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bluebird (BLUE) Underperforms Industry YTD Amid Challenges
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bluebird bio’s (BLUE - Free Report) shares have lost 25.4% year to date compared with the industry’s decline of 7.9%.
As of now, the going is challenging for bluebird. While the approval of its three gene therapies bodes well, the uptake of the same has not gained traction as expected.
Image Source: Zacks Investment Research
The FDA approved Zynteglo for the treatment of beta-thalassemia in adult and pediatric patients requiring regular red blood cell transfusion on Aug 17, 2022. It also approved Skysona for treating early, active cerebral adrenoleukodystrophy on Sep 16, 2022.
The FDA recently approved its third gene therapy, lovotibeglogene autotemcel (lovo-cel), under the brand name Lyfgenia, for the treatment of sickle cell disease (SCD) in patients aged 12 years and older with a history of vaso-occlusive events.
However, revenues in 2023 totaled only $29.5 million. Of this amount, $16.7 million was attributable to Zynteglo and $12.4 million to Skysona, with gross-to-net discounts of 19% across both products.
bluebird anticipates 85-105 patient starts (cell collections), combined across all three of its FDA-approved therapies (Lyfgenia, Zynteglo, Skysona) in 2024.
Gene therapies are extremely complex and expensive, and it may be a while before the company starts booking profits.
Competition from stalwarts like Vertex Pharmaceuticals (VRTX - Free Report) is likely to be a headwind in capturing market share.
Concurrent with Lyfgenia’s approval, the FDA approved Vertex and CRISPR Therapeutics’ (CRSP - Free Report) exagamglogene autotemcel, a CRISPR/Cas9 genome-edited cell therapy, for the treatment of SCD in patients aged 12 years and older with recurrent vaso-occlusive crises.
Also, BLUE has priced Lyfgenia at $3.1 million per dose. Vertex and CRISPR's gene therapy will cost $2.2 million for every dose. The approval of another gene therapy for the same indication, at a lower cost, is likely to pose a challenge for bluebird. Particularly, the boxed warning of hematologic malignancy issued with Lyfgenia’s label is a setback.
Meanwhile, bluebird ended 2023 with cash, cash equivalents and restricted cash balance of approximately $275 million, including restricted cash of around $53 million.
While the funding of a $175 million five-year term loan facility from Hercules Capital should extend bluebird’s cash runaway by two years, investors do not seem impressed with the company’s financial capabilities, given the expected increase in expenses due to the manufacturing and commercialization of BLUE’s gene therapies.
The first tranche of $75 million was drawn upon the closing of the transaction. BLUE will be eligible to draw two additional tranches of $25 million each, subject to the achievement of its commercial milestones.
The company is currently restating its financial statements for 2022 and the first three quarters of 2022 and 2023.
Currently, the road to profitability looks tough for bluebird.
In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share (EPS) have improved from 22 to 30 cents. In the past year, shares of ADMA have surged 88.5%.
ADMA Biologics’ earnings beat estimates in three of the trailing four quarters and met once, delivering an average surprise of 85.00%.
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bluebird (BLUE) Underperforms Industry YTD Amid Challenges
bluebird bio’s (BLUE - Free Report) shares have lost 25.4% year to date compared with the industry’s decline of 7.9%.
As of now, the going is challenging for bluebird. While the approval of its three gene therapies bodes well, the uptake of the same has not gained traction as expected.
Image Source: Zacks Investment Research
The FDA approved Zynteglo for the treatment of beta-thalassemia in adult and pediatric patients requiring regular red blood cell transfusion on Aug 17, 2022. It also approved Skysona for treating early, active cerebral adrenoleukodystrophy on Sep 16, 2022.
The FDA recently approved its third gene therapy, lovotibeglogene autotemcel (lovo-cel), under the brand name Lyfgenia, for the treatment of sickle cell disease (SCD) in patients aged 12 years and older with a history of vaso-occlusive events.
However, revenues in 2023 totaled only $29.5 million. Of this amount, $16.7 million was attributable to Zynteglo and $12.4 million to Skysona, with gross-to-net discounts of 19% across both products.
bluebird anticipates 85-105 patient starts (cell collections), combined across all three of its FDA-approved therapies (Lyfgenia, Zynteglo, Skysona) in 2024.
Gene therapies are extremely complex and expensive, and it may be a while before the company starts booking profits.
Competition from stalwarts like Vertex Pharmaceuticals (VRTX - Free Report) is likely to be a headwind in capturing market share.
Concurrent with Lyfgenia’s approval, the FDA approved Vertex and CRISPR Therapeutics’ (CRSP - Free Report) exagamglogene autotemcel, a CRISPR/Cas9 genome-edited cell therapy, for the treatment of SCD in patients aged 12 years and older with recurrent vaso-occlusive crises.
Also, BLUE has priced Lyfgenia at $3.1 million per dose. Vertex and CRISPR's gene therapy will cost $2.2 million for every dose. The approval of another gene therapy for the same indication, at a lower cost, is likely to pose a challenge for bluebird. Particularly, the boxed warning of hematologic malignancy issued with Lyfgenia’s label is a setback.
Meanwhile, bluebird ended 2023 with cash, cash equivalents and restricted cash balance of approximately $275 million, including restricted cash of around $53 million.
While the funding of a $175 million five-year term loan facility from Hercules Capital should extend bluebird’s cash runaway by two years, investors do not seem impressed with the company’s financial capabilities, given the expected increase in expenses due to the manufacturing and commercialization of BLUE’s gene therapies.
The first tranche of $75 million was drawn upon the closing of the transaction. BLUE will be eligible to draw two additional tranches of $25 million each, subject to the achievement of its commercial milestones.
The company is currently restating its financial statements for 2022 and the first three quarters of 2022 and 2023.
Currently, the road to profitability looks tough for bluebird.
Zacks Rank & a Stock to Consider
BLUE currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the biotech sector is ADMA Biologics, Inc. (ADMA - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share (EPS) have improved from 22 to 30 cents. In the past year, shares of ADMA have surged 88.5%.
ADMA Biologics’ earnings beat estimates in three of the trailing four quarters and met once, delivering an average surprise of 85.00%.