Why Juno Therapeutics' Stock Tumbled In The Past One Year

Seattle, WA-based Juno Therapeutics, Inc. (NASDAQ:JUNO) remains focused on the development of immuno-oncology treatments. The company is looking to revolutionize cancer treatments by engaging the body’s immune system to treat the disease. Juno is developing cell-based cancer immunotherapies using CAR and high-affinity TCR technologies in order to activate a patient’s own T-cells to recognize and kill cancer cells. However, the stock has significantly underperformed Zacks classified Medical-Biomed/Genetics industry in the past one year. To be precise, the stock lost 45.3% during this period compared with the industry’s decrease of 12.3%.



Let’s delve deeper to understand the reasons for the underperformance.

Leukemia Candidate Discontinued

Last July, Juno suffered a huge setback with the FDA placing a clinical hold on the company’s phase II study (ROCKET) on JCAR015 in adult patients with Relapsed/Refractory (R/R) B-Cell Acute Lymphocytic Leukemia (ALL). The hold was placed after two patients died within a week due to severe neurotoxicity following the addition of fludarabine to the pre-conditioning regimen. Though the hold was lifted a week later and the study was resumed under a revised protocol, the company voluntarily placed the study on hold again in Nov 2016 after two patients suffered from cerebral edema. Finally, this March, Juno announced that it is discontinuing the development of JCAR015 for r/r ALL due to the toxicity witnessed in the ROCKET trial.

Negative Surprises

Juno’ performance has been far from encouraging as the company missed estimates thrice in the trailing four quarters. Overall, Juno has an average negative surprise of 10.19%. In the last reported quarter, the company posted a negative surprise of 4.76%.

In fact, the company’s loss widened on a year-over-year basis in all the quarters of 2016.

Competition

Although Juno is among the major players in the field of T-cell-based immunotherapy, there are several other companies that are looking to develop and bring immunotherapy treatments to market. The CAR space has companies like Novartis (NYSE:NVS) , Kite Pharma, bluebird bio, Intrexon, and Johnson & Johnson (NYSE:JNJ) working on treatments. We note that Juno is well behind Kite Pharma and Novartis in the race to bring a CAR T product to the market.

The company also faces stiff competition in the TCR space from players like Glaxo Pharma (NYSE:GSK) and Kite Pharma.

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