Thanks to the $12 billion buyout of its rival, Kite Pharma (NASDAQ:$KITE) by Gilead Sciences (NASDAQ:$GILD) yesterday, Juno Therapeutics (NASDAQ:$JUNO) is having a solid day. Its shares have reached double digits for a second day in a row.
The Current Situation
As of 1:36 p.m. EDT, Juno’s shares have increased by another 18%, as bidded on by investors. If things continue going this northward for Juno — and all the signs point to that happening — its shares will gain 40% in the first two trading sessions of this week.
Perhaps another factor in the healthy surge of Juno’s stock is a widely speculated buyout from Celgene Corp. (NASDAQ:$CELG), which owns 10% of Juno’s outstanding shares as a $1 billion 2015 CAR-T and TCR development deal.
Speculations are circulating that Celgene is looking to buy the rest of Juno in order to impede Gilead from gaining momentum in the high-prized CAR-T sector. Gilead is an aggressive opponent with a history of building up drug franchises that take up a disproportionate amount of the market. It doesn’t hurt that they also have $24 billion in cash remaining to pursue CAR-T deals.
The Future Situation
The future of a possible contract between Celgene and Juno is speculation at best. While Juno reflects current promising shares, there are other competitors within the industry that provide more potent and safe adoptive cell therapy platforms, in addition to cheaper valuations. In other words, Juno’s sudden surge in shares is purely based on speculation as a result of Gilead’s buyout of Kite. Once the excitement wears off, it will become apparent whether Juno is capable of trumping Kite’s Axi-Cel product with its JCAR017. Further, Celgene already holds current adoptive cell therapy licensing deals that may undermine its interest in a buyout of Juno.
Keep in mind, even if Juno were to sell, a significant discount will likely be applied due to its lack of a regulatory product. So, for those looking to invest in Juno today, it may be beneficial to reconsider turning a quick profit on a buyout offer.
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