire Kite. He notes:

We would ex­pect Cel­gene to pay up to at least the val­u­a­tion where they made their pri­or in­vest­ment ($93/share) in Juno. This would make it a ~$10bn trans­ac­tion, or a 98% or 82% pre­mi­um to Juno’s 30 day ($46.98) and 90 day ($50.82) trail­ing stock price. This would al­so, co­in­ci­den­tal­ly, put the trans­ac­tion price ($11bn gross with Juno’s cash) in the same range as the to­tal pay­ment by Gilead (GILD, MP) for Kite ($12bn), which al­so seems rea­son­able giv­en the sub­stan­tial sim­i­lar­i­ty be­tween the com­pa­nies.

There’s like­ly to be plen­ty of kick­back on that set of num­bers, though. Juno’s stock has re­gained much of its lost val­ue since the lead tri­al de­ba­cle, and pay­ing dou­ble the cur­rent mar­ket cap would like­ly raise ques­tions about Alles’ ne­go­ti­at­ing abil­i­ties. Bloomberg an­a­lyst Max Nisen counts him­self among the skep­tics, not­ing that Cel­gene it­self has al­ready pro­ject­ed peak sales for Juno’s JCAR017 at an unim­pres­sive $1 bil­lion.

Juno has al­so been spot­light­ing its own BC­MA CAR-T, leav­ing Cel­gene — close­ly part­nered with blue­bird bio on a close­ly-watched BC­MA pro­gram — with a po­ten­tial prob­lem that could lead to ei­ther elim­i­nat­ing one or see­ing one go to an­oth­er com­pa­ny.

Once a leader in the race to field the first CAR-T, Juno was slammed af­ter its lead drug had to be scrapped fol­low­ing a string of deaths in the piv­otal study. But armed with what it had learned in the process, the biotech was well along the way in mount­ing a come­back with a new lead ther­a­py that has pro­duced some stel­lar ef­fi­ca­cy and safe­ty da­ta.

Mark Alles

Cel­gene, mean­while, has been forced to mount a come­back ef­fort of its own af­ter Alles man­aged to rat­tle the mar­ket last year with a shaky fi­nan­cial per­for­mance that raised doubts about its con­tin­ued fast growth. Much of its growth now is due to hik­ing the price of its fran­chise drug Revlim­id. And af­ter a late-stage test proved mon­gersen was a flop, most eyes had turned to up­com­ing da­ta on ozan­i­mod for proof that Cel­gene has the goods to please a de­mand­ing set of in­vestors.

That set the stage for last week’s $1.1 bil­lion up­front deal to ac­quire Im­pact, a com­pa­ny that had been new­ly float­ed to take a sec­ond stab at run­ning the myelofi­bro­sis drug fe­dra­tinib back in front of FDA reg­u­la­tors af­ter John Hood, a co-in­ven­tor, made the case that the safe­ty is­sues that had tor­pe­doed the drug at Sanofi were in­ac­cu­rate.

In their ab­stract out for ASH last fall, Juno ex­ecs spelled out a key piece of da­ta for the high dose arm of the ear­ly study on JCAR017. Ze­ro­ing in on that one snap­shot, re­searchers say they tracked an 80% over­all re­sponse rate and a 73% com­plete re­sponse rate at 3 months for the high dose among a “piv­otal core” group of 15 pa­tients.

But Brad Lon­car, an in­de­pen­dent in­vestor who set up the Lon­car Can­cer Im­munother­a­py ETF $CN­CR, hasn’t been a big fan of Juno’s.

Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

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George Yancopoulos (Regeneron)

UP­DAT­ED: Re­gen­eron co-founder George Yan­copou­los of­fers a com­bat­ive de­fense of the po­lice at a high school com­mence­ment. It didn’t go well

Typically, the commencement speech at Yorktown Central School District in Westchester — like most high schools — is an opportunity to encourage students to face the future with confidence and hope. Regeneron president and co-founder George Yancopoulos, though, went a different route.

In a fiery speech, the outspoken billionaire defended the police against the “prejudice and bias against law enforcement” that has erupted around the country in street protests from coast to coast. And for many who attended the commencement, Yancopoulos struck the wrong note at the wrong time, especially when he combatively challenged someone for interrupting his speech with a honk for “another act of cowardness.”

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Elias Zerhouni (Photo by Vincent Isore/IP3/Getty Images)

Elias Zer­houni dis­cuss­es ‘am­a­teur hour’ in DC, the de­struc­tion of in­fec­tious dis­ease R&D and how we need to prep for the next time

Elias Zerhouni favors blunt talk, and in a recent discussion with NPR, the ex-Sanofi R&D and ex-NIH chief had some tough points to make regarding the pandemic response.

