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Why Juno Therapeutics Shares Are Going Up 21.2% Today

What happened

After the company released its third-quarter progress report and shared the latest data from its lead drug, JCAR017, shares of Juno Therapeutics (NASDAQ: JUNO) are shooting 21.2% higher at 2:30 p.m. EDT today.

So what

There weren't any surprises in Juno Therapeutics' earnings release. Its collaboration revenue in the quarter was $44.8 million and, unsurprisingly, major research and development spending resulted in a loss of $0.73 per share. 


What was surprisingly good, however, was the latest data on its lead drug candidate, JCAR017.

Earlier this year, Juno Therapeutics lost the race to Novartis (NYSE: NVS) and Gilead Sciences (NASDAQ: GILD) to become the first company to secure Food and Drug Administration approval for a chimeric antigen T-cell therapy (CAR-T), an approach that reengineers a patient's T-cells so that they can better find and destroy cancer cells.

Novartis and Gilead Sciences may have beaten Juno Therapeutics to market, but the latter's new data on JCAR017 suggests that it could end up surpassing those competitors thanks to best-in-show efficacy and safety.

In its Transcend trial, Juno Therapeutics reports an 80% overall response rate and 73% complete response rate in a core group of patients that represent the patient population enrolled in its ongoing pivotal trial. JCAR017's complete response rates at the three-month mark appear to match up favorably to three-month study data for Gilead Sciences' Yescarta, which is approved in diffuse large b-cell lymphoma (DLBCL), and Novartis' Kymriah, which is approved for use in acute lymphoblastic leukemia and is under consideration for use in DLBCL. In their trials, complete response rates at the three-month mark were in the high 30% range.

Importantly, JCAR017 may be safer. A dangerous condition called cytokine release syndrome (CRS) is common in Yescarta and Kymriah, but there's only been one case of grade 3 or higher CRS in Juno Therapeutics' trial and 70% of patients didn't suffer from any grade of CRS. JCAR017 also could reduce the risk of neurotoxicity, another safety concern for Yescarta and Kymriah. In JCAR017's study, only 14% experienced severe neurotoxicity and 64% had neither a CRS nor a neurotoxicity event.

Now what

It appears that Juno Therapeutics has designed JCAR017 in a manner that may limit its risks relative to its peers and boost its efficacy. If this data is confirmed in the ongoing pivotal trial, JCAR017 could win a speedy approval and become oncologists favorite choice in DLBCL. Since CAR-T prices are in the hundreds of thousands and the addressable DLBCL population numbers in the thousands of patients, a win in this indication would be a big commercial success. As a result, Juno Therapeutics will want to keep close tabs on JCAR017's pivotal trial, which is expected to read out data next year. 

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Todd Campbell owns shares of Gilead Sciences. His clients may have positions in the companies mentioned.
The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool recommends Juno Therapeutics. The Motley Fool has a disclosure policy.