– Strong cash position of $1.04 billion
–
– JCAR015 Phase II ROCKET trial continues
enrollment –
– JCAR015 U.S. approval projected as early
as the first half of 2018 –
– Data to be presented at ASH, including
Phase I JCAR017 NHL data –
– Eight product candidates in clinical
trials against six different targets –
– Juno reaffirms cash burn guidance
–
– Conference call today at 5:00p.m. Eastern
Time –
Juno Therapeutics, Inc. (NASDAQ: JUNO), a biopharmaceutical
company focused on re-engaging the body’s immune system to
revolutionize the treatment of cancer, today reported financial
results and business highlights for the third quarter 2016.
“JCAR017, a key product candidate of our CD19 platform, has
shown encouraging preliminary efficacy and safety results in NHL
and pediatric ALL. At the upcoming American Society of Hematology
meeting, additional data from our Phase I trial for JCAR017 in NHL
patients will be presented,” said Hans Bishop, Juno’s President and
Chief Executive Officer. “Progress with CAR T therapy continues as
we strive to bring these innovative product candidates to patients
battling cancer. We look forward to the upcoming presentations at
ASH, including 11 total presentations from a number of ongoing and
completed studies.”
Third Quarter 2016 and Recent Corporate Highlights
Clinical Update:
- CD19 Portfolio:
- Announced seven oral and four poster
presentations at the 58th American Society of Hematology (ASH)
Annual Meeting, detailing updated clinical and preclinical results
generated in partnership with its collaborators. New data with
JCAR017 in adult patients with relapsed/refractory (r/r) diffuse
large B-cell lymphoma (DLBCL), which is a subtype of non-Hodgkin
lymphoma (NHL), data from the PLAT-02 trial for pediatric patients
with r/r acute lymphoblastic leukemia (ALL), and data from a Phase
I trial with JCAR014 in high-risk, ibrutinib-refractory patients
with chronic lymphocytic leukemia (CLL) will be presented.
- JCAR015
- Announced the removal on July 12, 2016
by the U.S. FDA of a clinical hold that the agency had placed on
the Phase II ROCKET trial on July 6, 2016. The ROCKET trial has
reopened for enrollment using JCAR015 with cyclophosphamide (cy)
preconditioning alone, and all sites are currently treating
patients. Juno’s trials and plans for its other CD19-directed CAR T
cell product candidates, including JCAR017, were not affected.
- JCAR017
- Announced Phase I NHL preliminary
efficacy and safety data for the ongoing trial. Juno will update
results with more patients and durability data at the ASH Annual
Meeting.
- JCAR014
- Researchers at the Fred Hutchinson
Cancer Research Center (FHCRC) published clinical data in Science
Translational Medicine demonstrating that patients who received a
dose of CD19-targeted defined composition engineered T cells after
chemotherapy went into complete remission. By controlling the
mixture of T cells that patients receive, the researchers can see
relationships between cell doses and patient outcomes that were
previously elusive. The data also suggest that with a defined
one-to-one composition of cells, efficacy of treatment is
increased, while toxic side effects are decreased. Like JCAR014,
JCAR017 uses a one-to-one ratio of helper and killer CAR T cells,
and Juno believes it has the potential to be a “best-in-class”
treatment for r/r NHL, r/r CLL, and adult and pediatric r/r
ALL.
Corporate Development News:
- Juno entered into an exclusive license
agreement with Memorial Sloan Kettering Cancer Center (MSK) and
Eureka Therapeutics, Inc. for a novel, fully-human binding domain
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
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. The parties expect the BCMA CAR to enter
human testing as early as the first half of 2017.
- Juno acquired RedoxTherapies, a
privately-held company. The acquisition provides Juno 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.
Third Quarter 2016 Financial Results
- Cash Position: Cash, cash
equivalents, and marketable securities as of September 30, 2016
were $1.04 billion compared to $1.11 billion as of June 30, 2016
and $1.22 billion as of December 31, 2015.
- Cash Burn: Excluding cash
inflows and outflows from upfront payments related to business
development, cash burn in the third quarter of 2016 was $59.5
million including $6.4 million for the purchase of property and
equipment, compared to $45.7 million in the third quarter of 2015
including $14.2 million for the purchase of property and equipment.
The cash burn increase of $13.8 million was primarily driven by
cash outflows in connection with the overall growth of the
business, offset by $9.2 million received from Celgene in the third
quarter of 2016 for reimbursement of costs incurred by Juno in
connection with the CD19 program and by lower spend for property
and equipment.
- Revenue: Revenue for the three
and nine months ended September 30, 2016 was $20.8 million and
$58.2 million, respectively, compared to $1.6 million and $14.1
million for the three and nine months ended September 30, 2015,
respectively. The increase of $19.2 million and $44.1 million in
the three and nine months ended September 30, 2016, respectively,
was due primarily to revenue recognized in connection with the
Celgene collaboration and CD19 opt-in. Included in revenue for the
nine months ended September 30, 2016 and 2015 was $14.3 million and
$12.3 million received in connection with the Novartis sublicense
agreement, respectively.
