JUNO THERAPEUTICS, INC. (NASDAQ:JUNO)
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From May 2019 to May 2024
– Nine product candidates in clinical trials against eight different
targets –
– Pivotal trial for JCAR017 in r/r DLBCL expected to start in 2017 –
– Phase I JCAR017 demonstrates 80% overall response and 60% complete
response in r/r DLBCL –
– Discontinuing development of JCAR015 in r/r adult ALL to focus on
defined cell product in this setting –
– 2016 year end cash position of $922.3 million –
– 2017 cash burn guidance of $270 million to $300 million, including
$22 million to $27 million in capital expenditures –
– Conference call today at 5:00 p.m. Eastern Time –
Juno Therapeutics, Inc. (NASDAQ: JUNO), a biopharmaceutical company
developing innovative cellular immunotherapies for the treatment of
cancer, today reported financial results and business highlights for the
fourth quarter and year ended December 31, 2016.
“2016 was a year of progress and learning for Juno and the cancer
immunotherapy field. We continue to experience encouraging signs of
clinical benefit in our trial addressing NHL, but we also recognize the
unfortunate and unexpected toxicity we saw in our trial addressing ALL
with JCAR015. We have decided not to move forward with the ROCKET trial
or JCAR015 at this time, even though it generated important learnings
for us and the immunotherapy field. 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. We look forward to sharing detailed data supporting our
learnings from the ROCKET trial at an upcoming scientific conference,"
said Hans Bishop, Juno’s President and Chief Executive Officer. "Looking
forward into 2017, 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.”
2016 and Recent Corporate Highlights
Clinical Update:
-
CD19 Portfolio – Meaningful developments with Juno's
CD19-directed portfolio across B cell malignancies including relapsed
/ refractory (r/r) non-Hodgkin lymphoma (NHL), r/r chronic lymphocytic
leukemia (CLL), and r/r acute lymphoblastic leukemia (ALL):
-
NHL – Investigators presented interim results at the
American Society of Hematology meeting in December 2016 (ASH 2016)
from the Phase I TRANSCEND study in patients with r/r diffuse
large B cell lymphoma (DLBCL), follicular lymphoma grade 3B, and
mantle cell lymphoma (MCL) who were treated with
fludarabine/cyclophosphamide (flu/cy) lymphodepletion and JCAR017.
Topline results as of a data cutoff date of November 23, 2016
included a 12/20 (60%) complete response rate in patients with r/r
DLBCL (N=19) and follicular lymphoma grade 3B (N=1) treated with a
single dose of JCAR017 at dose level 1 (5x107 cells).
No severe cytokine release syndrome (sCRS) was observed; grade 3-4
neurotoxicity was observed in 3/22 (14%) patients, and of those
evaluable for reversibility (N=2), all resolved. In addition, the
side effect profile of JCAR017 plus its cell persistence suggest
the potential for combination therapy. The Phase I TRANSCEND trial
continues, enrolling more patients at dose levels 1 and 2. Juno
intends to initiate a pivotal trial in the U.S. in patients with
r/r DLBCL in 2017.
-
The Phase Ib combination trial of JCAR014 and MedImmune’s
investigational programmed death ligand 1 (PD-L1) immune
checkpoint inhibitor, durvalumab, in patients with r/r NHL has
begun. The investigational new drug application (IND) has
cleared for, and 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.
-
CLL – Investigators presented interim results at ASH 2016
from a Phase I/II study of heavily pre-treated patients with CLL
who failed treatment with ibrutinib, a standard-of-care treatment
for high-risk and elderly individuals with CLL. Fifteen of 17
(88%) efficacy-evaluable patients who had bone marrow disease at
the start of the trial and treated with flu/cy at the two lowest
doses of JCAR014 had a complete marrow response by flow cytometry
as of the data cutoff date of December 4, 2016. Fourteen of the
complete bone marrow response patients had a response assessment
by IgH deep sequencing, a more sensitive measure than flow
cytometry, with 7/14 (50%) having no detectable disease. As of the
data cutoff date, all seven of these patients were alive and
progression free with follow-up ranging from 2 to 24 months. Two
of 24 (8%) patients developed grade 3-5 sCRS and 6/24 (25%)
patients developed grade 3-5 neurotoxicity. There was one
treatment-related mortality (4%) in the CLL portion of the trial
in a patient who received flu/cy lymphodepletion, with both grade
5 sCRS and cerebral edema. Plans to study JCAR014 in combination
with ibrutinib in CLL are underway, with a cohort expected to
begin enrollment in early 2017. Juno is planning to file an IND in
2017 in support of a potential Juno-sponsored Phase I/II trial
with JCAR017 in CLL.
