Juno executives investigated over trial deaths disclosure by law firm

The law firm is looking into what Juno knew about the trial deaths.

Last year, Juno was hit by a string of deaths in a test for its experimental CAR-T med; now its top-level executives are being investigated about whether they failed shareholders by not telling them more about the fatalities.

The investigation is being by carried out by shareholder and consumer rights law firm Schubert Jonckheer & Kolbe, which said in a brief statement that it is looking into whether the biotech “breached their fiduciary duties to Juno and its shareholders by exposing Juno to civil liability for failing to disclose patient deaths in the Phase 2/Rocket trial of its leading product candidate, JCAR015, during the period June 24, 2016 to November 22, 2016.”

The so-called Rocket trial, studying the Juno CAR-T med in relapsed or refractory B cell acute lymphoblastic leukemia in adults, was hit with a clinical hold last year.

In turned out that three young adult patients died, and all of the deaths were attributed to cerebral edema. Juno was at the time quick to announce that its drug candidate did not cause the deaths, blaming instead a preconditioning regimen it (and other companies) use before administering experimental CAR-T treatment.

Juno said it would remove the perceived culprit, fludarabine, from the trial and move on. The FDA promptly agreed, allowing the biotech to restart its test under the new study protocol just a few days later.

After the first trial deaths and halt, legal firm Block & Leviton sued Juno and its CEO Hans Bishop for alleged securities fraud, saying that Juno “made misleading omissions regarding a patient death in the Phase 2 Rocket trial of its lead product candidate, JCAR015 … Juno knew the patient death was important and consulted with the FDA about an appropriate response. Yet it failed to tell investors."

It said that instead, in early June, Juno issued “a glowing press release that boasted of “[l]ower side effects” and made partial, misleading disclosures—revealing that “Grade 3 or higher neurotoxicity was observed in 15/51 (29%) patients” in a phase 1 trial but failing to disclose the patient death in May.”

It also alleged that Bishop and other Juno insiders “sold heavily in the weeks prior to these revelations.” A Juno spokesman said those sales were prescheduled “well before the events of the Rocket trial,” under SEC rules designed to allow insiders to sell their shares without worrying about running afoul of insider trading rules.

Then, in November last year, the decision to carry on proved fatal: Two more deaths were reported from the modified Rocket trial, again from cerebral edema. Juno put a hold on its own study toward the end of November to investigate.

In an email to FierceBiotech, a Juno spokesman said the company had believed fludarabine was “an appropriately modifiable factor” that could improve the treatment regimen's safety, but that the improvement wasn't enough. “The data show that removing fludarabine did indeed reduce the incidence of severe neurotoxicity," the spokesman said. “Unfortunately, it did not completely eliminate the toxicity, and we saw additional treatment-related deaths in November.”

In March this year, the inevitable happened: Juno dropped JCAR015 completely to focus on its other CAR-T candidates. In a statement at the time, Juno said: “Through the investigation Juno identified multiple factors that may have contributed to this increased risk, including patient specific factors, the conditioning chemotherapy patients received, and factors related to the product.

“Although Juno believes there are protocol modifications and process improvements that could enable Juno to proceed with JCAR015 in clinical testing ... Juno would first need to establish preliminary safety and dose in a phase 1 trial. As a result of the timing delay that would entail and Juno’s belief that it has other product candidates in its pipeline that are likely to provide improved efficacy and tolerability,” the company decided to set JCAR015 aside.

The latest Schubert investigation centers on when and how much certain officers and directors knew or should have known about the role of JCAR015 in the patient deaths that occurred during the Phase 2 trial of JCAR015. It said the company’s representations regarding the role of fludarabine “were false or misleading."

The biotech was down 4.5% premarket, with a market cap of $3.17 billion as of yesterday.