Juno Therapeutics (NASDAQ:JUNO)

Juno Therapeutics posted positive preliminary results in patients with ibrutinib-refractory Chronic Lymphocytic Leukemia — CLL. These results were presented at a medical conference at the 58th American Society of Hematology. These findings are positive in nature, but problems of toxicity still remain.

While obtaining positive results in Leukemia patients, there were a lot of serious grade 3 to grade 5 serious adverse events. That means when the stock opens on Monday for trading any gains will be capped. In addition, the JUNO stock could possibly trade lower. That is because a lot of toxicity concerns have plagued the CAR-T technology.

After all, another CAR-T program from JUNO has been halted two times. One by the FDA, and the most recent one happened by the company itself. One thing to note is that it is for another drug known as JCAR017. Still, this trial in Leukemia patients receiving JCAR014 saw a lot of safety concerns as well.

JUNO CAR-T Results

The drug used in the trial is known as JCAR014, and is a CAR-T cell therapy drug. The trial in question was treating patients with CLL. The difference is that the trial recruited patients who were refractory to ibrutinib. What this means is that patients first took the drug ibrutinib, which is marketed by Johnson & Johnson before entering the trial.

With patients failing to respond to ibrutinib therapy, they had no other options. Of course, JCAR014 is that alternative option which showed some good response rates in this early stage study. The trial recruited a total of 24 patients in the study that were given JCAR014 therapy.

Out of the 17 evaluable patients, 15 of them or 88% experienced a complete bone marrow response to the treatment. Even better at least 7 of the 14 patients or 50% had no detectable disease whatsoever. These results are highly encouraging. This is especially true considering that patients had undergone fiver other therapies, including ibrutinib, before taking Juno’s drug.

Valuable Collaboration

With the positive results observed in the early stage study, JUNO along with its partner Celgene are taking the next step with respect to the JCAR014 drug. They both are wanting to combine JCAR014 together with ibrutinib. This is being done to see if the therapy of JCAR014 can be enhanced in a combination therapy with ibrutinib.

A phase 1 study of the combination therapies should start in early 2017. The landmark deal between JUNO and Celgene was announced back in June of 2015. At that time Celgene invested $1B in JUNO to develop cancer immunotherapies.

Potential Roadblock

JUNO achieving positive results in the CLL study is highly encouraging, except there is something that can put a stop to the advancement of the drug program. That roadblock is the fact that some patients experienced severe toxicity problems while taking the JCAR014 drug.

This means that the increased toxicity in this trial could translate to the possibility of the FDA placing a clinical hold on this trial as well. In addition, it will be difficult to obtain FDA approval with such adverse events. At least 2 of the 24 patients developed grade 3 to grade 5 cytokine release syndrome.

This is where a type of systemic inflammatory response occurs with respect to T-cells not being activated properly. To make matters worse at least 6 of the 24 patients achieved grade 3 to grade 5 neurotoxicity. Back in July the FDA had placed a clinical hold on a JUNO drug JCAR017 that was treating patients with relapsed or refractory B-cell acute lymphoblastic leukemia.

The trial was placed on hold due to two patient deaths after taking the experimental treatment. The FDA quickly released the hold a few days later which is the good news. The bad news is that JUNO itself had placed a hold in the trial again after patients experienced cerebral edema, and had later died.

This means that the JCAR017 trial has been halted two times already in one year due to severe toxicity concerns. This may spell further trouble for Juno’s other clinical CAR-T therapy programs.

Looking Forward

The JUNO stock should see a lot of trade volume on Monday because of the release of these results. There will be many buyers that will be bullish on the results themselves, however there will be a lot of bears as well. The bear side will argue that despite stellar results there were patients who experienced severe toxicity taking JCAR014. That means that the stock will be hard pressed to post any gains if at all.

As long as the clinical hold issue continues to plague JUNO it will be hard for it trade higher. When the company itself announced its voluntary hold on JCAR017 the stock tanked by 37% in one day. Investors must hope that the CAR-T toxicity doesn’t translate to other trials including the JCAR014 program.

If that were to happen the stock could fall further sending shares of JUNO to new 52-week lows. The stock currently trades at $20.43 per share which is close to its 52-week low of $19.41 per share. A breach of the 52-week low could cause the stock to trade lower, and is something that traders should watch for.

If the voluntary clinical hold is lifted, then there is a possibility the stock could recover over time. It won’t reach its 52-week high of $52.62 per share anytime soon, but pending positive clinical outcomes overtime it may eventually get there. Again, this is only if the company’s CAR-T issues don’t get worse.