January 22, 2018

Celgene Corp Acquires Juno Therapeutics Inc for $9 billion to explore new range of cancer therapies

On Monday, Celgene Corporation (NASDAQ:CELG) has announced that it acquired Juno Therapeutics Inc for $9 billion in cash as it attempts to strengthen its position as a leading player in a new series of cancer therapies. Juno Therapeutics, Inc. (NASDAQ:JUNO) shares surged 27.19% in pre-market activity on Monday.

The offering of $87 a share for the 90 percent of Juno’s shares that Celgene does not own led Juno’s stock to rise by 27 percent to end at $86.31 in pre-market trading. However, the Celgene stock has declined by 1 percent to end at $101.60.

Both of the companies said that the deal, settled on by both boards, is projected to finish in the first quarter of 2018. It contributes Juno’s experimental JCAR017 cure for a type of blood cancer to Celgene’s present lymphoma program. It is the company’s second acquisition so far in 2018 as changes introduced in U.S. taxes regime provided drug makers additional capital to invest on promising assets.

According to analysts, new treatments would benefit Celgene to lower its reliance on Revlimid, its high selling cancer drug that contributes more than 60 percent to its revenue.

Mark Alles , Celgene Chief Executive said in a statement that Juno’s innovative cellular immunotherapy portfolio and research competencies fortify Celgene’s global leadership in hematology and supplements additional drivers for growth after 2020.

Celgene Corporation (NASDAQ:CELG) got settled to purchase privately owned Impact Biomedicines earlier this month, for about $7 billion on grounds of certain milestones.

The Summit, New Jersey based company also has association with Agios Pharmaceuticals Inc and bluebird bio Inc, both of which are in the process of making cancer treatments.

Juno Therapeutics, Inc. (NASDAQ:JUNO) still needs to take an approval for a CAR-T drug unlike its competitors Novartis AG and Kite Pharma, which was purchased by Gilead Sciences Inc in 2017. JCAR017 of Juno is an illustration of chimeric antigen receptor T-cell therapies, named as CAR-T, which joins the body’s own immune cells to identify and attack cancer. The companies said that it is proected to be approved in 2019 and would account for surprising sales of almost $3 billion around the global.

Celgene has paid $93 a Juno share for holding 9.7 percent of the company in 2015. Celgene said that the recent purchase is expected to augment its 2020 target net revenue, however would not affect adjusted earnings estimate of above $13 a share.

Morgan Stanley & Co is the financial adviser for Juno while J.P. Morgan Securities LLC is for Celgene. Skadden, Arps, Slate, Meagher and Flom LLP will be the legal counsel for Juno while Proskauer Rose LLP and Hogan Lovells would be for Celgene.

Juno Therapeutics, Inc. (NASDAQ:JUNO) shares slumped -4.99% to $67.81 on Friday.

Technical Stock Analysis

Current ratio which is the relationship between current assets and current liabilities, indicating the liquidity of a business is calculated as 1.00. Company’s distance from 20 day simple moving average is 37.05% and distance from 50-Day simple moving average is 28.90%.

Stock has got OUTPERFORM rating from 6 of Thomson Reuters analysts, 7 given HOLD rating to the stock and 0 given UNDERPERFORM rating. Analyst’s mean target price for JUNO is $58.79 while analysts mean recommendation is 2.30.

Juno Therapeutics, Inc. (NASDAQ:JUNO) yearly performance is 242.65%. The current share price indicates that stock is -8.80% away from its one year high and is moving 255.49% ahead of its 52-week low.

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