-
ALL – Juno experienced a setback in 2016 to its
adult r/r ALL development plans when a greater than expected
incidence of severe neurotoxicity was observed, along with five
deaths from cerebral edema, in patients treated in the Phase II
trial with JCAR015 in adult patients with r/r ALL, referred to as
the ROCKET trial. The Phase II trial was placed on clinical hold
by the FDA briefly in July 2016. In November 2016, the trial was
again placed on hold and has remained on hold while Juno conducted
an investigation into the toxicity. Through the investigation Juno
identified multiple factors that may have contributed to this
increased risk, including patient specific factors, the
conditioning chemotherapy patients received, and factors related
to the product. Although Juno believes there are protocol
modifications and process improvements that could enable Juno to
proceed with JCAR015 in clinical testing in adult r/r ALL, Juno
would first need to establish preliminary safety and dose in a
Phase I trial. As a result of the timing delay that would entail
and Juno’s belief that it has other product candidates in its
pipeline that are likely to provide improved efficacy and
tolerability, Juno, in collaboration with partner Celgene, has
made a strategic decision to cease development of JCAR015 at this
time and to redirect associated resources to the development of a
defined cell product candidate in the adult r/r ALL setting.
-
As for pediatric ALL, investigators presented results at ASH
2016 from the Phase I portion of the Phase I/II Pediatric
Leukemia Adoptive Therapy-02 (PLAT-02) study with JCAR017 in
43 evaluable children and young adults with r/r CD19-positive
ALL. The presentation updated data previously presented
at ASCO in June 2016: 40/43 (93%) patients experienced a
minimal residual disease (MRD)-negative complete remission
(CR) as measured by flow cytometry as of the data cutoff date
of July 19, 2016. In patients who received preconditioning
with flu/cy lymphodepletion, 14/14 (100%) patients achieved a
MRD-negative CR. The estimated 12-month event-free survival
across all patients in the trial was 50.8% (95%CI 36.9, 69.9)
and overall survival (OS) was 69.5% (95%CI 55.8, 86.5). Grade
3-4 neurotoxicity and sCRS were each observed in 10/43 (23%)
patients.
-
Across our CD19 portfolio, the most common severe
treatment-related side effects are sCRS and severe neurotoxicity,
including several cases of fatal cerebral edema. Other treatment
emergent adverse events observed in at least 25% of patients
across our CD19 product candidates include cytopenias, febrile
neutropenia, electrolyte abnormalities, hypotension, infections,
pyrexia, fatigue, and hyperglycemia. All of Juno’s product
candidates are investigational and their safety and efficacy have
not been established.
-
Pipeline Portfolio – Juno continues to conduct clinical trials
beyond the CD19 target:
-
JCAR018 – This CD22-directed, fully-human CAR T cell
product candidate has the potential to treat or prevent
CD19-negative relapses. Investigators from the National Cancer
Institute (NCI) presented early data from the trial at ASH 2016,
with 7/8 (88%) of r/r ALL patients achieving a MRD-negative CR at
dose level 2 (1x106 cells/kg) as measured by flow
cytometry, as of a data cutoff date of October 4, 2016. Three of 7
(43%) patients who achieved an MRD-negative CR at dose level 2
were in ongoing remission ranging from 3 to 12 months. This trial
continues to enroll patients. Combining a CD19-directed therapy
and a CD22-directed therapy may increase the selection pressure on
the cancer and significantly reduce the overall risk of relapse,
particularly in patients with ALL. Juno is currently investigating
pre-clinical constructs to better understand the optimal way to
target these two targets in the same product.
-
JTCR016 – This WT-1-directed, T cell receptor (TCR) cell
product candidate is currently being studied in acute myeloid
leukemia (AML), refractory mesothelioma, and non-small cell lung
cancer. In the first three solid organ tumor patients treated as
of the data cutoff date of April 1, 2016, all with mesothelioma,
preliminary data presented at the American Association for Cancer
Research Annual Meeting 2016 showed one patient with an ongoing
partial response to the WT-1 TCR and one with stable disease. The
clinical activity appeared to correlate with the pharmacokinetics
of the engineered T cells, as the patient with the partial
response had the best T cell expansion and persistence. JTCR016
was generally well-tolerated in these three refractory
mesothelioma patients, with no evidence of sCRS or severe
neurotoxicity.
