Analyst Conference Summary

Juno Therapeutics

conference date: August 3, 2017 @ 2:00 PM Pacific Time
for quarter ending: Juno 30, 2017 (Q2, second 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 $21.3 million, up 10% sequentially from $19.3 million and down 23% from $27.6 million in the year-earlier quarter.

Net loss was $100.7 million, down sequentially from a loss of $82.2 million, and down from a loss of $64.8 million year-earlier.

EPS (diluted) was negative $0.96, down sequentially from negative $0.79, and down from negative $0.64 year-earlier.


Reaffirmed 2017 cash burn at between $245 and $275 million. Capital expenditures between $22 and $27 million.

Conference Highlights:

“It has been a historic last several months for the CAR T field, highlighting the potential of these therapies for patients. Juno is well-positioned to make a major impact, particularly with the potential best-in-class profile emerging for JCAR017,” said Hans Bishop, Juno’s President and CEO. “We look forward to starting the pivotal cohort for JCAR017 this quarter as well as expanding the use of this drug into broader populations over the coming year.”

"Our confidence around the number of cancers we can treat is growing." Multiple cell therapy companies have reported transformational results in a number of diseases. Around 50,000 patients with blood cancers in the U.S. need better therapies. Manufacturing is a critical component for delivery of therapies, and Juno is confident in its competitive position to do this.

Revenue is mostly from the Celgene partnership on CD19 therapies.

Juno has 11 product candidates in clinical trials against eight different targets.

Non-GAAP results: net loss $77.5 million or $0.74 per share.

The JCAR017 for relapsed/refractory B cell NHL (non-Hodgkin lymphoma) trial continues to enroll. Updated DLBCL data for 44 "core" patients (including older patients who had never seen a response in prior lines of therapy) was presented at ASCO in June (TRANCEND trial), and enrollment continues. ORR (overall response rate) was 86% and complete response (CR) was 59%. Tolerability profile was good, but there was some cytokine release syndrome or neurotoxicity. Will start a trial as a monotherapy for CLL later this year. Goal for approval by FDA is as early as end of 2018.

JCAR014 continued a Phase 1b combination trial with MedImmune's PD-L1 investigational agent durvalumab for r/r NHL. Began a combination trial with ibrutinib in CLL. Will also start a trial in combination with JCAR017.

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 began enrolling patients 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 began a Phase I trial in r/r B cell malignancies for its CD19/4-1BB ligand armored CAR.

Juno continued 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 in lung cancer. Data could be presented at AACR in 2018.

BCMA CAR T program with MSK initiated for myeloma with first data possible later this year.

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

Important updates are likely to become available at ASH in December.

See Juno Therapeutics pipeline.

Cash and equivalents balance ended at $802 million, down $49 million sequentially from $851 million. Cash burn for the quarter was about $59.8 million, excluding business development. Cash used in operating activities was $38.0 million. No debt.

Operating expense of $124.7 million consisted of: $101.1 million for R&D and $23.6 million for general and administrative. Operating loss was $103.4 million. Interest income $2 million. Other expense $0.2 million. Income tax benefit $1.1 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 pivotal trial intended population? Plan is to start the pivotal cohort this quarter. Population will be the core group of highly refractory patients.

Infrastructure for patients treated outside transplant centers? We don't require clinical sites to have any special equipment. Apheresis can be at a separate site. We are building a supply chain to serve accounts beyond transplant centers. Our requirements for treatment are not outside the normal capabilities of larger facilities. But training will be necessary. This assumes the tolerability we have seen so far in the Transcend trial, with training including recognizing symptoms of adverse reactions.

Have you settled on a dose for Transcend? We are leaning towards using the higher dose, but have not yet made a decision.

JCAR017 turnaround time, will it be a differentiator? Commercial turn around is less than 21 days. The manufacturing must be able to smooth our the peaks and troughs in demand, must be scalable, and must be highly automated.

There has been no slowdown in demand to get into our trials, including by investigators. There are many aggressive NHL patients out there who are relapsed/refractory.

How much better does your safety profile have to be to take share from competitors? We are encouraged by our efficacy and safety data so far. Should think beyond the rate of severe CRS and NT. About two-thirds of our patients got no fever, CRS or NT, and so would not need to be admitted for monitoring or treatment.

We will be enrolling from outpatient centers, we are already doing that and will do more in the pivotal cohort.

ALL? We are looking at adult ALL clinical data to maximize the therapeutic window. But we have not finalized our strategy. With our partner we will do a pediatric ALL trial in Europe.

Our sites do not do any cryopreservation. Just chilling and shipping in an insulated box. At the plant we select and wash cells and then do cryo.

We also plan to start a JCAR017 and durvalumab study, as well at the 014 + durvalumab.

DLBCL, do you need trials in Europe to support registration there? The pivotal cohort is for the U.S. Celgene will determine the global strategy.

Multiple Myeloma, differentiation from competitors? Fully human binder, 41BB costem, defined cell product, and our binder in preclinical did not compete with soluble BCMA. Myeloma is a very significant market opportunity.

BCMA, level of expression you are studying? Our study is planned for 2018, we will have data from earlier MSK and other studies, the decision is still ahead. Our binder's relative sensitivity is high.

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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