Celgene confirms $9B Juno buyout, sees $3B sales for JCAR017

Celgene has agreed to buy CAR-T specialist Juno Therapeutics for around $9 billion in a deal that instantly makes it a big cheese in this emerging therapeutic category.

The definitive terms of the deal—rumors of which hit the headlines last week—were laid out this morning and revealed Celgene’s lofty ambitions for Juno’s pipeline, including what it expects could become $3 billion in sales for lead CAR-T JCAR017 assuming it gets FDA approval next year.

Celgene already owns a little under 10% of Juno and has collaborated with the CAR-T specialist since 2015, when they signed a 10-year collaboration to develop treatments for cancer and immune diseases, but will now take complete control of JCAR017—in phase 1 for non-Hodgkin’s lymphoma—as well as eight additional clinical and preclinical projects.

The size of the deal shows the confidence in CAR-T as a new force in cancer immunotherapy, and the big turnaround at Juno which, not even a year ago, was forced to drop its lead leukemia CAR-T because of toxicity issues. Since then, safety concerns about the technology have abated with two CAR-Ts, Novartis’ Kymriah (tisagenleucel) and Gilead/Kite’s Yescarta (axicabtagene ciloleucel), approved for marketing last year.

Juno shares have been up around 50% since rumors of the deal first began to surface, but added another 27% premarket once the terms were confirmed. Last week Jefferies said that taking over Juno would be a "smart move" for Celgene given that its earlier collaboration already gives it rights to the majority of its CAR-T pipeline, and will allow it to capture 100% of the earnings on all the assets.

Celgene’s $87-per-share agreement is within Jefferies’ expected $7 billion to $9.5 billion range for the transaction, and less than the $11.9 billion that Gilead Sciences paid for Juno’s CAR-T rival Kite Pharma last year although Celgene’s existing relationship with Juno will have played a part in the valuation. Gilead followed the Kite deal with a smaller buyout of CAR-T firm Cell Design Labs last month.

Celgene CEO Mark Alles said that the acquisition "builds on our shared vision to discover and develop transformative medicines for patients with incurable blood cancers."

"Juno’s advanced cellular immunotherapy portfolio and research capabilities strengthen Celgene’s global leadership in hematology and adds new drivers for growth beyond 2020."

The time frame for the expected growth spurt from JCAR017 would relieve some of the mid-term growth concerns for Celgene. It's leading blood cancer therapy Revlimid (lenalidomide) is facing a patent cliff and pricing pressure in the coming years, and some of the efforts to expand its approved indications have ended in failure, including a bust as a combination with Roche’s NHL drug Rituxan.

Celgene and Juno have already started talking about pairing Revlimid and other blood cancer drugs with Juno’s CAR-T candidates. Meanwhile there are some overlaps between the companies which raise come questions. Juno’s B-cell maturation antigen (BCMA) candidate JCARH125 is now sitting alongside Celgene’s collaboration in this area with Bluebird Bio, although the company said this would "enhance" its activity in BCMA.

In addition to Juno, Celgene has also bolstered its hematology pipeline this year by acquiring San Diego-based start-up Impact Bio, adding JAK2 inhibitor candidate fedratinib, which is in development for myelofibrosis and polycythaemia vera.