-
Announced breakthrough therapy designation and access to the
Priority Medicines (PRIME) scheme for investigational drug JCAR017.
JCAR017 received breakthrough therapy designation from the FDA for the
treatment of patients with r/r aggressive large B-cell NHL, including
DLBCL, not otherwise specified (de novo or transformed from indolent
lymphoma), primary mediastinal B-cell lymphoma (PMBCL) or Grade 3B
follicular lymphoma. In addition, the European Medicines
Agency (EMA) Committee for Medicinal Products for Human Use (CHMP) and
Committee for Advanced Therapies (CAT) have granted JCAR017 access to
the PRIME scheme for r/r DLBCL.
-
Began manufacturing multiple product candidates at the Juno
manufacturing plant in Bothell, WA in 2016.
-
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.
-
Continued collaboration with Celgene to leverage T cell
therapeutic strategies with an initial focus on CAR T and TCR
therapies. In April 2016, Celgene exercised its option to develop and
commercialize CAR product candidates from Juno’s CD19 program outside
of North America and China. Celgene paid Juno an option exercise fee
of $50.0 million and the companies now generally share worldwide
research and development expenses for CAR product candidates in the
CD19 program. Celgene has commercial rights outside of North America
and China and will pay Juno a royalty at a percentage in the mid-teens
on any future net sales in Celgene's territories of CAR therapeutic
products developed through the CD19 program. Juno retains
commercialization rights in North America and China.
In March 2016, Celgene exercised its annual right to purchase additional
shares of the Company’s common stock to “top-up” its ownership interest
in the Company. Celgene purchased 1,137,593 shares at a price of $41.32
per share, for an aggregate cash purchase price of $47.0 million.
-
Completed two acquisitions, which substantially increased
Juno’s capabilities, including:
-
AbVitro, a leading next-generation single cell sequencing platform
company that has augmented Juno's capabilities to create
best-in-class engineered T cells against a broad array of cancer
targets, including significantly improving the speed of generating
TCR binders, while also enabling comprehensive profiling of
functional immune repertoires with cancer tissues. Juno and
Celgene have agreed in principle to enter an agreement to license
Celgene a subset of the acquired technology and grant Celgene
options to certain related potential product rights emanating from
the acquired technology.
-
RedoxTherapies, a privately held company with an exclusive license
to vipadenant, a small molecule adenosine A2a receptor antagonist
that has the potential to disrupt important immunosuppressive
pathways in the tumor microenvironment in certain cancers. Juno
intends to explore this molecule in combination with its
engineered T cell platform and may over time explore it in other
areas as well. The upfront consideration for the RedoxTherapies
acquisition was $10.0 million in cash. The seller is also eligible
to receive payments upon the achievement of clinical, regulatory,
and commercial milestones.
-
Completed licensing transactions to expand Juno’s research and
development capabilities, including:
-
Memorial Sloan Kettering Cancer Center (MSK) and Eureka
Therapeutics, Inc. for innovative, fully-human binding domains
targeting B cell maturation antigen (BCMA), along with antibodies
against two additional undisclosed multiple myeloma targets to be
used for the potential development and commercialization of CAR T
cell therapies for patients with multiple myeloma. MSK and Eureka
Therapeutics received an undisclosed upfront payment and are
eligible to receive additional payments upon the achievement of
undisclosed clinical, regulatory, and commercial milestones, and
royalties on net sales. Juno has begun a Phase I trial with a
BCMA-directed CAR product candidate at MSK in patients with
multiple myeloma.
-
Defeated an attempt to invalidate a patent exclusively licensed by
Juno and sued Kite Pharma, Inc., regarding a CAR T
technology that can be used, for example, for the treatment of B cell
malignancies. In August 2015, Kite filed a petition with the U.S.
Patent & Trademark Office (USPTO) for inter partes review
in an attempt to invalidate U.S. Patent No. 7,446,190 by challenging
all of its claims. Following proceedings, the USPTO Patent Trial and
Appeal Board issued a final written decision upholding all the claims
of this patent. Kite is appealing this decision to the U.S. Court of
Appeals for the Federal Circuit. Juno exclusively licenses the ’190
patent, titled “Nucleic Acids Encoding Chimeric T Cell Receptors,”
from Sloan Kettering Institute for Cancer Research, an affiliate
of MSK. The patent covers, among other things, a construct for a
CD19-targeted CAR T cell treatment that employs a certain CD28
costimulatory domain. In addition, Juno is suing Kite, seeking a
declaratory judgment that Kite’s lead product candidate, KTE-C19, will
infringe the patent when commercially produced.
