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Juno Therapeutics (JUNO) PT Raised to $83 at JPMorgan on Celgene (CELG) Deal

June 30, 2015 9:44 AM EDT
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Price: $86.96 --0%

Rating Summary:
    4 Buy, 12 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 10
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JPMorgan analyst Cory Kasimov reiterated an Overweight rating and boosted his price target on Juno Therapeutics (NASDAQ: JUNO) to $83.00 (from $66.00) following the company's 10-year collaboration with Celgene (NASDAQ: CELG).

"From JUNO’s perspective, this is clearly a big win; the deal provides a huge infusion of cash as well as validation
for the company’s diversified approach within CAR-T, not to mention the overall potential of this nascent field," Kasimov said. "The capital boost plus CELG’s expertise should add to the potential of the JUNO platform and its capabilities relative to other players."

He added, "We expect the deal to close in 3Q, and we have updated our model to reflect 1) the $150M upfront payment, which we amortize over the 10yr collab period, 2) the sale of 9.1M shares at $93, and 3) the increase in costs associated with an assumed acceleration of development. On the latter point, JUNO noted it plans to accelerate all the investments it is making, first and foremost in the people it hires, in addition to moving a bit faster across the pipeline and in manufacturing (in addition to continued BD). Given we see this deal as validating JUNO’s approach and somewhat de-risking to a certain extent, we are also lowering our DCF discount rate to 12% (from 13%). The net effect of these changes is an increase in our target to $83 (still a slight discount to the price being paid by CELG)."

Meanwhile, the firm reiterated a Neutral rating and $126 price target on Celgene. The firm sees this as a high risk/high reward move, but they're not surprised to see the company continue to invest heavily in immuno-oncology.

For an analyst ratings summary and ratings history on Juno Therapeutics click here. For more ratings news on Juno Therapeutics click here.

Shares of Juno Therapeutics closed at $46.30 yesterday.



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