Company Update (NASDAQ:JUNO): Juno Therapeutics Inc Reports Third Quarter 2015 Financial Results


Juno Therapeutics Inc (NASDAQ:JUNO), a biopharmaceutical company focused on re-engaging the body’s immune system to revolutionize the treatment of cancer, today reported business highlights and financial results for the third quarter of 2015.

“We continue to make progress in the clinic and building our capabilities. We began a trial that we expect will support registration of JCAR015 in adult ALL. We started a multi-center Phase I trial for JCAR017 in adult NHL. We completed engineering runs at our manufacturing facility in Bothell. We also continued building out our internal research organization and integrated our two acquisitions,” stated Hans Bishop, Juno’s CEO. “Data presented in September suggests that the improved expansion and persistence of JCAR014 lead to clinical benefit. We look forward to presenting more data from our pipeline, in conjunction with our partners, at the upcoming ASH conference.”

Third Quarter 2015 and Recent Corporate Highlights

Clinical Progress:

  • The U.S. Food and Drug Administration (FDA) cleared Juno’s investigational new drug (IND) application for JCAR015 for the treatment of adult patients with relapsed/refractory (r/r) acute lymphoblastic leukemia (ALL). The Phase 2 study began in the third quarter and will serve as Juno’s U.S. registration trial in adult r/r ALL.
  • The JCAR017 Phase 1 study in r/r B cell non-Hodgkin lymphoma (NHL) began in the third quarter. The trial is the backbone component of Juno’s multi-pronged strategy in NHL.
  • The U.S. FDA cleared Juno’s IND application for the MUC-16 & IL-12 “armored” CAR for the treatment of patients with recurrent ovarian cancer.

Corporate News:

  • Entered into a ten-year collaboration with Celgene to leverage T cell therapeutic strategies with an initial focus on CAR T and TCR therapies. Celgene gained the option to commercialize Juno programs outside North America and co-promote certain programs globally. Celgene also purchased 9.1 million Juno shares. Juno has gained the option to co-develop, co-promote and share profits with respect to select Celgene programs. Juno also received $1.0 billion in total payments, including $150.2 million under the collaboration agreement and $849.8 million in connection with the stock purchase. The collaboration became effective on July 31 after an early termination of the Hart-Scott-Rodino Antitrust waiting period.
  • Appointed Robert Azelby as Executive Vice President, Chief Commercial Officer. Mr. Azelby is responsible for developing a comprehensive commercial strategy for the company’s product candidates and building the commercial organization.

Third Quarter 2015 Financial Results

  • Cash Position: Cash, cash equivalents, and marketable securities as of September 30, 2015 were $1.27 billioncompared to $313.4 million at June 30, 2015 and $474.1 million as of December 31, 2014. The Company sold 9,137,672 shares of its common stock to Celgene for $93.00 per share resulting in proceeds of $849.8 millionand received a cash payment of $150.2 million in connection with the collaboration agreement.
  • Cash Burn: Excluding the cash inflow of $1.0 billion received in connection with the Celgene stock purchase and collaboration agreement, cash burn in the three months ended September 30, 2015 was $45.7 million. This included cash paid of $14.2 million primarily related to the build out of the company’s manufacturing facility. The additional burn of $31.5 million was primarily due to cash used in operations related to the overall growth of Juno’s business, including the hiring of key talent. Excluding the cash inflow of $1.0 billion in connection with the Celgene stock purchase and collaboration agreement, cash burn in the nine months ended September 30, 2015 was $206.4 million.
  • Revenue: Revenue was $1.6 million and $14.1 million in the three and nine months ended September 30, 2015, respectively. The third quarter included $1.3 million recognized in connection with the Celgene collaboration agreement.
  • R&D Expenses: Research and development expenses in the three and nine months ended September 30, 2015, inclusive of non-cash expenses and computed in accordance with GAAP, were $11.5 million and $129.5 million, respectively, compared to $13.0 million and $22.4 million in the three and nine months endedSeptember 30, 2014, respectively. The decrease of $1.5 million in the three months ended September 30, 2015compared to the same period in 2014 was primarily due to a decline in the estimated value of the potential success payments to the Fred Hutchinson Cancer Research Center (FHCRC) and Memorial Sloan Kettering Cancer Center (MSK), which resulted in a gain of $25.6 million in the three months ended September 30, 2015, almost completely offset by increased R&D activity. The gain related to the success payments recorded in the three months ended September 30, 2015 was largely due to a decrease in the company’s stock price as ofSeptember 30, 2015 compared to June 30, 2015. During the three and nine months ended September 30, 2015, respectively, as compared to the same periods in 2014, Juno experienced increased costs related to expanding the company’s overall research and development capabilities, acquiring external technologies, hiring key talent, advancing programs at its founding institutions, and non-cash stock-based compensation expense. The nine months ended September 30, 2015 included an expense related to the company’s success payments of $17.3 million.
  • Non-GAAP R&D Expenses: Non-GAAP research and development expenses in the three and nine months ended September 30, 2015 were $35.8 million and $76.6 million, respectively. Non-GAAP research and development expenses in 2015 exclude the following:
  • A gain of $25.6 million and an expense of $17.3 million for the three and nine months ended September 30, 2015, respectively, associated with the change in estimated value and elapsed accrual period for Juno’s potential success payment liabilities to FHCRC and MSK.
  • Upfront payments related to license agreements of $30.8 million for the nine months ended September 30, 2015 associated with the Editas and Fate Therapeutics collaborations.
  • Non-cash stock-based compensation expense of $1.3 million and $4.8 million for the three and nine months ended September 30, 2015, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.

