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.

A new chap­ter in the de­cen­tral­ized clin­i­cal tri­al ap­proach

Despite the promised decentralized trial revolution, we haven’t yet moved the needle in a significant way, although we are seeing far bolder commitments to this as we continue to experience the pandemic restrictions for some time to come. The vision of grandeur is one thing, but operationalizing and execution are another and recognising that change, particularly mid-flight on studies, is worthy of thorough evaluation and consideration in order to achieve success. Here we will discuss one of the critical building blocks of a Decentralized and Remote Trial strategy: TeleConsent; more than paper under glass, it is a paradigm change and key digital enabler.

Su­per-se­cre­tive an­ti-ag­ing biotech Cal­i­co tees up the first vis­i­ble clin­i­cal tri­al of an ex­per­i­men­tal drug. And it’s for can­cer?

Over the past 7 years, Calico has been so much more than your average, run-of-the-mill secretive biotech players. It’s a riddle, wrapped in a mystery, inside an enigma, to repurpose an old Winston Churchill line dating from the time he confronted the Iron Curtain surrounding Stalin’s thoughts.

Launched by industry legend Art Levinson of Genentech fame, with the infinitely deep pockets of Google for support, one of the few big headlines the anti-aging biotech has sparked focused on a major alliance with AbbVie — a giant outfit that conversely likes to show off its drug prospects whenever it can. Together, they’ve been focused on diseases that limit life span — quite an arc of ailments.

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RBC's Bri­an Abra­hams holds a mock ad­comm on Bio­gen's iffy ad­u­canum­ab da­ta — and most of these ex­perts don't see a path to an ap­proval

As catalysts go, few loom larger than the aducanumab adcomm slated for Nov. 6.

With its big franchise under assault, Biogen is betting the ranch that its mixed late-stage Alzheimer’s data can squeak past the experts and regulators and get onto the market. And the topic — after a decade of Alzheimer’s R&D disasters in what still represents the El Dorado of drug markets — remains in the center ring of discussions around late-stage pipeline prospects.

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Derek Chalmers, Cara Ther

Cara lines up a $440M deal for US rights to its late-stage drug for se­vere itch, with $150M cash on the ta­ble

With plans afoot to file an NDA for what could be its first approved drug, Cara Therapeutics is pivoting its focus to commercialization. And Swiss company Vifor Pharma is willing to surrender up to $440 million to market the candidate in the US.

Cara $CARA CEO Derek Chalmers said an NDA submission is coming this quarter for their intravenous drug Korsuva in chronic kidney disease-associated pruritus (CKD-aP), a severe itching condition. The Stamford, CT-based biotech read out positive topline data from a Phase III pivotal study back in April, and announced plans to approach EMA regulators shortly after filing with the FDA.

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Af­ter near­ly a year of de­bate, the Covid-19 vac­cine chal­lenge tri­als are of­fi­cial­ly com­ing

After nearly a year of public advocacy and often rancorous ethical debate, human challenge trials for Covid-19 vaccines are getting off the ground in London.

The UK government’s Covid-19 Vaccine Taskforce and the contract research firm Open Orphan announced today £10 million ($13 million) plan to test experimental Covid-19 vaccines in volunteers whintentionally exposed to the novel coronavirus. The studies, which won’t launch until early 2021, come after 9 months of debate over whether such studies were safe and would actually hasten vaccine development, and they follow a long history of researchers using challenge models to study other respiratory viruses, including flu and the coronaviruses that cause the common cold.

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James Sabry (Roche)

Roche's James Sabry inks his sec­ond AI deal in back-to-back pacts — this time part­ner­ing Genen­tech with Stan­ford spin­out Gen­e­sis Ther­a­peu­tics

Less than a week after Roche joined forces with Dyno Therapeutics to develop gene therapies using artificial intelligence, its giant subsidiary Genentech is hopping on the AI bandwagon with a different player.

Genentech has inked a deal with Stanford spinout Genesis Therapeutics to harness its AI power for drug development and discovery. Genesis is getting an upfront payment and milestones, but the companies are keeping the details under wraps for now. The Burlingame, CA-based biotech also stands to earn future royalties on any approved Genentech drugs that come from the deal.

En­do pays $658M in a fur­ther bet on col­la­gen-based med­i­cines, buy­ing out long­time bio­phar­ma part­ner

A little less than two years after Endo Pharmaceuticals’ deal to purchase Somerset Therapeutics fell through, the Irish drugmaker is returning to the well with a much bigger acquisition.

Endo has agreed to buy BioSpecifics Technologies for a whopping $658 million, the two companies announced Monday, in the culmination of a research agreement signed all the way back in 2004. Endo will purchase all of BioSpecifics’ outstanding stock for about $540 million, valuing the company at $88.50 per share — a 45% premium on the $61.02 share price at which the company closed on Friday.

Covid-19 roundup: Pars­ing Bourla, a top an­a­lyst sees im­proved chances for Pfiz­er vac­cine; Fau­ci: No sur­prise that Trump was hit by Covid-19

With a medley of adverse events hobbling the late-stage development of vaccines and drugs, Pfizer CEO Albert Bourla’s latest — extended — timeline for the mRNA approach they’re working on with BioNTech is giving some top analysts added confidence that the pharma giant can come up with the regulatory goods next month.

Parsing Bourla’s language in his comments last week, SVB Leerink’s Geoffrey Porges notes that Bourla’s decision to say they “may” be able to nail down the positive efficacy of their vaccine in a matter of days — a big change from his earlier certainty — may also indicate a delay on that to early November.

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Daniel O'Day, Gilead CEO (Kevin Dietsch/UPI/Bloomberg via Getty Images)

Gilead feels the heat as close al­ly Gala­pa­gos re­ports a big set­back on one of their top ex­per­i­men­tal drugs

The bad news keeps stacking up at Galapagos — which quite likely just lost control of a billion-dollar deal — and by extension their close partners at Gilead.

The biotech $GLPG reported after the bell Thursday that GLPG1972, one of their top development programs, flat failed a mid-stage study for osteoarthritis, flunking the primary and all secondary endpoints.

Testing 3 different doses of their drug, which relies on ADAMTS-5 inhibition, investigators concluded that none of them triggered a statistically significant response — as measured by cartilage thickness.

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