Shares of cancer immunotherapy company Juno Therapeutics (JUNO) fell nearly 10% last Wednesday after rival drug manufacturer Novartis announced it is reorganizing its operations by consolidating its cell and gene therapy unit so that it is no longer a separate division. Although Novartis issued a press release reaffirming its commitment to this type of cutting edge cancer research, the implication is that they do not see enough revenue potential in the near future to maintain its current level of investment in it.

Juno is widely viewed as a more leveraged bet on the same type of cancer immunotherapy research that Novartis is conducting, which is why several analysts reduced their price targets for Juno after the announcement. One analyst even issued a ‘sell’ recommendation for Juno, saying that although the company has the most robust dataset on this type of research, it is lagging its peers with respect to obtaining FDA approval for marketing a treatment.

For what it’s worth, Juno has not commented on the Novartis announcement last week, nor has it issued a press release of any sort since releasing its second quarter earnings report on August 4^th (which was mostly positive). However, still weighing heavy on the company is the threat of a class-action lawsuit regarding a delay in its disclosure of the death of a trial patient earlier this year. This sort of legal action has unfortunately become business as usual on Wall Street, with dozens of high-powered law firm waiting to pounce on the next misstep.

Such is life for companies that dance on the edge of enormous technological breakthroughs. Like our other cancer immunotherapy portfolio holdings, Argos Therapeutics and ZIOPHARM Oncology, Juno is a calculated gamble that one of these companies will ultimately succeed in eventually gaining regulatory approval to sell its drugs in the U.S. Owning any one of them is a big risk, so we recommend buying all three to increase the odds of participating in the huge upside potential that waits on the other side.

To be clear, the Novartis announcement does not change our stance on Juno. Novartis is a huge company with a market capitalization (total value of all outstanding stock) of $190 billion, while Juno’s market cap is much smaller at only $3 billion. Novartis generates positive earnings from a number of other types of drugs, while Juno bleeds cash as it focuses primarily on cancer immunotherapy. That means a financial decision that makes sense for Novartis doesn’t necessarily also make sense for Juno.

All that said, we recognize the inherent risk of a company like Juno so we advise having an exit strategy for it in case things go south. That’s one of the reasons why we provide a ‘support level’ price for it (and all of our other holdings in the Special Situations portfolio), which can be used for a stop loss order for investors with a limited appetite for risk.

JUNO remains a ‘buy’ up to $34 with a ‘support level’ price of $28.