The trial involved adult patients with relapsed or refractory B cell acute lymphoblastic leukemia, and was known as the "ROCKET" trial.
The biopharmaceutical company said Thursday the deaths occurred after it added the chemotherapy drug fludarabine to the regimen. Juno proposed to the FDA to go back to old protocol without the drug, the company said in a report.
In response, the FDA requested Juno submit a complete response to the hold, which would require the company to revise several documents including its informed consent form and trial protocol. Juno said it will submit the documents to the FDA this week.
The treatment was Juno's most advanced drug candidate, and now its outlook is unclear, a factor that will likely weigh on the company's stock. JPMorgan reduced its price target for Juno shares to $39 from $63 amid the news, while FBR Capital Markets lower its price target to $61 from $73.
"Bottom line, we still have high hopes for Juno's CAR-T platform, but given the near/medium term uncertainty, we see better opportunities elsewhere in our universe and are downgrading to neutral. So far 3 patients in ROCKET have died due to cerebral edema... all received the flu/cy conditioning regimen," said JPMorgan's Cory Kasimov in a Friday note to clients.
He added, the firm would be more comfortable if the mechanism behind the neurotoxicity was better understood and, unfortunately, it doesn't sound like Juno, or anyone in the field, is close to an answer yet.
Juno said the trials and plans for its other cell product candidates are not affected by the FDA's decision.
The FDA also didn't comment on other companies working on similar therapies. However, shares of Kite Pharma were trading lower Friday, recently down 6.85 percent at $48.53.
Kite also focuses on CAR-T therapies and it said Thursday that it has completed the enrollment of patients in its phase 2 ZUMA-1 trial. The company said it expects submit its Biologics License Application with the FDA by the 2016, subject to the results of the trial.
Juno's stock has dived this year, falling nearly 37 percent.
—CNBC's Celena Chong contributed to this report.