Celgene Corporation (CELG) released details that it is aligning with Juno Therapeutics Inc for biotech collaboration. For this, the company will be using nearly a billion dollars and the majority of it will be in respect of buying 9.1 million shares at $93 a share of Juno. The company coughed up double the price of Mondays closing price to acquire the 10% stake with a possible increase of 30% at the end of the decade.
Juno Therapeutics Inc (JUNO) work with CELG and will position the company more efficiently to take on the Swiss pharmaceutical firm, Novartis AG (ADR) (NVS). That is because the Swiss company is also building a similar type of drug that Juno makes currently. The deal is one of the largest in the biotechnology sector. The interest for Juno has moved forward because of the excitement revolving around its treatment for fighting tumors. That involves genetically engineering immune system cells of patients so that they would be able to identify, as well as, attack the tumors.
Though a good number of companies are creating drugs, no drug has been approved for sale by the regulators. Yet, there is a major amount of interest throughout the companies since clinical testing indicated some favorable results of various blood cancers that cheered investors. Celgene’s interest is quite understandable since the company is a leader in treating multiple myeloma cancers.
The agreement empowers CELG and offers them the option to be a partner in the commercialization of JUNO’s medicine for cancer. This apart, the deal covered any cell therapies it creates for autoimmune diseases. The agreement will allow Juno to focus on R&D apart from commercialization in the U.S. As far as the rest of the globe CELG will take up the responsibility of developing, as well as, commercializing the drug For that, a royalty will be paid based on sales.