Trucking along with CAR T

SEATTLE—Juno Therapeutics Inc. isn’t fighting summer temperatures so much as matching them, heating up its own efforts with several deals and acquisitions over the past few months as it continues to advance its chimeric antigen receptor (CAR) and T cell receptor (TCR)-based cellular immunotherapies.

The company inked a strategic research collaboration and license agreement with Fate Therapeutics Inc. in early May for the identification and utilization of small molecules to modulate Juno’s genetically engineered T cell product candidates to improve their therapeutic potential for cancer patients. Fate’s platform is capable of programming the biological properties and in-vivo therapeutic potential of hematopoietic cells. The collaboration will run four years, with Fate responsible for screening and identifying small molecules while Juno takes care of developing and commercializing engineered T cell immunotherapies that incorporate Fate’s small-molecule modulators.

Juno will pay Fate $5 million up front and will purchase one million shares of Fate common stock at $8 per share, and will fund all mutual collaboration activities for the four years of the deal. In addition, Fate stands to receive roughly $50 million in target selection fees and clinical, regulatory and commercial milestone payments for each product Juno develops that incorporates modulators identified in this collaboration, as well as sales royalties in the low single-digits. Juno will have an option to extend the exclusive research term for two years through an additional payment and continued funding of collaboration activities.

“A deep understanding of T cell biology is the basis of Juno’s approach to creating best-in-class cellular immunotherapies,” said Juno CEO Hans Bishop. “Partnering with Fate Therapeutics, and accessing its strong science and leading platform for modulating the properties of immunological cells, enables interrogation of new avenues of T cell manipulation and provides an opportunity to enhance the therapeutic profile of our genetically engineered T cell product candidates.”

The CAR T cell technology genetically engineers T cells to recognize and kill cancer cells by inserting a gene for a particular CAR into a T cell, which then enables the T cell to recognize cancer cells by the expression of a certain protein on the cell surface. Once the T cell locks on to the target protein, it initiates a cell-killing response against the cancer cell. Since many of the proteins found on cancer cells don’t appear on the surface of normal, healthy cells, this approach allows for specific targeting while minimizing the risk of off-target damage to healthy cells.

Little more than a week later, Juno announced the acquisition of Stage Cell Therapeutics GmbH. This deal, said Bishop, was driven by Juno’s strategy “to have best-in-class process development and manufacturing capabilities in support of our goal of developing next-generation CAR and TCR products.” Stage’s next-generation cell isolation and expansion technology platforms are based on fully reversible reagents that enable the advanced isolation and expansion of T cells during the manufacturing process.

Juno paid €52.5 million in cash (approximately $59 million) for Stage up front, as well as 486,279 shares of Juno stock to acquire the 95 percent of Stage it didn’t already own. Juno will also make success-based payments of up to €135 million based on the achievement of development and commercialization milestones related to novel reagents (€40 million), advanced automation technology (€65 million) and Stage’s existing clinical pipeline (€30 million).

In another platform-driven acquisition, Juno kicked off June with the acquisition of privately held X-BODY Inc., a biotechnology company that utilizes robust DNA-encoded human naïve libraries to identify functionally active and selective human binding domains and human monoclonal antibodies against targets. The transaction included an initial consideration of approximately $21 million in cash and 439,265 shares of Juno stock, and Juno will also make success-based cash payments to the sellers if certain research, clinical and regulatory milestones are reached for products generated using the X-BODY technology, in addition to certain cash payments following commercialization.

Incorporating X-BODY’s platform into its CAR T creation process will enable Juno to generate new binding domains from fully human naïve single chain variable fragment (scFv)-formatted libraries. These fully human scFv’s could reduce immunogenicity and improve CAR T cell persistence in vivo.

Juno is also exploring its T cell focus from a genome editing perspective, teaming up with Editas Medicine for a trio of research programs that will make use of Editas’ genome-editing technologies, including CRISPR/Cas9, together with Juno’s CAR and TCR technologies. The exclusive collaboration stipulates that Juno will pay Editas $25 million up front, with up to $22 million in research support over the next five years. Editas also stands to receive research, regulatory and commercial sales milestones in excess of $230 million for each program and, should any products result from the alliance, tiered royalties as well.

“We are impressed and inspired by the scope and sophistication of Juno’s scientific vision and the exceptional product development experience of the Juno team,” said Katrine Bosley, Editas’ CEO. “They are intensely focused on advancing T cell-based therapies for cancer patients, and we share their ambition to significantly expand the types of cancers that can be treated with this approach.”

Some of Juno’s fervor might be driven by competitors in the rearview mirror, as Brandon Dempster noted in a Seeking Alpha piece that the company “is facing a time-crunch based on increasing competition from Cellectis, Bellicum and ZIOPHARM, with Cellectis and ZIOPHARM both seeing nice YOY gains.” He added that the acquisition of X-BODY and its technology platform “will definitely help with creating an ideal structure for a marketable CAR-T drug.”

Leerink Partners commented that “Together, we believe these collaborations allow JUNO to remain on the cutting edge of adoptive T cell technology, which will be essential as the field moves to treating solid tumors. With several important updates at ASCO and many additional catalysts over the next 12 months, we continue to see both near- and long-term drivers for the stock.”