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bluebird (BLUE) Stock Dives on Public Offering of Common Stock
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bluebird bio (BLUE - Free Report) announced that it is floating a secondary issue of 20 million shares of its common stock to the public at an issue price of $6.00 per share (excluding underwriting discounts), approximately amounting to $120 million.
bluebird also granted an option to underwriters of the issue to purchase an additional 3 million shares at the same price.
bluebird plans to use the net proceeds from this new issue and its existing cash balance to support the commercialization and manufacturing activities for its recently approved gene therapy treatments. It also plans to use the proceeds to accelerate the future commercialization activities of its new gene therapy candidate, lovotibeglogene autotemcel (lovo-cel), for sickle cell disease.
Management will also use the proceeds for its general corporate purposes, including working capital requirements.
Shares of bluebird plummeted 17.2% on Jan 18 after the announcement. The fall in share price was likely attributable to the issuance of a large number of shares, diluting bluebird’s current shareholder base. Per an SEC filing by BLUE, its common stock outstanding as of Dec 31, 2022, is approximately 83 million. Notably, the secondary issue accounts for the issuance of common stock, representing around 25% of the current outstanding shares.
bluebird’s stock has declined 20.2% in the past year compared with the industry’s 8.9% fall.
Image Source: Zacks Investment Research
The secondary offering is expected to close on Jan 23, 2023.
Since the onset of 2022, bluebird bio has been facing the risk of a severe cash crunch. Management had expressed concerns over BLUE’s capacity to continue as a going concern due to the pressure on its existing cash balance, which is expected to dry up soon.
This secondary stock offering will strengthen bluebird’s financial position. Earlier this month, management had said its existing cash balance, which stood at $182 million as of December 2022-end, would dry out by first-quarter 2024. This new cash inflow will enable bluebird to fund its business plans and extend its existing cash runway beyond first-quarter 2023.
In the third quarter of 2022, bluebird gained FDA approvals for two of its gene therapies — Zyntelgo and Skysona. While Zyntelgo has been approved to treat beta-thalassemia in adult and pediatric patients, Skysona received accelerated approval for treating cerebral adrenoleukodystrophy (CALD) in patients under 18 years of age. The company expects to record revenues from both therapies in first-quarter 2023.
To focus on its gene therapy business, bluebird bio also completed the divestiture of its oncology business. This oncology business has been set up as an independent entity under the name 2seventy bio, Inc. (TSVT - Free Report) . Shares of 2seventy bio started trading on the NASDAQ with effect from Nov 5, 2021. As a result of the separation of the oncology business, bluebird’s partnership with Bristol Myers (BMY - Free Report) has been transferred to 2seventy bio.
Prior to the divestiture of the oncology business, bluebird collaborated with Bristol Myers to develop Abecma gene therapy, approved by the FDA in March 2021 for treating adult patients with relapsed or refractory multiple myeloma. Per the terms of the agreement, Bristol Myers is responsible for commercializing the therapy, while bluebird would be eligible to receive milestone payments and royalties on net sales of the therapy. Post separation, 2seventybio is now eligible to receive all the milestone payments and royalties under the partnership with Bristol Myers.
In the past 60 days, estimates for Allogene’s 2023 loss per share have narrowed from $2.84 to $2.82. Shares of Allogene have declined 44.7% in the past year.
Earnings of Allogene beat estimates in each of the last four quarters, witnessing an earnings surprise of 9.44%, on average. In the last reported quarter, Allogene’s earnings beat estimates by 6.45%.
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bluebird (BLUE) Stock Dives on Public Offering of Common Stock
bluebird bio (BLUE - Free Report) announced that it is floating a secondary issue of 20 million shares of its common stock to the public at an issue price of $6.00 per share (excluding underwriting discounts), approximately amounting to $120 million.
bluebird also granted an option to underwriters of the issue to purchase an additional 3 million shares at the same price.
bluebird plans to use the net proceeds from this new issue and its existing cash balance to support the commercialization and manufacturing activities for its recently approved gene therapy treatments. It also plans to use the proceeds to accelerate the future commercialization activities of its new gene therapy candidate, lovotibeglogene autotemcel (lovo-cel), for sickle cell disease.
Management will also use the proceeds for its general corporate purposes, including working capital requirements.
Shares of bluebird plummeted 17.2% on Jan 18 after the announcement. The fall in share price was likely attributable to the issuance of a large number of shares, diluting bluebird’s current shareholder base. Per an SEC filing by BLUE, its common stock outstanding as of Dec 31, 2022, is approximately 83 million. Notably, the secondary issue accounts for the issuance of common stock, representing around 25% of the current outstanding shares.
bluebird’s stock has declined 20.2% in the past year compared with the industry’s 8.9% fall.
Image Source: Zacks Investment Research
The secondary offering is expected to close on Jan 23, 2023.
Since the onset of 2022, bluebird bio has been facing the risk of a severe cash crunch. Management had expressed concerns over BLUE’s capacity to continue as a going concern due to the pressure on its existing cash balance, which is expected to dry up soon.
This secondary stock offering will strengthen bluebird’s financial position. Earlier this month, management had said its existing cash balance, which stood at $182 million as of December 2022-end, would dry out by first-quarter 2024. This new cash inflow will enable bluebird to fund its business plans and extend its existing cash runway beyond first-quarter 2023.
In the third quarter of 2022, bluebird gained FDA approvals for two of its gene therapies — Zyntelgo and Skysona. While Zyntelgo has been approved to treat beta-thalassemia in adult and pediatric patients, Skysona received accelerated approval for treating cerebral adrenoleukodystrophy (CALD) in patients under 18 years of age. The company expects to record revenues from both therapies in first-quarter 2023.
To focus on its gene therapy business, bluebird bio also completed the divestiture of its oncology business. This oncology business has been set up as an independent entity under the name 2seventy bio, Inc. (TSVT - Free Report) . Shares of 2seventy bio started trading on the NASDAQ with effect from Nov 5, 2021. As a result of the separation of the oncology business, bluebird’s partnership with Bristol Myers (BMY - Free Report) has been transferred to 2seventy bio.
Prior to the divestiture of the oncology business, bluebird collaborated with Bristol Myers to develop Abecma gene therapy, approved by the FDA in March 2021 for treating adult patients with relapsed or refractory multiple myeloma. Per the terms of the agreement, Bristol Myers is responsible for commercializing the therapy, while bluebird would be eligible to receive milestone payments and royalties on net sales of the therapy. Post separation, 2seventybio is now eligible to receive all the milestone payments and royalties under the partnership with Bristol Myers.
bluebird bio, Inc. Price
bluebird bio, Inc. price | bluebird bio, Inc. Quote
Zacks Rank & Stocks to Consider
bluebird bio carries a Zacks Rank #3 (Hold) at present. A better-ranked stock in the overall healthcare sector is Allogene (ALLO - Free Report) , which currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Allogene’s 2023 loss per share have narrowed from $2.84 to $2.82. Shares of Allogene have declined 44.7% in the past year.
Earnings of Allogene beat estimates in each of the last four quarters, witnessing an earnings surprise of 9.44%, on average. In the last reported quarter, Allogene’s earnings beat estimates by 6.45%.