Amid Court Fight and Trial Pauses, Juno Closes First Round at $176M
Supercharged Seattle startup Juno Therapeutics said Thursday it has topped off its first round of venture funding, totaling $176 million in one of the largest cash infusions a private biotech has ever received. It’ll need every penny, and more.
Not only is Juno trying to launch an ambitious set of clinical trials in the burgeoning field of cancer immunotherapy—more than a dozen by the end of 2014, if plans go accordingly—but it is in the thick of a patent fight against two well-heeled opponents. At the heart of the fight are patent rights to key pieces of a particular type of cancer immunotherapy, in which a patient’s T-cells are removed from the body, genetically engineered to become better cancer killers, and then re-infused.
The company announced the extra cash soon after one of its partners, Memorial Sloan Kettering Cancer Center (MSKCC) in New York, restarted several key clinical trials. They were on hold for more than a month because of two patient deaths. “We’re back on track, just as we expected,” said Juno co-founder and director Bob Nelsen, a managing director at Arch Venture Partners.
In an e-mailed statement, a spokeswoman for MSKCC said the trials have resumed with a few changes, including new criteria for allowing people with heart problems to participate.
It’s a reminder that, despite the promise, the approach is still experimental with a long way to go before market approval. Chimeric antigen receptor T-cell technology, or CAR-T, has rapidly become a tantalizing option for treating intractable cancers, thanks to advances in genetic engineering, manufacturing processes, and more. Some of the most advanced programs are at the University of Pennsylvania, MSKCC, and the Fred Hutchinson Cancer Research Center. Novartis now has exclusive license to Penn’s program, and Juno has rights to the MSKCC and Fred Hutch programs (along with work from the Seattle Children’s Research Institute).
Hence the patent fight: Penn and yet another institution, St. Jude Children’s Research Hospital, have been tussling for at least two years over intellectual property in the CAR-T field. When St. Jude’s received a patent in 2013, Juno licensed the technology and promised to help St. Jude fight the legal battle and pay most of the costs. Nelsen says “most” of Juno’s money goes to research but declined to comment on the litigation.
Still, with Novartis pledging its support to Penn, the fight could require deep pockets. Juno certainly has that, thanks to an unusual syndicate of investors. The keystone venture firm is Arch Venture Partners, whose co-founder Nelsen has previous experience with autologous cell therapy. Arch and the State of Alaska, through its oil-revenue fund, supplied the bulk of the first $120 million that Juno announced last December.
Soon thereafter, Bezos Expeditions, the private investment vehicle of Amazon.com founder Jeff Bezos, and Silicon Valley veteran firm Venrock added to the pile.
The cancer startup has also been adding boldface names to its roster, such as new board members Marc Tessier-Lavigne, a former top Genentech scientist and now president of Rockefeller University, and Howard Pien, former CEO of Medarex, whose antibody platform produced Yervoy (ipilumumab), the first “off the shelf” cancer immunotherapy (monoclonal antibodies injected directly, not customized for each patient) to be approved for market.
For the legal fight, Juno has brought on as general counsel Bernard “Barney” Cassidy, a veteran patent litigator who has run the IP efforts at two information technology companies. According to court documents, the two sides—Juno and St. Jude versus Penn and Novartis—continue to maneuver despite a court-ordered settlement hearing in early March.
When Juno launched in December, Nelsen said its Series B could be larger than the Series A. Even with $176 million now in the bank—the round isn’t tranched, Nelsen says—that still holds true. The next step is to find long-term investors who want to “buy and hold for the next five or 10 years,” says Nelsen.
“We’re done with the venture stage,” he says.