With Celgene buyout, Juno CEO Hans Bishop set for monster payout of $287M

Juno CEO Hans Bishop is set for a parachute payment that rivals the industry's largest. (Hans Bishop on Twitter)

In just a few years, Juno Therapeutics has grown from being a private company working on exploratory technology to a publicly traded biotech that attracted a sizable buyout offer. Now, its helmsman for the entire ride, Hans Bishop, is set to take home up to $287 million for his efforts.

In an acquisition announced last month, Celgene agreed to buy Juno Therapeutics for $9 billion—or $87 per share—to get its hands on the company's promising CAR-T technology. As a holder of more than 2.3 million Juno shares and its leader since the start, Bishop is in line for a golden parachute that ranks among the industry's largest. 

So, how does Bishop's payout break down?  

The Juno CEO is in line to receive $205 million for his shares, according to a securities filing on the deal, plus $68 million in vested and unvested stock options, and $13.6 million in vested and unvested stock units whose payouts are based on performance and issue dates. And then there's the $1.31 million cash severance, which is less than .05% of the total.

Also set to make out big from the buyout is Arch Venture Partners, an early Juno investor that held more than 10 million shares. According to the proxy, Arch will reap $922 million from the deal. 

Arch saw Juno's promise early, backing the company in a $120 million series A in 2014. Since then, as industry watchers know, the biotech pulled off a $265 million IPO and advanced through clinical development with anticancer therapies that eventually attracted a $9 billion buyout offer from Celgene. 

It wasn't always a smooth path, though, as trial deaths forced the biotech to abandon its lead drug and refocus on JCAR017. Now, Celgene is hoping the Juno buy can position it among the leaders in the emerging cell therapy field.

According to the filing, Celgene initially pushed for due diligence on a potential Juno buy at $80 per share but Juno executives held them off; Celgene eventually offered $86 to get a look at Juno's books. After further negotiations, the two sides set a final price of $87 per share. Under the deal, Celgene wanted "broad employee retention" because the technology is still in development stages.

During the deal negotiations last year, Juno had some interest from a publicly traded healthcare company, or "Party A," that ultimately waned in mid-December, according to the proxy.

Celgene believes Juno's lead drug can bring in $3 billion in peak sales. The company pulled the trigger on its Juno buy a few months after Gilead bought Kite Pharma for $11.9 billion and after Novartis won the first-ever CAR-T approval for Kymriah. 

While Bishop will haul in a pile of cash with the buyout, his parachute payment will come up far short of Kite Pharma CEO Arie Belldegrun's $600-plus million payout following the Gilead deal. Before that, Medivation CEO David Hung made $354 million after his company's sale to Pfizer.