Analyst Conference Summary

Juno Therapeutics

conference date: November 9, 2016 @ 2:00 PM Pacific Time
for quarter ending: September 30, 2016 (Q3, third quarter)

Forward-looking statements

Overview: Pipeline development continues, with the occasional snag. Earliest possible product approval is 2018, but has plenty of cash to get there.

Basic data (GAAP):

Revenue in the quarter was $20.8 million, down sequentially from $27.6 million and up from $1.6 million in the year-earlier quarter.

Net loss was $56.9 million, up sequentially from a loss of $66.0 million, but down from a loss of $23.2 million year-earlier.

EPS (diluted) was negative $0.56, up sequentially from negative $0.64, and down from negative $0.26 year-earlier.


$220 to $250 million total cash burn in 2016. Likely to be at low end, but that will just shift the burn into 2017.

Conference Highlights:

Revenue is mostly from the Celgene partnership on CD19 therapies.

The JCAR017 Phase 1 study in relapsed/refractory B cell NHL (non-Hodgkin lymphoma) continues to enroll. Getting a encouraging remission rates and safety. Believes JCAR017 could be approved as early as 2018. The Phase I/II study by Seattle Children's interim results in pediatric and young adult r/r ALL had 93% complete remission (39 or 42 subjects). Granted orphan drug status in adult ALL and CLL. 73% complete response rate in latest data, 14% neurotoxicity that resolved safely.

JCAR014 Phase 1 ALL new trial in combination with MedImmune's durvalumab PDL-1 CPM began enrollment. Interim results from the Phase I/II advanced B cell malignancies study achieved 100% complete remission. But severe neurotoxicity was observed in 39% of patients. In CLL the OR rate was 91% with 45% complete remission, but 23% of patients had severe neurotoxicity.

JCAR015 had a clinical hold in the Phase 2 trial (ROCKET) after several patient deaths. The hold was removed on July 12, 2016, so the trial is reopened for enrollment. The deaths were related to a particular preconditioning regime that will not be used going forward. Enrolled patients at only 1 per week after restart, but no further problems, so now enrolling at regular pace. Potential approval possibly as soon as the first half of 2018.

JCAR018 (CD22) in a Phase 1 trial for ALL interim data for 3 patients showed all remained in complete remission. But there was dose-limiting neurotoxicity.

JTCR016 for refractory mesothelioma so far of three patients only one had a partial response.

In all the CD19 portfolio (JCAR 014, 015, 016, 017) will have 11 presentations at the ASH meeting in December, including additional data from the Phase 1 017 HNL trial.

Juno bought rights for a B-cell maturation antigen from MSK and Eureka Therapeutics. The BCMA CAR should start a trial in 2017.

Juno bought Redox Therapies for is adenosine A2a receptor agonist. Adenosine is directly immuno-supressive to T cells.

See Juno Therapeutics pipeline. Plans to have 9 product candidates against 6 targets by mid 2016. A 10th product candidate should be in the clinic in later 2016.

Cash and equivalents balance ended at $1.04 billion, down sequentially from $1.11 billion. Cash burn for the quarter was $59.5 million, excluding business development. No debt.

Operating expense of $79.3 million consisted of: $60.9 million for R&D and $18.4 million for general and administrative. Operating loss was $58.5 million. Interest income $1.5 million. Income tax benefit $0.6 million.

Juno has adequate cash "to last us into the next decade."

Juno continues to do fundamental science research on immune system cells that could help make more effective cancer therapies.

Q&A: [note this is my summary, not a transcript]

JCAR017, how do you see the trial population vs. competitors? Three lymphoma populations. Refractory diffuse large B cell. One group has failed 2 therapies. Then spinal B cell and other uncommon group, and some relapsed after at least 2 prior therapies. But relative to competitors, most of our patients in the ASH abstract will be refractory to the last treatment, but most had their auto transplant prior to their last treatment. As the trial progresses we should enroll enough patients in each group to get meaningful data.

BCMA timeline to clinic? First half of 2017. We are looking at strategies to add differentiation, like novel genetic signalling constructs and in combination. We have a fundamental hypothesis that the way you manufacture the cells matters.

Celgene's pick of Bluebird for BCMA, your thoughts on going it alone? BCMA is the only target where we are not partnered with Celgene. We are working on making it a best in class product. We have other technologies in our portfolio that we think can be used to provide differentiation in this disease.

CD8 v. CD4 ratio? CLL post-abrutinib phenotypes may vary between patients, we are trying to understand what may drive that. We have seen similar outcomes with JCAR017. We will continue to work to try to understand this. Both 4 and 8 are important in the expansion phase.

How much JCAR017 Phase 1 data is needed to move to a pivotal study? We are excited by the data, both safety and efficacy, with low levels of neurotoxicity. The rigor of the study is at the level of a Phase 2 trial, and we have the option to look at other dose levels.

Duration, particularly in 019 CLL trial? We believe duration of CART cell activity is related to duration of remission. Antigen recognition is a driver of expansion and remission, but there are other drivers.

JCAR017, what drives the lack of toxicity? The defined 1:1 cell ratio is an important contributor. It increases the therapeutic index. Other contributors include costymatry (sp?) domain and the manufacturing process also contribute.

Any progress in China? China is an important market with a long acceptance of cellular therapy, with a number of home-brew companies and an evolving regulatory environment. Our joint company JW hopes to start enrolling patients in the near future. They are building a state of the art manufacturing facility.

We have treatment algorithms for adverse events, including CRS (cytokine release syndrome) and neurotoxicity. We are working on indentifying higher risk patients before treatment begins. JCAR017 for NHL data to be reported at ASH is showing no severe cytokine release syndrome and a relatively low frequency of neurotoxicity. We hope we are finding the therapeutic window of efficacy and safety.

JCAR0114 with anti-PDL1 had a delay but we are actively screening patients for it.

Enrollment rates, effect of the hold? We completed the gated phase, and had continued enthusiasm for enrollment, so are on pace, and we have added new sites.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, not financial advice.

Copyright 2016 William P. Meyers