Rather than interpret them, I thought it would be best to provide snippets straight from the interview.

On the Trump administration response:

It was basically amateur hour. There is no central concept of operations for preparedness, for pandemics, period. This administration doesn’t want to or has no concept of what it takes to protect the American people and the world because it is codependent. You can’t close your borders and say, “OK, we’re going to be safe.” You’re not going to be able to do that in this world. So it’s a lack of vision, basically just a lack of understanding, of what it takes to protect the American people.

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Tesla and SpaceX founder Elon Musk gestures to the audience after being recognized by President Trump following the successful launch of a Falcon 9 rocket at the Kennedy Space Center. (via Getty Images)

Tes­la chief Elon Musk teams up with Covid-19 play­er Cure­Vac to build 'R­NA mi­cro­fac­to­ries'

Elon Musk has joined the global tech crusade now underway to revolutionize vaccine manufacturing — now aimed at delivering billions of doses of a new mRNA vaccine to fight Covid-19. And he’s cutting right to the front.

In a late-night tweet Wednesday, the Tesla chief announced:

Tesla, as a side project, is building RNA microfactories for CureVac & possibly others.

That’s not a lot to go on. But the tweet comes a year after Tesla’s German division in Grohmann and CureVac filed a patent on a “bioreactor for RNA in vitro transcription, a method for RNA in vitro transcription, a module for transcribing DNA into RNA and an automated apparatus for RNA manufacturing.” CureVac, in the meantime, has discussed a variety of plans to build microfactories that can speed up the whole process for a global supply chain.

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Sec­ond death trig­gers hold on Astel­las' $3B gene ther­a­py biotech's lead pro­gram, rais­ing fresh con­cerns about AAV

Seven months after Astellas shelled out $3 billion to acquire the gene therapy player Audentes, the biotech company’s lead program has been put on hold following the death of 2 patients taking a high dose of their treatment. And there was another serious adverse event recorded in the study as well, with a total of 3 “older” patients in the study affected.

The incidents are derailing plans to file for a near-term approval, which had been expected right about now.

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An ex­pe­ri­enced biotech is stitched to­geth­er from transpa­cif­ic parts, with 265 staffers and a fo­cus on ‘new bi­ol­o­gy’

Over the past few years, different teams at a pair of US-based biotechs and in labs in Japan have labored to piece together a group of cancer drug programs, sharing a single corporate umbrella with research colleagues in Japan. But now their far-flung operations have been knit together into a single unit, creating a pipeline with 10 cancer drug development programs — going from early-stage right into Phase III — and a host of discovery projects managed by a collective staff of some 265 people.

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Pfiz­er shares surge on pos­i­tive im­pact of their mR­NA Covid-19 vac­cine — part­nered with BioN­Tech — in an ear­ly-stage study

Pfizer and their partners at the mRNA specialist BioNTech have published the first glimpse of biomarker data from an early-stage study spotlighting the “robust immunogenicity” triggered by their Covid-19 vaccine, which is one of the leaders in the race to vanquish the global pandemic.

Researchers selected 45 healthy volunteers 18-55 years of age for the study. They were randomized to receive 2 doses, separated by 21 days, of 10 µg, 30 µg, or 100 µg of BNT162b1, “a lipid nanoparticle-formulated, nucleoside-modified, mRNA vaccine that encodes trimerized SARS-CoV-2 spike glycoprotein RBD.” Their responses were compared against the effect of a natural, presumably protective defense offered by a regular infection.

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New stan­dard of care? FDA hands Pfiz­er, Mer­ck KGaA an OK for Baven­cio in blad­der can­cer

The breakthrough therapy designation Pfizer and Merck KGaA notched for Bavencio in bladder cancer has quickly paved way for a full approval.

The PD-L1 drug is now sanctioned as a first-line maintenance treatment for patients with locally advanced or metastatic urothelial carcinoma, applicable in cases where cancer hasn’t progressed after platinum-containing chemotherapy.

Petros Grivas, the principal investigator of the supporting Phase III JAVELIN Bladder 100, called the approval “one of the most significant advances in the treatment paradigm in this setting in 30 years.”

Covid-19 roundup: Vac­cines will need to beat place­bo by 50% to qual­i­fy for FDA OK; UK tri­al drops Kale­tra

The FDA will set the bar for approving a Covid-19 vaccine at 50% efficacy, the Wall Street Journal reported, meaning any successful candidate will have to reduce the risk of coronavirus disease by at least half compared to placebo.

That requirement is part of guidance that the agency is set to release later today, laying out detailed criteria for vaccine developers — some of whom are eyeing an OK by the end of the year, in line with expectations at Operation Warp Speed.

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