Summary
- Jounce therapeutics is a differentiated player in the hot immuno-oncology sector.
- JNCE stock has not been fairly priced after its newly struck partnership with Gilead Sciences, making it a compelling buy for the short term.
- JNCE's drug discovery engine continues to impress, potentially making it an equally compelling pick for the longer term.
Jounce Therapeutics (JNCE) is a small biotechnology company focused on the rapidly expanding industry of immuno-oncology. Armed with a productive drug discovery platform, a unique mid-stage lead candidate in lung cancer, and a penchant for striking lucrative deals with big pharma, the future looks bright for Jounce Therapeutics. What's more, with the stock having retraced significantly after initially rising on a major partnership deal with Gilead Sciences (GILD), the future looks similarly bright for JNCE investors.
Jounce Therapeutics: Background and Overview
Jounce Therapeutics specializes in treating cancer through a relatively new approach called "immuno-oncology". This field involves creating drugs that harness patients' own immune systems to fight off cancer cells. Although this idea has existed for decades, it has only recently translated to successful medicines through the discovery of molecules known as "immune checkpoints". These are molecules that normal healthy cells can express in order to deter immune system cells from attacking them. Picture this: An immune system cell is patrolling the body, looking for foreign invaders or "self" cells that are behaving strangely (such as showing signs of cancerous growth). When the surveilling immune system cell encounters a friendly cell, it may be holding up sign that tells the immune system that everything is fine, disarming the immune cell and preventing it from launching an attack. Immune checkpoints can be viewed as this "sign" that the healthy cell uses to tell the immune system to stand down. While these checkpoint molecules are very important for healthy cells, dubious cancer cells may learn to co-opt these signals, thus becoming able grow uncontrollably while shutting down immune cells who would normally attack them.
The discovery that we could develop drugs that would block these checkpoint signals (thus preventing cancer cells from being able to disarm immune cells) was a massive breakthrough in the treatment of cancer. This revolution has lead to staggering clinical benefits, with thousands of people alive today who wouldn't be without it. The benefit for the pharmaceutical industry has been staggering as well, with the leading checkpoint inhibitor molecule, Keytruda, setting up to possibly become the best selling drug of all time.
Much of this immuno-oncology revolution was spurred by James P. Allison, an immunologist who helped discover the anti-cancer properties of checkpoint inhibitors. Shortly after gaining notoriety for this groundbreaking research that would go on to win him a Nobel prize in medicine, James Allison co-founded a company known as Jounce Therapeutics.