-
Formed JW Therapeutics (Shanghai) Co., Ltd., a new company in
China along with WuXi AppTec, with a mission to develop novel
cell-based immunotherapies for patients with hematologic and solid
organ cancers in China. The new company will leverage Juno's
world-class CAR and TCR technologies and WuXi AppTec's research and
development and manufacturing platform and local expertise.
-
Announced the opening of a new, best-in-class clinical trials unit
dedicated to immuno-oncology, in collaboration with the University
of Washington, the Seattle Cancer Care Alliance, and the Fred
Hutchinson Cancer Research Center (FHCRC). The clinical trials unit
has been established to accelerate the clinical care of patients and
the generation of translational medicine insights with cutting-edge
immuno-oncology therapeutic candidates.
-
Hired key talent, including the appointment of Corsee Sanders
as Executive Vice President and Head of Development Operations.
Fourth Quarter and 2016 Financial Results
-
Cash Position: Cash, cash equivalents, and marketable
securities as of December 31, 2016 were $922.3 million compared to
$1.22 billion as of December 31, 2015.
-
Cash Burn: Cash burn in 2016, excluding cash inflows and
outflows from business development activities, was $232.2 million,
consistent with guidance of $220.0 million to $250.0 million. Included
in cash burn in 2016 was $56.2 million for property and equipment, of
which $18.2 million was for the purchase of Juno's manufacturing
facility. Excluding cash inflows and outflows from business
development activities, cash burn in 2015 was $147.8 million including
$28.2 million for the build out of Juno's manufacturing facility and
general lab equipment. The cash burn increase of $84.4 million was
primarily driven by cash outflows in connection with the overall
growth of the business including clinical, manufacturing, and
research, costs to build out Juno's headquarters facility, and
purchases of manufacturing equipment. These increases were offset by
$19.4 million received from Celgene for reimbursement of costs
incurred by Juno in connection with the CD19 program.
Cash burn in the fourth quarter of 2016, excluding cash inflows and
outflows from business development activities, was $106.6 million
including $38.4 million for the purchase of property and equipment, of
which $18.2 million was for the purchase of Juno's manufacturing
facility. Cash burn in the fourth quarter of 2015 was $51.4 million,
including $4.8 million for capital expenditures. The cash burn increase
of $55.2 million was primarily due to cash outflows in connection with
the overall growth of the business, including clinical, manufacturing,
and research costs, the purchase of Juno's manufacturing facility, build
out of its new headquarters facility, and purchase of manufacturing
equipment. These increases were offset by $10.2 million received from
Celgene for reimbursement of costs incurred by Juno in connection with
the CD19 program.
-
Revenue: Revenue for the three and twelve months ended December
31, 2016 was $21.2 million and $79.4 million, respectively, compared
to $4.2 million and $18.2 million for the three and twelve months
ended December 31, 2015, respectively. The increases of $17.0 million
and $61.2 million in the three and twelve months ended December 31,
2016, respectively, were due primarily to revenue recognized in
connection with the Celgene collaboration and CD19 opt-in.
-
R&D Expenses: Research and development expenses for the
three and twelve months ended December 31, 2016, inclusive of non-cash
expenses and computed in accordance with GAAP, were $57.4 million and
$264.3 million, respectively, compared to $75.6 million and $205.2
million for the same periods in 2015. The increase for the twelve
months ended December 31, 2016 was primarily due to increased costs to
execute Juno’s clinical development strategy, manufacture its product
candidates, expand its overall research and development capabilities,
milestones achieved in 2016, and an increase in stock-based
compensation expense. These increases were offset by lower costs to
acquire technology and gains recorded in connection with the change in
value of the success payment and contingent consideration liabilities.
The decrease for the three months ended December 31, 2016 was
primarily due to gains recorded in connection with the change in value
of the success payment and contingent consideration liabilities,
partially offset by increased costs to execute Juno’s clinical
development strategy, manufacture its product candidates, expand its
overall research and development capabilities, and an increase in
stock-based compensation expense. For the three and twelve months
ended December 31, 2016, Juno recorded gains of $11.7 million and
$32.5 million, respectively, related to Juno’s success payment
liability, compared to expenses of $34.3 million and $51.6 million for
the three and twelve months ended December 31, 2015.
