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Business

Celgene Bets On Immunotherapy With Big Juno Investment

Biotech: Deal is meant to create cancer immunotherapy powerhouse

by Lisa M. Jarvis
July 2, 2015 | APPEARED IN VOLUME 93, ISSUE 27

Making a bold bet on the long-term importance of cancer immunotherapy, the biotech firm Celgene is paying $1 billion to form a broad partnership with Seattle-based Juno Therapeutics, which reengineers a patient’s own T cells so they can home in on cancer.

ALLIANCES

Celgene is partnering to build an immuno-oncology portfolio.

Juno: $1 billion to develop cellular therapies
Lycera: $83 million to develop RORγ agonists
Sutro Biopharma: $95 million to develop antibody-drug conjugates
Forma Therapeutics: $225 million in broad protein target pact
Bluebird Bio: Broad cellular therapies pact, recently narrowed to focus on B-cell maturation antigen

Under the 10-year pact, Celgene has the option to codevelop any of Juno’s cellular therapies, which include chimeric antigen receptor T cells (CARTs) and T-cell receptors (TCRs). The cost for Celgene to opt in to those therapies goes up as they move through the pipeline; for two Juno programs currently in Phase II, the starting buy-in price is $100 million apiece.

Juno, meanwhile, can opt in to certain Celgene drug candidates directed against T cells. The companies can also work together to assess and acquire other related technologies.

Celgene builds its drug pipeline primarily through creative deal-making. In recent years, it has assembled a network of immuno-oncology partners offering a range of technologies. As the immuno-oncology field matures, Celgene and Juno expect to be able to combine Juno’s cellular therapies with small molecules and proteins being developed at Celgene and its other partners.

“It’s important to remind ourselves that we are really at the beginning of figuring out the opportunity of how to manipulate the immune system,” Celgene’s head of research, Thomas Daniel, said on a call with investors. With the alliance, he noted, neither company will be “trapped by any particular modality.”

Reaction to the news was mixed. Industry watchers were astounded at the price tag: Juno is less than two years old and has no approved drugs. And although the firm’s CARTs have been able to cure some people with blood cancer, the technology also has potentially deadly side effects. Moreover, Juno has yet to prove it can make reengineered T cells work against solid tumors.

But stock analysts note that the payoff of pioneering a promising technology could be huge. “Celgene is prepared to take a risk on big ideas that could turn out to be critical and important pipeline programs over the long run beyond 2020,” RBC Capital Markets analyst Michael Yee said in a note to investors.

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