- R&D Expenses: Research and
development expenses for the three and nine months ended September
30, 2016, inclusive of non-cash expenses and computed in accordance
with GAAP, were $60.9 million and $206.9 million, respectively,
compared to $11.5 million and $129.5 million for the same periods
in 2015. The increases in 2016 were primarily due to increased
costs incurred to execute Juno’s clinical development strategy,
manufacture its product candidates, and expand its overall research
and development capabilities, milestones achieved in 2016, an
increase in stock-based compensation expense, and the difference
between the three months ended September 30, 2016 and 2015 in the
gain related to Juno’s estimated success payment liability. These
increases were offset by lower upfront payments for technology
acquisition in 2016 compared with 2015, a gain recognized during
the nine months ended September 30, 2016 related to the change in
the estimated value of Juno’s contingent consideration liabilities,
and the difference between the nine months ended September 30, 2016
and 2015 in the gain or expense related to Juno’s estimated success
payment liability. For the three months ended September 30, 2016
and 2015, Juno recorded a gain of $17.7 million and $25.6 million,
respectively, related to Juno’s success payment liability,
resulting in an increase in research and development expense of
$7.9 million. For the nine months ended September 30, 2016, Juno
recorded a gain of $20.8 million related to Juno’s success payment
liability, compared to an expense of $17.3 million for the same
period in 2015, resulting in a decrease of $38.1 million in
research and development expense.
- Non-GAAP R&D Expenses:
Non-GAAP research and development expenses for the three and nine
months ended September 30, 2016 were $62.2 million and $214.5
million, respectively, compared to $34.5 million and $75.4 million
for the same periods in 2015. Non-GAAP research and development
expenses for the three and nine months ended September 30, 2016
include $7.9 million and $25.8 million of stock-based compensation
expense, respectively, compared to $3.1 million and $7.3 million
for the same periods in 2015. Non-GAAP research and development
expenses in 2016 exclude the following:
- A gain of $17.7 million and $20.8
million for the three and nine months ended September 30, 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 $0.9 million and $3.3 million for the three and nine
months ended September 30, 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.
- An expense of $0.3 million for the
three months ended September 30, 2016 and a gain of $5.2 million
for the nine months ended September 30, 2016 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 three and nine months ended September 30, 2016.
- Non-GAAP research and development
expenses in 2015 exclude the following:
- A gain of $25.6 million for the three
months ended September 30, 2015 and expense of $17.3 million for
the nine months ended September 30, 2015 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 $1.3 million and $4.8 million for the three and nine
months ended September 30, 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.
- An expense of $1.3 million and $1.2
million for the three and nine months ended September 30, 2015,
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 license
agreements of $30.8 million for the nine months ended September 30,
2015 associated with the Editas and Fate Therapeutics
collaborations.
- G&A Expenses: General and
administrative expenses on a GAAP basis for the three and nine
months ended September 30, 2016 were $18.4 million and $51.2
million, respectively, compared to $13.6 million and $41.2 million
for the same periods in 2015. The increase in the third quarter of
2016 compared to the same period in 2015 was primarily due to an
increase in litigation and patent legal costs, consulting costs
related to commercial readiness, and personnel costs, including
non-cash stock-based compensation expense. These were offset by a
decrease in costs supporting business development activities. The
increase in the nine months ended September 30, 2016 compared to
the same period in 2015 was primarily due to increased personnel
costs, including non-cash stock-based compensation expense and
consulting costs related to commercial readiness, offset by lower
costs supporting business development activities and lower
litigation costs. General and administrative expenses include $5.4
million and $15.9 million of non-cash stock-based compensation
expense for the three and nine months ended September 30, 2016,
respectively, compared to $4.7 million and $9.4 million for the
same periods in 2015.
- GAAP Net Loss: Net loss for the
three and nine months ended September 30, 2016 was $56.9 million,
or $0.56 per share, and $192.8 million, or $1.91 per share,
respectively, compared to $23.2 million, or $0.26 per share and
$154.2 million, or $1.80 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 nine months ended September 30, 2016 was $58.3 million,
or $0.57 per share, and $200.4 million, or $1.99 per share,
respectively, compared to $46.3 million, or $0.52 per share, and
$100.0 million, or $1.17 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.”
2016 Financial Guidance Reaffirmed
Juno reaffirms 2016 cash burn guidance, excluding cash inflows
or outflows from upfront payments related to business development
activities, of between $220 million and $250 million.
- Operating burn estimated to be between
$170 million and $195 million.
- Capital expenditures estimated to be
between $40 million and $55 million, the vast 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 third quarter 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# 7555725.
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 re-engaging the body’s immune
system to revolutionize 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.