-
Non-GAAP R&D Expenses: Non-GAAP research and development
expenses for the three and twelve months ended December 31, 2016 were
$73.1 million and $287.6 million, respectively, compared to $41.1
million and $116.5 million for the same periods in 2015. Non-GAAP
research and development expenses for the three and twelve months
ended December 31, 2016 include $8.6 million and $34.5 million of
stock-based compensation expense, respectively, compared to $3.6
million and $10.9 million for the same periods in 2015. Non-GAAP
research and development expenses in 2016 exclude the following:
-
A gain of $11.7 million and $32.5 million for the three and twelve
months ended December 31, 2016, respectively, associated with the
change in the estimated fair value and elapsed service period for
Juno’s potential success payment liabilities to FHCRC and MSK.
-
Non-cash stock-based compensation expense of $0.6 million and $3.9
million for the three and twelve months ended December 31, 2016,
respectively, related to a 2013 restricted stock award to a
co-founding director that became a consultant upon his departure
from Juno’s board of directors in 2014.
-
A gain of $4.5 million and $9.7 million for the three and twelve
months ended December 31, 2016, respectively, associated with the
change in the estimated fair value of the contingent consideration
liabilities recorded in connection with the Stage and X-Body
acquisitions.
-
Upfront payments related to technology licensing and the
RedoxTherapies acquisition of $15.0 million for the twelve months
ended December 31, 2016.
-
Non-GAAP research and development expenses in 2015 exclude the
following:
-
An expense of $34.3 million and $51.6 million for the three and
twelve months ended December 31, 2015, respectively, associated
with the change in estimated fair value and elapsed accrual period
for Juno’s potential success payment liabilities to FHCRC and MSK.
-
Non-cash stock-based compensation expense of $1.4 million and $6.2
million for the three and twelve months ended December 31, 2015,
respectively, related to a 2013 restricted stock award to a
co-founding director that became a consultant upon his departure
from Juno’s board of directors in 2014.
-
A gain of $1.1 million for the fourth quarter of 2015 in the
estimated fair value of the contingent consideration recorded in
connection with the Stage and X-Body acquisitions.
-
Upfront payments related to license agreements of $30.8 million
for the twelve months ended December 31, 2015 associated with the
Editas and Fate Therapeutics collaborations.
-
G&A Expenses: General and administrative expenses on a GAAP
basis for the three and twelve months ended December 31, 2016 were
$19.5 million and $70.7 million, respectively, compared to $16.0
million and $57.2 million for the same periods in 2015. The increase
of $3.5 million in the fourth quarter of 2016 compared to the same
period in 2015 was due to an increase in consulting costs related to
commercial readiness and legal costs, offset by decreased costs
incurred to support business development activities. The increase of
$13.5 million in 2016 compared to 2015 was primarily due to increased
personnel costs, including stock-based compensation, and increased
consulting costs related to commercial readiness, offset by decreased
costs incurred to support business development activities.
General and administrative expenses include $5.2 million and $21.0
million of non-cash stock-based compensation expense for the three and
twelve months ended December 31, 2016, respectively, compared to $5.4
million and $14.9 million for the same periods in 2015.
-
GAAP Net Loss: Net loss for the three and twelve months ended
December 31, 2016 was $52.8 million, or $0.51 per share, and $245.6
million, or $2.42 per share, respectively, compared to $85.2 million,
or $0.89 per share and $239.4 million, or $2.72 per share for the same
periods in 2015.
-
Non-GAAP Net Loss: Non-GAAP net loss, which incorporates the
non-GAAP R&D expense, for the three and twelve months ended December
31, 2016 was $68.5 million, or $0.65 per share, and $268.9 million, or
$2.65 per share, respectively, compared to $50.7 million, or $0.53 per
share, and $150.7 million, or $1.72 per share, respectively, for the
same periods in 2015.
A reconciliation of GAAP net loss to non-GAAP net loss is presented
below under “Non-GAAP Financial Measures.”
2017 Financial Guidance
Juno expects 2017 cash burn, excluding cash inflows or outflows from
upfront payments related to business development activities, of between
$270 million and $300 million.
-
Operating burn estimated to be between $245 million and $275 million.
