Last week’s initial public offering for biotech company Juno Therapeutics could pay dividends for several Seattle-based healthcare providers as the company brings its cancer treatments to market.
The Fred Hutchinson Cancer Research Center, Seattle Children’s Research Institute and Memorial Sloan Kettering Cancer Center could end up with significance returns and dividends from Juno Therapeutics, a newly public company trying to translate their research into breakthrough immune system-based oncology treatments.
Next year, Juno plans to start a phase 2 trial seeking accelerated approval for relapsed/refractory B cell acute lymphoblastic leukemia, a phase 1 trial in relapsed/refractory B cell non-Hodgkin’s lymphoma, and phase 1 trials for at least four hematological and solid organ cancers, such as breast, lung and pancreatic cancer.
If Juno can commercialize these treatments, the hospitals stand to earn millions in returns, cash they can use to shore up their finances and reinvest in research and treatment. Juno is also paying St. Jude’s Childrens Hospital in Memphis for use of a patent that had been filed on CAR-T therapy, with an initial sum of $25 million, plus a $500,000 minimum royalty for the life of the patent.
[See also: Bundled payment for cancer shows promise.]
Fred Hutchinson and MSK may end up as the largest financial benefactors from success payments in cash and stock, with Fred Hutchinson, the third largest pre-IPO shareholder, eligible for more than $300 million in total returns.
In one of the largest biotechnology initial public offerings in history, Seattle-based Juno opened for trading on the Nasdaq stock exchange Dec. 19 with 11 million shares priced at $24 each. The company’s stock price hit $35 by the end of that Friday, raising $264.5 million and earning a valuation of almost $3 billion.
While other companies and academic medical centers are pursuing cancer immunotherapies, Juno Therapeutics lays claim to the intellectual property for two platforms used to genetically engineer a patient's immune system to activate cancer-killing T cells.
So far used primarily for patients with blood cancers, the company's therapies have produced solid results — for instance, 24 out of 27 acute lymphoblastic leukemia patients entered remission, after previous treatments failed.
Juno Therapeutics has six scientific founders spanning Fred Hutchinson, MSK and other institutions. Renier Brentjens, MD, is credited with starting the first preclinical studies as an MSK fellow demonstrating the potential clinical applications of harnessing the immune system to keep cancer at bay with T-cells using chimeric antigen receptors.
Several other biotech ventures target immuno-oncology, from treatments involving programmed cell death to genetically engineered T-cells. Merck, Bristol-Meyers Squibb and AstraZeneca are working on programmed cell death treatments, while Kite Pharma, which went public in June and now has a market capitalization of around $2.2 billion, and a larger institutional partnership between Novartis and the University of Pennsylvania Health System, target T-cell immunotherapy.
Immunotherapies can also lead to dead ends. Juno Therapeutics CEO Hans Bishop was previously the COO of Dendreon, winning the first FDA approval for a cell-based cancer immunotherapy in 2010. However, Provenge saw mixed clinical success and sales far below hyped forecasts.
Juno Therapeutics, though, has high expectations, in part because of its backers. In two investments early this year, Amazon CEO Jeff Bezos gave Juno $300 million from his personal venture capital fund, joining ARCH Venture Partners, Venrock Capital and the Alaska Permanent Fund, the state’s oil revenue investment fund. Among Juno’s board members are Hal Barron, MD, a former executive at Genentech and Roche who’s now R&D president at the Google-backed longevity company Calico, and Richard Klausner, MD, a former director of the National Cancer Institute and current chief medical officer at genomics sequencing firm Illumina.