I wish JUNO has been out of woods now

Over a year ago, I started to talk about Juno, a clinical stage biotech company specialized in one of the most exciting new immunotherapies for cancer, the CAR-T therapy. I’m a big fan of this new technology and has no doubt whatsoever that it will work and also being commercialized successfully. Here is what I said then: If I can further make a bold prediction, I think the FDA will work with the companies for CAR-T therapies to make the development and submission/approval process as smooth as possible, since they want to see it commercialized as early as possible for the patients' benefit. I liked Juno at that time as it used to be the leading company in CAR-T development and I bet on it when it first ran into some crisis. Unfortunately the path for Juno is nothing less than dramatic or even tragic to some extent. A few patients died and its leading project has finally been tossed out. Juno, once the front runner, is now far behind its competitors like Kite.

 

While Juno seems to be left dead for almost a year, all the sudden it has jumped 40% higher in the past few days. Has Juno revived and come out of the woods by now? Maybe not yet! As I said, CAT-T will soon be available commercially as a maturing new therapy, first by Novartis and then by Kite in the next few months. Due to its bright prospects, the biotech giant, Gilead, has decided to acquire Kite with a whopping $11.9 Billion price tag, a huge confident vote for CAR-T! The success of Kite makes many investors believe that Juno could be the next target for M&A and hence a panic buying to push it up nearly doubling. But I think this is nothing more than a speculation, even though I really wish Juno will soon be acquired as its investor! For sure I’m still holding the faith for Juno and I certainly believe it will revive to bring its CAR-T product to patients. But we are talking about at least a year later before Juno can release any clinically meaningful data from its ongoing trials. Before that, there is still too much uncertainty involved, especially with what Juno has experienced so far with fatality. I’m not sure any company would pay big money to buy Juno at this stage before they know for sure it has something ready for marketing. I think the hype for Juno now will fade soon after people cool down. For my money in Juno? I’m still holding my 2018 options. As I explained with some details, I’m currently holding it for free and I’m using this opportunity to try to extract more money from this euphoric move. You see, investing is art, not science. Even though I’m betting for an uptrend for long term, nothing can stop me from doing some short-term trading that may be even shorting it from time to time. I have already done so several times for my Juno calls and my short-term income has already been way more than what I paid for the long calls (more than double). I have luckily managed to do so during the time while Juno has been doing nothing but down most of the past year. One thing I’m always interested to do is to short something when it is apparently in a euphoric state. Since I’m holding the Juno calls for free, which are just breaking even at the moment due to its 40% move last week, I added a short arm now to create a bearish call spread, expecting that Juno may soon come down. If so, I will again gain nicely from the short arm while I can continue to hold my long calls till its maturity in Jan 2018. Between now and next Jan, Juno is likely just a dead cat that may bounce from time to time. I’m trying to turn the dead cat into an ATM as much as possible :)