-
Capital expenditures estimated to be between $22 million and $27
million, the majority of which are related to one-time infrastructure
build-outs.
Conference Call Information
Juno will host a conference call today to review Juno’s financial
results for the fourth quarter and year ended December 31, 2016
beginning at 2:00 p.m. Pacific Time (PT)/5:00 p.m. Eastern Time (ET).
Analysts and investors can participate in the conference call by dialing
(855) 780-7198 for domestic callers and (631) 485-4870 for international
callers, using the conference ID# 60783648.
The webcast can be accessed live on the Investor Relations page of
Juno's website, www.JunoTherapeutics.com,
and will be available for replay for 30 days following the call.
About Juno
Juno Therapeutics is building a fully integrated biopharmaceutical
company focused on developing innovative cellular immunotherapies for
the treatment of cancer. Founded on the vision that the use of human
cells as therapeutic entities will drive one of the next important
phases in medicine, Juno is developing cell-based cancer immunotherapies
based on chimeric antigen receptor and high-affinity T cell receptor
technologies to genetically engineer T cells to recognize and kill
cancer. Juno is developing multiple cell-based product candidates to
treat a variety of B-cell malignancies as well as solid tumors. Several
product candidates have shown compelling clinical responses in clinical
trials in refractory leukemia and lymphoma conducted to date. Juno's
long-term aim is to leverage its cell-based platform to develop new
product candidates that address a broader range of cancers and human
diseases. Juno brings together innovative technologies from some of the
world's leading research institutions, including the Fred Hutchinson
Cancer Research Center, Memorial Sloan Kettering Cancer Center, Seattle
Children's Research Institute, the University of California, San
Francisco, and The National Cancer Institute. Juno Therapeutics has an
exclusive license to the St. Jude Children’s Research Hospital patented
technology for CD19-directed product candidates that use 4-1BB, which
was developed by Dario Campana, Chihaya Imai, and St. Jude Children’s
Research Hospital. Juno's product candidate JCAR017 was developed in
collaboration with SCRI and others.
About the Juno-Celgene Collaboration
Celgene Corporation and Juno Therapeutics formed a collaboration in June
2015 under which the two companies will leverage T cell therapeutic
strategies to develop treatments for patients with cancer and autoimmune
diseases with an initial focus on chimeric antigen receptor (CAR) and T
cell receptor (TCR) technologies. In April 2016, Celgene exercised its
option to develop and commercialize the Juno CD19 program outside North
America and China.
Forward-Looking Statements
This press release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934, including statements regarding Juno’s mission,
progress, and business plans; clinical benefits; clinical trial results
and the implications thereof; clinical trial plans and regulatory
approval timelines; timing of future clinical data; the potential of
CD22/CD19 combinations, combinations of CAR T cells with checkpoint
inhibitors, and CAR T constructs with fully human binding domains; the
potential of acquired or licensed technology and capabilities; the
potential of the Celgene collaboration; the potential of JW Therapeutics
(Shanghai) Co., Ltd.; the timing or outcome of any dispute resolution
proceedings; and 2017 cash burn forecast. Forward-looking statements are
subject to risks and uncertainties that could cause actual results to
differ materially from such forward-looking statements, and reported
results should not be considered as an indication of future performance.
These risks and uncertainties include, but are not limited to, risks
associated with: the success, cost, and timing of Juno's product
development activities and clinical trials; Juno's ability to obtain
regulatory approval for and to commercialize its product candidates;
Juno's ability to establish a commercially-viable manufacturing process
and manufacturing infrastructure; regulatory requirements and regulatory
developments; success of Juno's competitors with respect to competing
treatments and technologies; Juno's dependence on third-party
collaborators and other contractors in Juno's research and development
activities, including for the conduct of clinical trials and the
manufacture of Juno's product candidates; Juno's dependence on Celgene
for the development and commercialization outside of North America and
China of Juno’s CD19 product candidates and any other product candidates
for which Celgene exercises an option; Juno’s dependence on JW
Therapeutics (Shanghai) Co., Ltd, over which Juno does not exercise
complete control, for the development and commercialization of product
candidates in China; Juno's ability to obtain, maintain, or protect
intellectual property rights related to its product candidates; amongst
others. For a further description of the risks and uncertainties that
could cause actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to Juno's business
in general, see Juno's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 9, 2016 and Juno’s other
periodic reports filed with the Securities and Exchange Commission.