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; planned data presentations
at the ASH Annual Meeting; the potential of acquired or licensed
technology and capabilities; and 2016 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
August 5, 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. Condensed Consolidated
Balance Sheets (Unaudited) (In thousands)
September 30, 2016 December 31, 2015
ASSETS Current assets: Cash, cash equivalents, and short-term
marketable securities $ 820,656 $ 943,411 Accounts receivable
10,603 315 Prepaid expenses and other current assets 13,514
8,113 Total current assets 844,773 951,839
Property and equipment, net 57,708 42,086 Long-term marketable
securities 214,880 272,888 Goodwill 221,306 122,092 Intangible
assets 80,135 50,177 Other assets 7,495 6,046
Total assets $ 1,426,297 $ 1,445,128
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable and accrued liabilities $ 47,855 $ 37,624 Success payment
liabilities 34,502 64,829 Contingent consideration 9,271 1,905
Deferred revenue 41,403 15,370 Total
current liabilities 133,031 119,728 Build-to-suit lease obligation,
less current portion 8,758 9,294 Contingent consideration, less
current portion 22,820 35,361 Deferred revenue, less current
portion 129,969 129,831 Deferred tax liabilities 7,351 8,946 Other
long-term liabilities 7,431 435 Stockholders' equity: Common stock
10 10 Additional paid-in capital 1,895,825 1,733,263 Accumulated
other comprehensive loss (439 ) (6,083 ) Accumulated deficit
(778,459 ) (585,657 ) Total stockholders' equity
1,116,937 1,141,533 Total liabilities and
stockholders' equity $ 1,426,297 $ 1,445,128
Juno Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (In thousands, except share and per share
data) Three Months Ended September 30,
Nine Months Ended September 30, 2016
2015 2016
2015 Revenue $ 20,826 $ 1,602 $ 58,203 $
14,063 Operating expenses: Research and development 60,854 11,503
206,887 129,537 General and administrative 18,441
13,632 51,210 41,184
Total operating expenses 79,295 25,135
258,097 170,721 Loss from operations
(58,469 ) (23,533 ) (199,894 ) (156,658 ) Other-than-temporary
impairment loss - - (5,490 ) - Interest income, net 1,485 356 4,322
709 Other income (expenses), net (507 ) -
(871 ) 233 Loss before income taxes (57,491 )
(23,177 ) (201,933 ) (155,716 ) Benefit from (provision for) income
taxes 594 (63 ) 9,131
1,553 Net loss $ (56,897 ) $ (23,240 ) $ (192,802 ) $
(154,163 ) Net loss per share, basic and diluted $ (0.56 ) $
(0.26 ) $ (1.91 ) $ (1.80 ) Weighted average common shares
outstanding, basic and diluted 102,177,808
90,827,026 100,961,382 85,702,518
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.
Reconciliation of GAAP to Non-GAAP Net Loss
(Unaudited) (In thousands, except share and per share
data) Three Months Ended September 30,
Nine Months Ended September 30, 2016
2015 2016
2015 Net loss - GAAP $ (56,897 ) $ (23,240 ) $
(192,802 ) $ (154,163 ) Adjustments: Success payment (gain) expense
(1) (17,650 ) (25,586 ) (20,758 ) 17,285 Non-cash stock-based
compensation expense (2) 938 1,271 3,329 4,834 Change in fair value
of contingent consideration (3) 336 1,283 (5,175 ) 1,203 Upfront
payments related to the acquisition of technology (4) 15,000
- 15,000 30,810
Net loss - Non-GAAP $ (58,273 ) $ (46,272 ) $ (200,406 ) $ (100,031
) Net loss per share - GAAP $ (0.56 ) $ (0.26 ) $ (1.91 ) $
(1.80 ) Adjustments: Success payment (gain) expense (1) (0.17 )
(0.28 ) (0.21 ) 0.20 Non-cash stock-based compensation expense (2)
0.01 0.01 0.03 0.06 Change in fair value of contingent
consideration (3) - 0.01 (0.05 ) 0.01 Upfront payments related to
the acquisition of technology (4) 0.15 -
0.15 0.36 Net loss per share,
basic and diluted - Non-GAAP $ (0.57 ) $ (0.52 ) $ (1.99 ) $ (1.17
) Weighted average common shares outstanding, basic and
diluted 102,177,808 90,827,026
100,961,382 85,702,518
Juno Therapeutics, Inc.
Reconciliation of GAAP to Non-GAAP Research and Development
Expenses (Unaudited) (In thousands)
Three Months Ended September 30, Nine Months Ended
September 30, 2016 2015
2016 2015
Research and development expense - GAAP $ (60,854 ) $ (11,503 ) $
(206,887 ) $ (129,537 ) Adjustments: Success payment (gain) expense
(1) (17,650 ) (25,586 ) (20,758 ) 17,285 Non-cash stock-based
compensation expense (2) 938 1,271 3,329 4,834 Change in fair value
of contingent consideration (3) 336 1,283 (5,175 ) 1,203 Upfront
payments related to the acquisition of technology (4) 15,000
- 15,000 30,810
Research and development expense - Non-GAAP $ (62,230 ) $ (34,535 )
$ (214,491 ) $ (75,405 )
(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 September 30, 2016, the
estimated fair values of the success payment liabilities to FHCRC
and MSK on the condensed consolidated balance sheets, after giving
effect to the success payments achieved in December 2015, were
approximately $20.5 million and $14.0 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.
(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/20161109006265/en/
Juno TherapeuticsInvestor Relations:Nicole Keith,
206-566-5521nikki.keith@junotherapeutics.comorMedia:Christopher
Williams, 206-566-5660chris.williams@junotherapeutics.com
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