Shares of Juno Therapeutics, Inc. [NASDAQ:JUNO] tumbled 12.14% to close at $51.33 per share on Wednesday, after the expiration of lock-up period restrictions. The lock-up period, usually 90 to 180 days after the initial public offering (IPO), prevents major shareholders and company insiders from selling shares and flooding the market during the IPO period. According the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) filing with the U.S. Securities and Exchange Commission (SEC), Juno Therapeutics has a total of 77,939,023 shares outstanding and issued 11,022,917 shares, at $24.00 apiece, in its IPO on December 19, 2014. 

Juno Therapeutics develops chimeric antigen receptor (CAR) and T cell receptor technologies (TCR) in which T cells are genetically modified or reprogrammed to recognize and kill cancer cells. Juno's CAR T cell technology inserts a gene for a particular CAR into the T cell, enabling it to recognize cancer cells based on the expression of a specific protein located on the cell surface. Juno's TCR technology provides the T cells with a specific T cell receptor to recognize protein fragments derived from either the surface or inside the cell. According to Juno, when either type of modified T cell engages the target protein on the cancer cell, it initiates a cell-killing response against the cancer cell. 

The immunotherapy market is expected to top $31 billion by 2020, according to Goldman Sachs. In the CAR T and TCR cell spaces, Juno will be competing with Kite Pharma [NASDAQ:KITE] with its lead product candidate CD19 CAR in Phase II/III for the treatment of patients with B cell lymphomas or leukemias, Bellicum Pharmaceuticals [NASDAQ:BLCM], and Bluebird Bio [NASDAQ:BLUE]. 

Earlier this month, Bluebird Bio announced a new collaboration agreement with Celgene [NASDAQ:CELG], focusing on the development of a lead product candidate targeting the B-cell maturation antigen (BCMA) bb2121. Bluebird Bio will be receiving a $25 million milestone payment from the exchange.

Juno does not have any FDA approved products in its pipeline and therefore does not have any revenue. In the first-quarter of 2015, Juno Therapeutics reported a cash burn of $26.4 million and a net loss of $24.2 million, or $0.30 per share. The results exceeded the consensus estimates for a loss of $0.31 per share. Looking forward, Juno gave a full-year 2015 cash burn guidance of between $125 million and $150 million.

Juno’s investigational CAR T cell product candidates are in Phase I or Phase I/II, including JCAR014, laboratory treated T cells for treating patients with relapsed or refractory chronic lymphocytic leukemia, non-hodgkin lymphoma, or acute lymphoblastic leukemia, and JCAR015, for patients with precursor B cell acute lymphoblastic leukemia (B-ALL) treated with autologous T Cells genetically targeted to the B cell specific antigen CD19. Clinical results from both products were presented at the 2015 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago.

In April, Juno and AstraZeneca [NYSE:AZN] announced a collaboration between the two companies, focusing on patients with non-Hodgkin's lymphoma using Juno's CAR T cell technology and the MEDI4736 antibody developed by MedImmune, a subsidiary of AstraZeneca. On June 2, Juno Therapeutics shares spiked 15.3%, to an intra-day high of $61.50 per share, following reports on the Bloomberg terminal that AstraZeneca would consider purchasing a CAR T therapy company like Juno. 

From our technical viewpoint, JUNO has been trading in a symmetrical triangle, meaning the market can’t decide whether the stock should move higher or lower, since right after the IPO. The stock failed to make a breakout earlier this month, but managed to hit an all-time high at $69.28 as the AstraZeneca’s buyout rumor faded away. 

On Wednesday, June 17, the first day of the expiration of the lock-up period restrictions, 6.1 million shares of JUNO were traded, or about 4 times the average daily trading volume. The stock closed at $51.21 per share, just above 100-day SMA. It is anyone’s guess on how many JUNO shares major shareholders and company insiders will sell. If the selling continues, there are technical supports at $49.47 and between the $42.50 and $40.00 levels, respectively.

Disclosure: No position in JUNO. Long position in CELG. No positions in any other companies mentioned. No Recommendations.