These forward-looking statements speak only as of the date hereof. Juno
disclaims any obligation to update these forward-looking statements.
Juno Therapeutics, Inc.
Unaudited Consolidated Balance Sheets
(In thousands)
December 31,
2016
2015
ASSETS
Current assets:
Cash, cash equivalents, and short-term marketable securities
$
732,575
$
943,411
Accounts receivable
13,286
315
Prepaid expenses and other current assets
26,471
8,113
Total current assets
772,332
951,839
Property and equipment, net
81,734
42,086
Long-term marketable securities
189,706
272,888
Goodwill
221,306
122,092
Intangible assets
77,986
50,177
Other assets
6,400
6,046
Total assets
$
1,349,464
$
1,445,128
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
41,237
$
37,624
Success payment liabilities
22,786
64,829
Contingent consideration
7,605
1,905
Deferred revenue
43,264
15,370
Total current liabilities
114,892
119,728
Build-to-suit lease obligation, less current portion
—
9,294
Contingent consideration, less current portion
13,291
35,361
Deferred revenue, less current portion
120,054
129,831
Deferred tax liabilities
5,152
8,946
Other long-term liabilities
18,374
435
Stockholders’ equity:
Common stock
11
10
Additional paid-in-capital
1,911,769
1,733,263
Accumulated other comprehensive loss
(2,842
)
(6,083
)
Accumulated deficit
(831,237
)
(585,657
)
Total stockholders’ equity
1,077,701
1,141,533
Total liabilities and stockholders’ equity
$
1,349,464
$
1,445,128
Juno Therapeutics, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended December 31,
Year Ended December 31,
2016
2015
2016
2015
Revenue
$
21,153
$
4,152
$
79,356
$
18,215
Operating expenses:
Research and development
57,398
75,623
264,285
205,160
General and administrative
19,465
15,971
70,675
57,155
Total operating expenses
76,863
91,594
334,960
262,315
Loss from operations
(55,710
)
(87,442
)
(255,604
)
(244,100
)
Other-than-temporary impairment loss
—
—
(5,490
)
—
Interest income, net
1,547
1,021
5,869
1,730
Other income (expenses), net
(141
)
1
(1,012
)
234
Loss before income taxes
(54,304
)
(86,420
)
(256,237
)
(242,136
)
Benefit for income taxes
1,526
1,207
10,657
2,760
Net loss
$
(52,778
)
$
(85,213
)
$
(245,580
)
$
(239,376
)
Net loss per share, basic and diluted
$
(0.51
)
$
(0.89
)
$
(2.42
)
$
(2.72
)
Weighted average common shares outstanding, basic and diluted
103,008
95,374
101,476
88,145
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States (GAAP),
Juno uses certain non-GAAP financial measures to evaluate its business.
Juno’s management believes that these non-GAAP financial measures are
helpful in understanding Juno’s financial performance and potential
future results. These are not meant to be considered in isolation or as
a substitute for comparable GAAP measures and should be read in
conjunction with Juno’s financial statements prepared in accordance with
GAAP. These non-GAAP measures differ from GAAP measures with the same
captions, may be different from non-GAAP financial measures with the
same or similar captions that are used by other companies, and do not
reflect a comprehensive system of accounting. Juno’s management uses
these supplemental non-GAAP financial measures internally to understand,
manage, and evaluate Juno’s business and make operating decisions. In
addition, Juno’s management believes that the presentation of these
non-GAAP financial measures is useful to investors because they enhance
the ability of investors to compare Juno’s results from period to period
and allows for greater transparency with respect to key financial
metrics Juno uses in making operating decisions. Juno endeavors to
compensate for the limitation of the non-GAAP measures presented by also
providing the most directly comparable GAAP measures and descriptions of
the reconciling items and adjustments to derive the non-GAAP measures.
The following is a reconciliation of GAAP to non-GAAP financial measures:
Juno Therapeutics, Inc.
