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Juno Therapeutics (JUNO) Q3 Loss Narrower than Expected

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Juno Therapeutics Inc. (JUNO - Free Report) reported a loss of 58 cents per share (including stock-based compensation expense) in the third quarter of 2016, narrower than the Zacks Consensus Estimate loss of 64 cents. However, quarterly loss widened from the year-ago figure of 53 cents.

The company reported total revenue of $20.8 million in the quarter, compared to $1.6 million in the year-ago period. The top line includes revenues recognized under Juno’s collaboration agreement with Celgene Corporation (CELG - Free Report) and CD19 opt-in as well as milestone revenues from Novartis AG (NVS - Free Report) in connection with a sublicense agreement. Revenues were also significantly above the Zacks Consensus Estimate of $12 million.

The company’s adjusted research and development expenses in the reported quarter shot up 80.3% from the year-ago period to $62.2 million (including stock-based compensation expense) primarily due to higher clinical development costs. Meanwhile, general and administrative expenses amounted to $18.4 million (including stock-based compensation expense), up 35.3% due to an increase in litigation and patent legal costs, consulting costs related to commercial readiness and personnel costs.

Pipeline Update

Juno is looking to revolutionize cancer treatment by introducing immunotherapies. The company’s pipeline candidates include JCAR015, JCAR017 and JCAR014.

However, Juno faced a major setback related to the development of its lead pipeline candidate, JCAR015. In Jul 2016, the FDA placed a clinical hold on the company’s phase II study (ROCKET) on JCAR015 in adult patients with relapsed or refractory B cell acute lymphoblastic leukemia (r/r ALL) after two patients died within a week due to severe neurotoxicity following the recent addition of fludarabine to the pre-conditioning regimen.

However, the clinical hold was lifted a week later and the study has resumed under a revised protocol. Juno now expects a FDA approval of JCAR015 in the first half of 2018.

Meanwhile, JCAR017 is in a phase I study for non-Hodgkin lymphoma (NHL) and in a phase I/II study in pediatric and young adults with r/r ALL. The company continues to work on developing the other candidates on its pipeline as well.

Guidance

Juno continues to expect cash burn of $220–$250 million in 2016, excluding the impact of business development activities.

JUNO THERAPEUTC Price, Consensus and EPS Surprise

 

JUNO THERAPEUTC Price, Consensus and EPS Surprise | JUNO THERAPEUTC Quote

Zacks Rank & Key Picks

Juno currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Cambrex Corporation (CBM - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cambrex’s earnings estimates have increased from $2.46 to $2.60 for 2016 but remained unchanged for 2017 over the last 60 days. The company has posted a positive earnings surprise in three of the trailing four quarters with an average beat of 19.78%. Its share price has increased 9% year to date.

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