Maxim analyst Jason McCarthy provides insight on Juno Therapeutics Inc (NASDAQ:JUNO) amid the hold placed on the firm’s JCAR015 ROCKET study, which arose from patient deaths from cerebral edema that has led the stock to plunge to new lows. In a time of caution and concern, the firm has shifted focus to pipeline drugs JCAR04 and JCAR017 in indications for leukemia and lymphoma.

The analyst notes, “JCAR014 and JCAR017 are similar, and Juno is using JCAR014 as a translational product to further the development of JCAR017.” Recently at the American Society of Hematology’s (ASH) Annual Meeting and Exposition, JCAR014 data was presented in relapsed/refractory Chronic Lymphocytic Leukemia (r/r CLL). From McCarthy’s perspective, the results came across as “impressive,” in which the drug garnered a complete response rate of 88% in 17 efficacy evaluable patients.

Although, once again, cerebral edema reared its ominous head, and in combination with grade 5 Cytokine Release Syndrome (CRS) claimed another casualty.

For McCarthy, “We recognize that these are very sick patients and as such see the clinical benefit of JCAR014 as outweighing the risks. The patient deaths (while terrible) did not result in a clinical hold, and the CLL trial is continuing with another study in combination with ibrutinib (Imbruvica) planned for early next year. Given what happened in the ROCKET study just a few weeks ago, the reminder of risk associated with cerebral edema is still fresh.”

“While we have concerns around cerebral edema for JCAR014, it is still early and it will take more patients and more time to better understand the benefits vs. the risk, as well as if this risk will apply to JCAR017. With that said, we remain believers in JCAR014, JCAR017 and Juno’s other CAR programs,” McCarthy concludes, recognizing a great deal of potential still existing for upside.

Therefore, even with expressive concerns, the analyst nonetheless reiterates a Buy rating on JUNO with a price target $34, which represents a just under 67% increase from where the shares last closed.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, Jason McCarthy is ranked #4,133 out of 4,240 analysts. McCarthy has a 27% success rate and loses 15.4% in his yearly returns. When suggesting JUNO, McCarthy forfeits 29.4% in average profits on the stock.

TipRanks analytics demonstrate JUNO as a Buy. Based on 8 analysts polled in the last 3 months, 5 rate a Buy on JUNO, while 3 maintain a Hold. The 12-month average price target stands at $39.00, marking a 91% upside from where the stock is currently trading.  screen-shot-12-05-16-at-11-19-pm

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