Unaudited Reconciliation of GAAP to Non-GAAP Net Loss
(In thousands, except per share amounts)
Three Months Ended December 31,
Year Ended December 31,
2016
2015
2016
2015
Net loss - GAAP
$
(52,778
)
$
(85,213
)
$
(245,580
)
$
(239,376
)
Adjustments:
Success payment (gain) expense (1)
(11,716
)
34,272
(32,474
)
51,558
Non-cash stock-based compensation expense (2)
589
1,374
3,918
6,208
Change in fair value of contingent consideration (3)
(4,549
)
(1,125
)
(9,724
)
78
Upfront payments related to the acquisition of technology (4)
—
—
15,000
30,810
Net loss - Non-GAAP
$
(68,454
)
$
(50,692
)
$
(268,860
)
$
(150,722
)
Net loss per share - GAAP
$
(0.51
)
$
(0.89
)
$
(2.42
)
$
(2.72
)
Adjustments:
Success payment (gain) expense (1)
(0.11
)
0.36
(0.32
)
0.58
Non-cash stock-based compensation expense (2)
0.01
0.01
0.04
0.07
Change in fair value of contingent consideration (3)
(0.04
)
(0.01
)
(0.10
)
—
Upfront payments related to the acquisition of technology (4)
—
—
0.15
0.35
Net loss per share, basic and diluted - Non-GAAP
$
(0.65
)
$
(0.53
)
$
(2.65
)
$
(1.72
)
Weighted average common shares outstanding, basic and diluted
103,008
95,374
101,476
88,145
Juno Therapeutics, Inc.
Unaudited Reconciliation of GAAP to Non-GAAP Research and
Development Expense
(In thousands)
Three Months Ended December 31,
Year Ended December 31,
2016
2015
2016
2015
Research and development expense - GAAP
$
(57,398
)
$
(75,623
)
$
(264,285
)
$
(205,160
)
Adjustments:
Success payment (gain) expense (1)
(11,716
)
34,272
(32,474
)
51,558
Non-cash stock-based compensation expense (2)
589
1,374
3,918
6,208
Change in fair value of contingent consideration (3)
(4,549
)
(1,125
)
(9,724
)
78
Upfront payments related to the acquisition of technology (4)
—
—
15,000
30,810
Research and development expense - Non-GAAP
$
(73,074
)
$
(41,102
)
$
(287,565
)
$
(116,506
)
(1) The success payment expense (gain) represents the change in the
estimated fair value of the success payment obligations and the
associated elapsed service period. As of December 31, 2016, the
estimated fair values of the success payment liabilities to FHCRC and
MSK on the consolidated balance sheets, after giving effect to the
success payments achieved in December 2015, were approximately $13.3
million and $9.5 million, respectively. In December 2015, success
payments of $75.0 million, less indirect costs of $3.3 million, and
$10.0 million, less indirect costs of $1.0 million, were triggered to
FHCRC and MSK, respectively. Juno elected to make the payments in shares
of its common stock and thereby issued 1,601,085 shares to FHCRC in
December 2015 and 240,381 shares to MSK in March 2016. In April 2016,
Juno repurchased from MSK the 240,381 shares of common stock that had
been issued to MSK. If success payment thresholds are met in the future,
Juno may pay FHCRC and MSK the applicable success payment in cash or
publicly-traded equity at Juno’s election. The success payment
liabilities are subject to re-measurement each reporting period and may
fluctuate from quarter-to-quarter and year-to-year, sometimes
significantly, resulting in either an expense or a gain depending on the
trading price of Juno common stock, estimated term, expected volatility,
risk-free interest rate, estimated number and timing of valuation
measurement dates, and estimated indirect costs that are creditable
against the success payments to FHCRC and MSK.
(2) This relates to a restricted stock grant in 2013 to a former
co-founding director who became a consultant upon his departure from
Juno’s board of directors in 2014. Unlike other outstanding awards to
Juno’s employees, scientific founders, and continuing directors, the
value of this restricted stock award is subject to re-measurement each
reporting period as the award vests and may result in the associated
expense fluctuating from quarter-to-quarter and year-to-year, sometimes
significantly, based on changes in the trading price of Juno common
stock through the end of the vesting period.
(3) This is the change in the estimated fair value of the contingent
consideration liabilities recorded in connection with the Stage and
X-Body acquisitions after giving effect to a contingent consideration
milestone of €6.0 million paid to the former shareholders of Stage in
the fourth quarter of 2016.
(4) The upfront payments related to the acquisition of technology in
2016 include payments made in connection with technology licensing and
the acquisition of RedoxTherapies. The upfront payments related to the
acquisition of technology in 2015 include payments in connection with
the Editas and Fate Therapeutics collaborations.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170301006434/en/
Juno Therapeutics, Inc.Investor Relations:Nicole Keith,
206-566-5521nikki.keith@junotherapeutics.comorMedia:Christopher
Williams, 206-566-5660chris.williams@junotherapeutics.com