Non-GAAP research and development expenses in the three and nine months ended September 30, 2014 were$11.9 million and $21.0 million, respectively, and exclude success payment expense of $1.1 million and $1.5 million, respectively.

  • G&A Expenses: General and administrative expenses in the three and nine months ended September 30, 2015, inclusive of non-cash expenses and computed in accordance with GAAP, were $13.6 million and $35.2 million, respectively, compared with $5.4 million and $13.4 million in the three and nine months ended September 30, 2014, respectively. The increase of $8.2 million and $21.8 million in the three and nine months endedSeptember 30, 2015, respectively, was primarily due to increased personnel expenses, including non-cash stock-based compensation expense, costs associated with the Stage, X-Body, Celgene, Fate, and Editas transactions, an increase in patent fees and corporate legal fees, and costs associated with being a public company.
  • GAAP Net Loss Attributable to Common Stockholders: Net loss attributable to common stockholders for the three and nine months ended September 30, 2015 was $23.2 million, or $0.26 per share, and $154.2 million, or$1.80 per share, respectively. This compares to $71.9 million, or $10.50 per share, and $119.0 million, or$17.50 per share, respectively, for the same periods in 2014.
  • Non-GAAP Net Loss Attributable to Common Stockholders: Non-GAAP net loss attributable to common stockholders, which incorporates the non-GAAP R&D expense, for the three and nine months endedSeptember 30, 2015 was $47.6 million, or $0.53 per share, and $101.2 million, or $1.18 per share, respectively.For the three and nine months ended September 30, 2014, non-GAAP net loss attributable to common stockholders, which incorporates the non-GAAP R&D expense, was $18.3 million, or $2.68 per share, and$38.5 million, or $5.65 per share, respectively. Non-GAAP net loss attributable to common stockholders for the three and nine months ended September 30, 2014 excludes the following:
  • Success payment expense of $1.1 million and $1.5 million for the three and nine months ended September 30, 2014, respectively, associated with the change in estimated value and elapsed accrual period for Juno’s potential success payment liabilities to FHCRC and MSK.
  • Non-cash stock-based compensation expense of $0.4 million and $0.9 million for the three and nine months ended September 30, 2014, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014. This expense was classified as general and administrative expense in the three and nine months September 30, 2014 due to the nature of the work performed during this time.
  • Non-cash convertible preferred stock option expense of $10.7 million in the nine months ended September 30, 2014.
  • A non-cash charge of $52.1 million and $67.5 million for the three and nine months ended September 30, 2014related to deemed dividends upon issuance of convertible preferred stock.

A reconciliation of GAAP net loss to non-GAAP net loss is presented below under “Non-GAAP Financial Measures.”

2015 Financial Guidance

Juno continues to expect 2015 cash burn, excluding cash inflows or outflows from business development activities and litigation, to be at the higher end of its guidance of between $125 million and $150 million. (Original Source)

Shares of Juno Therapeutics are down 4.78% to $49.35 in after-hours trading. JUNO has a 1-year high of $69.28 and a 1-year low of $33. The stock’s 50-day moving average is $47.33 and its 200-day moving average is $47.38.

On the ratings front, Juno Therapeutics has been the subject of a number of recent research reports. In a report issued on October 29, Standpoint Research analyst Ronnie Moas downgraded JUNO to Hold. Separately, on September 16, J.P. Morgan’s Cory Kasimov maintained a Buy rating on the stock and has a price target of $70.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ronnie Moas and Cory Kasimov have a total average return of 7.4% and 3.0% respectively. Moas has a success rate of 70.2% and is ranked #18 out of 3832 analysts, while Kasimov has a success rate of 50.6% and is ranked #1062.

Juno Therapeutics Inc is a biopharmaceutical company. The Company is engaged in revolutionizing medicine by re-engaging the body’s immune system to treat cancer.