Want to start a biotech buyout rumor? Start with a company 'like Juno'

AstraZeneca CEO Pascal Soriot

Anyone looking for an example of just how easy it is to start a biotech buyout rumor these days need look no further than Bloomberg's report on AstraZeneca's ($AZN) Pascal Soriot earlier in the week.

With the big ASCO meeting beginning to wind down, Bloomberg caught up with the acquisitive CEO and came away with a story that a CAR-T company such as Juno ($JUNO) could prove quite appealing to AstraZeneca, which has its own cutting-edge immuno-oncology therapy to boast of. Bloomberg quickly amended the report to say that it was CAR-T companies in general that Soriot was referring to, with Reuters adding a comment from a company spokesperson that AstraZeneca doesn't actually talk up individual companies like that.

One good reason for that was quickly apparent: Juno's shares shot up 15% as investors scurried to get ahead of the pending-buyout-offer-that-wasn't. The biotech quickly vaulted from a startup to a hot IPO to a market cap now north of $5 billion, a figure that represents the astronomical commercial hopes for a field that is reengineering T cells into cancer therapies. Adding a 15% spike is worth roughly $750 million in added value.

But with biotech assets going for big, big premiums these days--think Pharmacyclics ($21 billion) and Synageva ($8.4 billion)--any rumor seems to have enough credibility to get shares to spike.

The play-by-play on the buyout rumor shows how easy it is to get tongues wagging. Asked by a Bloomberg reporter if AstraZeneca would like to buy a CAR-T company like, say, Juno, Soriot responded:

"If at some point we conclude we need to make an acquisition, we certainly would consider it, there's no question about it," he said, according to the report. "At this stage, we have a lot on our hands. We have a full portfolio of immunoncology assets; our strategy has been, with CAR-T, to partner."

There is a problem with CAR-T, though, with cytokine release syndrome.

"The CAR-T technology has a lot of promises; we also need to find a way to manage the side effects," he added. "They can be hard to predict and they can be quite substantial."

That's not exactly a sign that AstraZeneca is preparing to sit down with an offer. Big Pharma CEOs tend to be quite guarded about buyout targets. The kerfuffle over Juno illustrates some of the reasons why. But if you wait 5 minutes, another juicy biotech buyout rumor will come along.

- here's Bloomberg's revised report
- here's the Reuters explainer

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