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Jounce Therapeutics Is on Track to Report Key Data Soon

Todd Campbell, The Motley Fool

Jounce Therapeutics (NASDAQ: JNCE) is working with Celgene Corp. (NASDAQ: CELG) on JTX-2011, a solid tumor cancer treatment. On Thursday, management told investors that it submitted JTX-2011 trial data, including one efficacy assessment, for presentation at the influential American Society of Clinical Oncology (ASCO) meeting in June. If this data is positive, it could clear the way for pivotal trials that could lead to JTX-2011 becoming a top-selling cancer treatment. Read on to learn more about this company's upcoming news and what it may mean to investors.

What's the backstory?

Jounce Therapeutics' JTX-2011 is a monoclonal antibody that binds to and activates the Inducible T cell CO-Stimulator (ICOS) protein found on the surface of certain T cells. It attempts to stimulate an immune response to cancer and boost the effectiveness of other cancer treatments, including Bristol Myers Squibb's (NYSE: BMY) PD-1 inhibitor, Opdivo.

A megaphone with letters shooting out of it into the air.

IMAGE SOURCE: GETTY IMAGES.

Celgene paid Jounce Therapeutics $225 million upfront for rights to JTX-2011 in 2016. Currently, JTX-2011 is in phase 2 studies that are evaluating it as a monotherapy and in combination with Opdivo for the treatment of various solid tumor cancers, including head and neck squamous cell cancer, non-small cell lung cancer, triple negative breast cancer, melanoma, and gastric cancer.

Those cancers historically display a high percentage of ICOS-expressing cells, so Jounce Therapeutics is enrolling patients based on ICOS expression to enrich its patient population and give it the best odds of delivering a clinical-trial success.

Data on deck

In June, Jounce Therapeutics plans to provide preliminary JTX-2011 data at ASCO's annual conference. Specifically, management intends to present safety data across all tumor types and preliminary efficacy of JTX-2011 as both monotherapy and in combination with PD-1 therapy in relapsing and recurring gastric cancer. It also plans to report preliminary efficacy for patients with triple negative breast cancer treated with JTX-2011 plus a PD-1 drug.

Advanced gastric cancer and triple negative breast cancer is hard to treat with limited treatment options, so positive efficacy there could lead to Jounce Therapeutics expanding its Iconic study to allow it to be a registrational study. If the company were to embrace that approach, it could accelerate JTX-2011's timeline to the Food and Drug Administration (FDA).

Jounce Therapeutics isn't saying yet what the efficacy data looks like, but when the data is released, it could be helpful to know that the response rate to Keytruda, a Merck & Co PD-1 drug that's approved for third-line gastric cancer, is 13%. There aren't any PD-1s approved for triple negative breast cancer yet, but in trials, response rates to PD-1 therapy have been pretty low. For example, the response rate to Keytruda in that patient population is only about 5%.

Many options to pursue

Immuno-oncology therapies are reshaping patient treatment and screening patients for biomarkers that help identify those who are likely to respond best to oncology therapies may be an important next step in cancer care.

There's no telling what the data will look like across all patients participating in Jounce's phase 2 program, but management's keeping its options open. Depending on the data, it could begin phase 3 trials to establish JTX-2011 as an early-line treatment or try to accelerate approval by expanding its existing trial to win an OK in late-line treatment.

If JTX-2011 were to eventually secure an FDA go-ahead, Jounce Therapeutics will benefit significantly. Celgene's licensing deal gives Jounce Therapeutics 60% of any future operating profit from JTX-2011. It can also receive milestone payments from Celgene that total in the hundreds of millions of dollars. Perhaps there's an outside possibility of a future acquisition by Celgene, too, because Celgene already owns about 2.8 million shares of Jounce Therapeutics.

If the drug comes up short in its trials, though, it likely would cause the company's shares to drop significantly. That risk makes this stock suitable for very high-risk investors only. In any event, investors will want to pay close attention to Jounce Therapeutics' upcoming presentation at the Cowen & Company healthcare conference on March 12. At that conference, management could offer up additional insight that could give more clarity to JTX-2011's potential.

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Todd Campbell owns shares of Celgene. His clients may have positions in the companies mentioned. 
The Motley Fool owns shares of and recommends Celgene. The Motley Fool has a disclosure policy.