Analyst Conference Summary

Juno Therapeutics

conference date: May 9, 2016 @ 2:00 PM Pacific Time
for quarter ending: March 31, 2016 (Q1, first quarter 2016)

Forward-looking statements

Overview: Clinical stage development company continued to make pipeline progress in the quarter. Believes could get first approval of JCAR015 for ALL in 2017.

Basic data (GAAP):

Revenue in the quarter was $9.8 million, up sequentially from $4.2 million and $0 in the year-earlier quarter.

Net loss was $71.1 million, up sequentially from a loss of $85.2 million, and up from a loss of $65.0 million year-earlier.

EPS (diluted) was negative $0.72, up sequentially from negative $0.89, and improved from negative $0.79 year-earlier.


2016 operating cash burn is expected between $170 and $195 million. Capital expenditures between $40 and $55 million.

Conference Highlights:

Celgene opted into the Juno Therapeutics CD19 program in April. Multiple trials were enrolled. JCAR015 for the Phase II ROCKET trial for ALL (acute lymphoblastic leukemia) is now being manufactured at the Bothell, Washington plant. Planning for an FDA submission for commercialization in 2017. Celgene paid a $50 million fee and will share global development expenses and will pay a royalty in regions where it has commercial rights (outside N. America and China).

Juno acquired AbVitro for its single-cell sequencing platform. Also working with WuXi AppTec in a new company, JW Biotechnology to develop immunotherapies in China.

Celgene exercised its annual right to buy 1.14 million Juno common shares for $47 million.

The JCAR017 Phase 1 study in relapsed/refractory B cell NHL (non-Hodgkin lymphoma) continues to enroll. Getting a very high remission rate.

JCAR014 Phase 1 ALL new trial in combination with MedImmune's durvalumab PDL-1 CPM is expected to began enrollment.

JCAR018 in a Phase 1 trial for ALL reached two clinical milestones, which triggered payment of 603,364 shares to Opus Bio. It targets CD22 and continues enrollment. Preliminary data was that 3 of 3 patients got complete remission. Dose limiting toxicity was observed over dose level 2.

"Juno began trials for solid tumor product candidates against four different targets in 2015 and early 2016 – JCAR024 (ROR-1-directed CAR T), JCAR020 (MUC-16-directed armored CAR T engineered to secrete IL-12), JCAR023 (L1-CAM-directed CAR T), and JTCR016 (WT-1- directed TCR). These trials explore treatment across a variety of solid organ tumor settings with data expected over the next 6-18 months."

The JTCR016 trial in AML, mesothelioma, and NSCLC released data on 3 mesothelioma patients. One had ongoing partial response and one had stable disease, with no safety issues.

Side effects are still a problem, but believes progress can be made on that issue.

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 $1.13 billion, down sequentially from $1.22 billion. Cash burn for the quarter was $61 million, excluding business development activities and $47 cash from Celgene. No debt. The $50 million Celgene opt-in payment was received after the quarter ended.

Operating expense of $89.7 million consisted of: $73.7 million for R&D and $16.0 million for general and administrative. Operating loss was $79.9 million. Interest income $1.3 million. Income tax benefit $7.4 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.


When can we have more clarity on use of CD22 earlier than CD19? Overall strategy is to combine CD22 with CD19. CD19 negative relapse is a big issue. Using both could get more patients into long term remission. We would like to move CD22 as monotherapy for patients who failed CD19.

How are you thinking about checkpoint modulator combinations going forward? There are so many levers we can pull now. We want strong translational research about the tumor microenvironment.

NHL regulatory strategy, would you be second to market? We are currently enrolling JCAR017 and 014. We want to be best in class as well as early to market. By controlling the input cells we could control the efficacy and safety. The data is encouraging so far for both efficacy and safety. For relapsed or refractory disease we thing a reasonable response rate and duration would make the therapy suitable for accelerated approval.

Commercial launch of CART vs. traditional products? Many prerequisites are the same as for any therapy. We do need to engineer out the complexities for providers and patients. We want the manufacturing to be invisible as possible to the clinics using the therapy. We also need more training at sites. Product reliability will be critical to success.

Solid tumor response rates, what is realistic? It is very speculative. Our objective is the ability "to provide those cells to access antigen, amplify, and mediate clinical regression." We still have to learn if this can be done out the gate or whether more needs to be done to get the cells to the tumors. The goal is it should be a solvable problem, but how many steps it takes to get there it is speculative.

There is no fundamental principle that indicates it is impossible to have a solid tumor therapy consisting of a T-cell product. Being able to find the resistance mechanisms for the tumors will provide a roadmap for subsequent trials. We can modify T-cells to make them resistant to some of these pathways.

First pediatric data? JCAR017 data has already been presented and will be updated at ASCO.

Solid tumor data? We don't have a date for data from the other trials, and then we wait for a major meeting to release them.

Our Bothel factory can take us a considerable way into our first commercial launches. Likely we will have other plants in N. America over time. In our industry we won't have inventory so some duplication would make sense.

JCAR018 neurotoxicity minimized cause? We do not fully understand the mechanism of neurotoxicity. We need to see it in more patients and higher doses to figure it out. The minimization in JCAR018 is not related to the lower dose. If 18 is less neurotoxic it could be a differentiating feature.

CD19/CD22 combination strategy is very attractive because it increases the selection pressure on the cancer. You could dose sequentially, or infuse two CARTs infused together, or put them on the same CART, or have two different binders in the cell. All are viable options and we will study them all.

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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