Juno Therapeutics Price Target Cut From $63 To $39 At JPMorgan

Juno Therapeutics Inc JUNO has placed its lead CAR-T [pivotal Phase 2 ROCKET trial evaluating JCAR015 in adult ALL] on clinical hold after 2 patient deaths. JPMorgan’s Cory Kasimov downgraded the rating on the company from Overweight to Neutral, while raising the price target from $63 to $39.

The two deaths last week takes the total patient deaths in ROCKET to three. Management attributed the three deaths to the addition of fludarabine to the JCAR015 preconditioning protocol. Juno Therapeutics pointed out that flu had not been an issue in other trials, and mentioned that the ongoing JCAR014 and JCAR017 trials would continue unchanged.

Near- And Medium-Term Uncertainty

“The company is taking steps to get ROCKET restarted ASAP by going back to pre-conditioning with cyclophosphamide alone. On the one hand, this does appear to be isolated to JCAR015...At the same time it further highlights just how early this technology is in its evolution, and the number of important unanswered Qs that remain,” analyst Cory Kasimov wrote.

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The clinical hold on Juno Therapeutics’ most advanced CAR-T asset was both unforeseen and disappointing, Kasimov mentioned. Now the valuation model reflects a lower probability of success for ALL, at 50 percent.

While expressing optimism regarding the prospects of Juno Therapeutics’ CAR-T platform, the analyst commented that the near and medium term uncertainty created by the recent development suggests “better opportunities elsewhere.”