Juno Stock: This Is Why Juno Therapeutics Inc Shares Are Going Crazy

Juno StockJUNO Stock Plunges 30%

U.S. biotechnology company Juno Therapeutics Inc (NASDAQ:JUNO) collapsed on Wall Street after announcing that two patients undergoing clinical trials of its experimental treatment against leukemia have died. Juno Therapeutics stock plunged 27.73% to $29.50 in electronic trading after market close. Before rushing to action, however, Juno stock is still a worthy contender, given the scope and potential of the study and the therapy it expects to deliver.

Juno stock had actually closed Thursday’s trading at $40.82, rising more than two percent. At market close, Juno Therapeutics announced that the U.S. Food and Drug Administration (FDA) had suspended clinical trials under a so-called “clinical hold” of its “JCAR015” treatment against blood cancer (leukemia) because of the deaths of two patients last week. (Source: “Juno Therapeutics Reports Clinical Hold on the JCAR015 Phase II ROCKET Trial,” Business Wire, July 7, 2016.)

In pre-market trading, Juno stock was trading at $30.47, or some 25% lower than Thursday’s official closing price. There is no doubt the news will come as a blow to Juno and its investors, but the stakes are high, suggesting the study will ultimately resume. Indeed, using genetic engineering, the study aims to force a patient’s own T-cells (a white blood cell variety) to attack the B cells that characterize many types of blood cancer. The initial results were startling, as the Juno’s study is daring: in some cases it has made the cancer temporarily disappear in some patients for whom other treatments have otherwise failed. (Source: “Juno Therapeutics Stops Trial Of Cancer-Killing Cells After 3 Patient Deaths,” Forbes, July 7, 2016.)

Founded in 2013 in Seattle (WA), Juno Therapeutics is a $4.3-billion biotech specializing in immunotherapy solutions. Most importantly, it is focusing on developing a new approach to fighting diseases like leukemia by strengthening the immune system. Juno has already asked the FDA to amend its protocol so that it can continue the tests. It will submit its full response to the clinical hold next week.

Indeed, Juno wants to continue the trials of its new “chimeric antigen receptor T-cell,” better known as CAR-T. The reason this study is so important to Juno—and Juno stock, of course—is that it would mark the company’s first official product on the market, expecting approval as early as 2017 for treatment of adult lymphoblastic leukemia (ALL). (Source: Ibid.)

Both leukemia patients and Juno shareholders have reason to be optimistic. It’s still premature to determine how long of a delay Juno will have to endure before it can get the study back on track.

However, two factors suggest that delay won’t be long:

The first is that Juno is not alone in its pursuit. Such biotech and pharma sector companies as Novartis AG (VTX:NOVN) and Kite Pharma Inc (NASDAQ:KITE) are testing products similar to Juno’s JCAR015, targeting different sets of patients, respectively ALL and non-Hodgkin’s lymphoma in children. (Source: Ibid.) The point here is that the therapies have shown strong potential and that’s why so many physicians have reason to believe in their ultimate success.

Moreover, Juno’s managers said the company has a good idea of why some of the study patients died. Without going into the scientific details, Juno said that it could resume the study promptly upon getting FDA approval. Juno is also pursuing other CAR-T programs that are unaffected by the JCAR015 study.

In the balance, Juno stock at its current depressed price is worth considering, given its potential and the likelihood of a prompt resumption of its clinical trials.