What Celgene Now Means for Juno

The goal is to leverage T-cell therapeutic strategies to develop treatments for patients with cancer and autoimmune diseases with an initial focus on Chimeric Antigen Receptor Technology (CAR-T) and T-Cell Receptor (TCR) technologies.

Upon closing, Juno will receive an upfront payment of approximately $150 million, and in addition Celgene will purchase 9,137,672 shares of Juno’s common stock at $93.00 per share. However, it does not stop there. Celgene also will receive the right to nominate a member to Juno’s board of directors.

Both companies will share global costs and profits, with 70% allocated to Celgene and 30% allocated to Juno.

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Under the terms of the collaboration, Celgene has the option to be the commercialization partner for Juno’s oncology and cell therapy auto-immune product candidates, including Juno’s CD19 and CD22 directed CAR-T product candidates. B-Cell Maturation Antigen is excluded as a target in this collaboration.

Bob Hugin, chairman and CEO of Celgene, commented on the transaction:

This transaction strengthens Celgene’s position in the emerging and transformative area of immuno-oncology. Juno has assembled world class experts and built impressive capabilities and technologies in the areas of T cell biology and cellular therapy; we believe this long-term collaboration enhances the potential of both companies to deliver transformational therapies to patients with significant unmet medical needs.

Shares of Juno closed Monday down 0.7%, at $46.30 in a 52-week trading range of $38.00 to $69.28. In the after-hours trading session shares initially jumped up about 53% to $70.63 before coming back down to a more marginal gain of 37% to $63.69. We also saw some 2.4 million shares trade in the after-hours session.

Juno shares were indicated up 34% at $62.11 in early bird hours on Tuesday. With Juno’s market cap at $4.2 billion prior to the big pop, this is obviously a very large deal for the company. Celgene now matters handily for Juno — the company just got the bump of a buyout offer or buyout rumor, but shareholders get to keep their toe in the water if they choose to see if there is an even larger payout ahead.

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Celgene shares closed Monday down 2.5% to $114.94, in a 52-week range of $82.90 to $129.06. Celgene shares were down 0.6% at $114.22 in early trading indications on Tuesday. The stock has a consensus analyst price target of $137.15.