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Biotech / Medical : Juno Therapeutics Inc. (JUNO)

JUNO 86.96

0.0%

Mar 6 4:00 PM EST

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To: Biotech Jim who wrote (24)	7/2/2015 6:44:12 AM
From: Biotech Jim	Read Replies (1) of 84

Back in the saddle again... Here is a snippet of the Michael Yee RBC report issued on 6/29 for CELG on the JUNO collaboration. A big thanks to DH for the report. "Impact: CELG to pay $150M upfront and purchase $1B of JUNO stock at $93/share (~100% premium to closing price). First impression Bottom line is we like that CELG is making a big commitment to CAR-T as we think this will be an important hematological platform in the future -- but certainly would agree with the likely pending consensus view that the price tag is also big: CELG will be purchasing 9.1M shares of JUNO stock for $1B at $93/share or a near 100% premium to JUNO's closing price around $47/share. So either the deal was competitive (consensus may not agree w/ that...) or CELG really wanted to align and cement itself as the lead development partner side-by-side with Juno. Bulls could say that CELG now gets access to a leading CAR-T platform and a long-term relationship to CART expertise and manufacturing...but the Bears would clearly say why did they have to pay $1B and why pay at such a premium price given these products are still years away from the market and other programs are not in the clinic and will be years from the market and no real clinical data just yet. With this deal, CELG would obtain: 1) option on ROW commercial partnership on CD-19 and CD-22 subject and pay a royalty on those sales (Juno would have US rights), 2) co-promotion options on two programs excluding CD19/22 for a global "profit share" agreement, 3) potential option to opt-in on a 3rd program, 4) nomination of a member to Juno's board, 5) during the 10-year deal, the right to purchase additional equity in Juno during specified windows and a specified premium such that at a maximum - CELG could own up to 30% of JUNO's stock (although there is a standstill and agreed lock-up provision)."

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