Excitement over a
promise of a new type of cancer treatment ignited a frenzy on Wall
Street Friday as a little-known year-old company pulled off one of the
largest initial public stock offerings in the biotechnology sector.
The company, Juno
Therapeutics, sold 11 million shares at $24 each on Thursday in its
initial public offering. The company increased its price and the number
of shares offered earlier that day after a surge in demand.
When trading started
on Friday, the stock soared, closing at $35 a share, up 46 percent, and
giving Juno a market valuation of about $2.7 billion.
Juno, based in
Seattle, is working on sophisticated treatments that genetically
engineer the body’s immune cells so they can better recognize and kill
cancer cells. Its approach has been tried so far on a relatively small
number of patients, but the results have been extraordinary. Some people
with leukemia have been rescued
from near-certain death. A study of one of Juno’s drugs found an 89
percent remission rate among 27 adults with acute lymphoblastic leukemia
no longer responding to other treatments.
Juno has
collaborations with the Fred Hutchinson Cancer Research Center in
Seattle, Seattle Children’s Research Institute and the Memorial Sloan
Kettering Cancer Center in New York, and they could be in for a windfall
if the company succeeds.
In addition to the
usual royalties and milestone payments that companies pay to suppliers
of technology, Juno will make “success payments” to the Hutchinson
center and Sloan Kettering if the company’s stock is above certain
prices at certain points in time. The total payments could be as much as
$375 million in cash and stock for the Hutchinson center and $150
million for Sloan Kettering.
Even before raising
$264 million its public offering, Juno had raised more than $300 million
privately, a large amount for such a young firm. One early investor was
Jeff Bezos, head of Seattle-based Amazon. Juno’s largest shareholder,
with about a 30 percent stake, is a fund that invests the State of
Alaska’s oil revenue
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