The Only Bullish Scenario For Juno Therapeutics: Its CEO May Get Fired

As Juno Therapeutics Inc JUNO continues to trail its peers, BTIG analyst Dane Leone sees the stock falling nearly 50 percent as he downgrades his rating to Sell and set a price target of $12 (see Dane Leone's track record).

“The company is trailing peers KITE and Novartis AG (ADR) NVS] to market, and we still do not have demonstrative proof that JUNO products will be differentiated on efficacy or toxicity. Overall, our market model for JCAR017 is ~$1bn below consensus sales expectations out to 2026E as we are not sure that the company will be competitive in DLBCL,” Leone said.

3 Key Takeaways

1. The data for Transcend does not support outpatient use, and Leone pointed out that with its high toxicity, it does seem like Juno has a “decentralized delivery model.” Overall, there is a lot of uncertainty around the Juno Therapeutics dataset.
2. Juno is already entering a very competitive field with its early-stage clinical pipeline additions including an anti-BCMA CAR T. Some of the players in this industry include Kite Pharma and bluebird bio Inc BLUE.
3. Due to Juno’s strategic errors, Leone highlighted the possibility that CEO Hans Bishop is removed this year. Leone actually believes this could be a positive for Juno as the company has potential if managed correctly.

Leone concluded by saying: “Overall the ‘defined cell population strategy’ is a complete show-me story, as data to date has not been convincing, and we think the retrenched strategy post the ROCKET failure has pushed the competitive timelines so far behind peers within the CD19+ race that the company will ultimately be reliant on earlier stage products – for which we have very little data.”

Juno Therapeutics was trading down over 5 percent during Thursday’s pre-market trading session, but quickly lost those gains following the opening bell. At last check, shares of Juno were down 4.34 percent at $22.70.

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