Analyst Conference Summary

Juno Therapeutics

conference date: March 1, 2017 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2016 (Q4, fourth quarter)

Forward-looking statements

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

Basic data (GAAP):

Revenue in the quarter was $21.2 million, up sequentially from $20.8 million and up from $4.2 million in the year-earlier quarter.

Net loss was $55.7 million, up sequentially from a loss of $56.9 million, and up from a loss of $87.4 million year-earlier.

EPS (diluted) was negative $0.51, up sequentially from negative $0.56, and up from negative $0.89 year-earlier.


Cash burn in 2017 expected between $270 and $300 million, including $22 to $25 million in capital expense. That excludes any business development spend.

Conference Highlights:

Hans Bishop, CEO, said "we continue to be optimistic about the progress we are making with JCAR017 and our pipeline more broadly. We expect 2017 will be a data-rich year of key insights, based on up to 20 ongoing trials by year end, and we plan to present data from these trials as appropriate throughout the year.”

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. At ASH presented positive results, including a 60% complete response rate and 80% overall response rate in r/r DLBCL. Pivotal trial in r/r DLBCL is expected to start in 2017. Believes JCAR017 could be approved as early as 2018. Received breakthrough designation from the FDA. JCAR017 is a defined cell product, so should not show the problems of 015.

JCAR014 began a Phase 1b combination trial with MedImmunes PD-L1 investigational agaent for r/r NHL. For CLL JCAR014 announced positive results at ASH, but there was one treatment-related death. A cohort of 014 combined with ibrutinib is planned to begin enrollment soon. Will also start a trial in combination with JCAR017.

JCAR015 in r/r adult ALL has discontinued development. It 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 had reopened for enrollment. "We remain committed to developing better treatments for patients battling ALL and believe an approach using our defined cell technology is the best platform to pursue. We intend to begin a trial with a defined cell product candidate in adult ALL next year."

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

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

"Juno plans to enroll patients in 2017 in, a Phase I trial in certain adult B cell malignancies, including r/r NHL, for a CD19 product candidate that incorporates a fully human binding domain. Juno also expects to begin a Phase I trial in r/r B cell malignancies for its CD19/4-1BB ligand armored CAR in 2017."

"Juno continues trials for solid tumor product candidates against five different targets - JCAR024 (ROR-1-directed CAR T), JCAR020 (MUC-16-directed armored CAR T engineered to secrete IL-12), JCAR023 (L1-CAM-directed CAR T), JTCR016 (WT-1- directed TCR) and a Lewis Y-directed CAR."

A fully human binding domain could help with persistence of effectiveness; a test could take place this year.

Also starting a multiple myeloma program.

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 $922 million, down sequentially from $1.04 billion. Cash burn for the quarter was about $107 million, excluding business development. No debt. High use of cash in the quarter was due to completing the manufacturing facility.

Operating expense of $76.9 million consisted of: $57.4 million for R&D and $19.5 million for general and administrative. Operating loss was $55.7 million. Interest income $1.5 million. Income tax benefit $1.5 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]

Younger patient increased risk of toxicity, how would you control for that in the future? It comes down to being able to dose more precisely, and to characterize the dose in that context. The insights from 015 are correlations, not causations. The more you can take out variability, the more you can take out risk of adverse events.

017 NHL data timeline? We are on track. In evaluating the two dosing level is the expansion rates, responses, etc. We have enrolled a significant number of new patients since ASH and hope to perhaps report more at ASCO. We are confident that the level we chose will be between the two tested levels.

Kite Pharma results, how quickly can you work, what is the efficacy and safety bar now? We don't think we need to add trial sites for the pivotal cohort. We don't think we need a new trial, just a new cohort. We don't have all the Kite data. What they reported is in line with what they reported at ASH. We still expect to be best in class with our defined cell therapies.

Attributes you are working on vs. toxicity? There are 3 parts to the equation. Patient characteristics, the product attributes, and the disease setting. There is a lower risk of severe toxicities in adult ALL. Equation will change in CLL and NHL. Our look at attributes has been retrospective. In 017 we have control over these attributes, so can change it in different disease settings. We intend to submit our findings to a peer-reviewed journal and also to a meeting.

JCAR017, plan to go forward? We will use a modified defined cell, so it will get a new number and benefit from our 015 findings for ALL.

Competition from Kite and Novartis? We believe the type of cell matters, so the clinical profiles will differ. So JCAR 017 could be best in class.

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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 2017 William P. Meyers