Celgene in discussions to buy Juno Therapeutics

Celgene, the acquisitive drugmaker, is in talks with Juno Therapeutics about buying the developer of cutting-edge cancer treatments in what would be its second big deal of 2018. With the acquisition of Juno, Celgene would enter the pioneering field of chimeric antigen receptor therapy (Car-T), which involves re-engineering a patient’s white blood cells so they can identify and attack cancer.

The deal talks come as pharmaceutical companies race to develop or acquire revolutionary cell and gene therapies that try to hack the body’s own biology so it is better able to fight disease. It is not clear how much Celgene would pay for Juno, which had a market capitalisation of $5.2bn when markets closed on Tuesday.

Shares in the group jumped 42.9 per cent in after-hours trading when news of the talks was first reported by the Wall Street Journal. The talks also come days after Celgene announced it would pay $1.1bn upfront for Impact Biomedicines, another cancer company, in a transaction that could be worth up to $7bn if the group’s medicine is successful. Last year, Gilead, a large biotech group, spent $11.9bn to acquire Kite Pharma, a rival developer of Car-Ts, while other large drugmakers have signed lucrative partnership deals worth billions of dollars to gain access to such treatments.

Celgene has had a partnership with Juno since 2015, when it invested $1bn in the company to gain the rights to revenues from some of its medicines. Juno had been in the lead to bring a Car-T to market but fell back following a spate of deaths during clinical trials in 2016 that forced the Seattle-based company to abandon work on its most advanced product.

Since then, two competitors, Novartis and Gilead, have launched their Car-T products after winning the first regulatory approvals from the US Food and Drug Administration. Some investors thought Juno, a potential third entrant in what is still a small market, would struggle to mount an effective challenge to Novartis and Gilead. But in November, Juno published data from a small trial suggesting one of its less-advanced products might be more effective at treating an aggressive type of lymphoma than existing Car-Ts.

Juno is also developing a Car-T targeting multiple myeloma, a bone marrow cancer that doctors often treat with medicines made by Celgene.

One such drug, Revlimid, has been a big earner for Celgene — which has been criticised for regularly increasing the price of the medicine — but it is set to face competition from generic rivals from 2022.

Celgene has become one of the most acquisitive drugmakers as it seeks to wean itself off Revlimid, although some investors believe its haste to find fresh products has resulted in the company overpaying for assets.

Revlimid generated $6bn of sales in the first nine months of last year, accounting for almost two-thirds of Celgene’s revenues, and some investors fear the company will struggle to cope once it loses share to generic competitors.

Jan, 17 2018

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