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.

Martin Shkreli [via Getty]

Pris­on­er #87850-053 does not get to add drug de­vel­op­er to his list of cred­its

Just days after Retrophin shed its last ties to founder Martin Shkreli, the biotech is reporting that the lead drug he co-invented flopped in a pivotal trial. Fosmetpantotenate flunked both the primary and key secondary endpoints in a placebo-controlled trial for a rare disease called pantothenate kinase-associated neurodegeneration, or PKAN.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology
ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development
CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at with any issues.

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Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Hal Barron. GSK

GSK's Hal Bar­ron her­alds their sec­ond pos­i­tive piv­otal for cru­cial an­ti-BC­MA ther­a­py, point­ing to a push for quick OKs in a crowd­ed field

Hal Barron has his second positive round of Phase III data in hand for his anti-BCMA antibody drug conjugate belantamab mafodotin (GSK2857916). And GSK’s research chief says the data paves the way for their drive in search of an FDA approval for treating multiple myeloma.

It’s hard to overestimate the importance of this drug for GSK, a cornerstone of Barron’s campaign to make a dramatic impact on the oncology market and provide some long-lost excitement for the pharma giant’s pipeline. They’re putting this BCMA program at the front of that charge — looking to lead a host of rivals all aimed at the same target.

We don’t know what the data are yet, but DREAMM-2 falls on the heels of a promising set of data delivered 5 months ago for DREAMM-1. There investigators noted that complete responses among treatment-resistant patients rose to 15% in the extra year’s worth of data to look over, with a median progression-free survival rate of 12 months, up from 7.9 months reported earlier. The median duration of response was 14.3 months.

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UP­DAT­ED: An em­bold­ened As­traZeneca splurges $95M on a pri­or­i­ty re­view vouch­er. Where do they need the FDA to hus­tle up?

AstraZeneca is in a hurry.

We learned this morning that the pharma giant — not known as a big spender, until recently — forked over $95 million to get its hands on a priority review voucher from Sobi, otherwise known as Swedish Orphan Biovitrum.

That marks another step down on price for a PRV, which allows the holder to slash 4 months off of any FDA review time.

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Bob Smith, Pfizer

Pfiz­er is mak­ing a $500M state­ment to­day: Here’s how you be­come a lead play­er in the boom­ing gene ther­a­py sec­tor

Three years ago, Pfizer anted up $150 million in cash to buy Bamboo Therapeutics in Chapel Hill, NC as it cautiously stuck a toe in the small gene therapy pool of research and development.

Company execs followed up a year later with a $100 million expansion of the manufacturing operations they picked up in that deal for the UNC spinout, which came with $495 million in milestones.

And now they’re really going for it.

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Video: Putting the AI in R&D — with Badhri Srini­vasan, Tony Wood, Rosana Kapeller, Hugo Ceule­mans, Saurabh Sa­ha and Shoibal Dat­ta

During BIO this year, I had a chance to moderate a panel among some of the top tech experts in biopharma on their real-world use of artificial intelligence in R&D. There’s been a lot said about the potential of AI, but I wanted to explore more about what some of the larger players are actually doing with this technology today, and how they see it advancing in the future. It was a fascinating exchange, which you can see here. The transcript has been edited for brevity and clarity. — John Carroll

As­traZeneca’s Imfinzi/treme com­bo strikes out — again — in lung can­cer. Is it time for last rites?

AstraZeneca bet big on the future of their PD-L1 Imfinzi combined with the experimental CTLA-4 drug tremelimumab. But once again it’s gone down to defeat in a major Phase III study — while adding damage to the theory involving targeting cancer with a high tumor mutational burden.

Early Wednesday the pharma giant announced that their NEPTUNE study had failed, with the combination unable to beat standard chemo at overall survival in high TMB cases of advanced non-small cell lung cancer. We won’t get hard data until later in the year, but the drumbeat of failures will call into question what — if any — future this combination can have left.

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Why would Am­gen want to buy Alex­ion? An­a­lysts call hot­ly ru­mored takeover un­like­ly, but seize the mo­ment

A rumor that Amgen is closing in on buyout deal for Alexion has sparked a guessing game on just what kind of M&A strategy Amgen is pursuing and how much Alexion is worth.

Mizuho analyst Salim Syed first lent credence to the report out of the Spanish news outlet Intereconomía, which said Amgen is bidding as much as $200 per share. While the source may be questionable, “the concept of this happening doesn’t sound too crazy to me,” he wrote.