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Why Is Bluebird (BLUE) Up 15.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Bluebird Bio (BLUE - Free Report) . Shares have added about 15.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Bluebird due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

bluebird Q4 Earnings Beat Estimates, Revenues Up Y/Y

bluebird reported a loss of $2.72 per share in the fourth quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of $2.83 but wider than the year-ago quarter’s loss of $2.52. The wider-than-expected year-over-year loss was due to higher research & development (R&D), and general & administrative (G&A) expenses on lower revenues.

Revenues of $19.2 million beat the Zacks Consensus Estimate of $9.8 million. Revenues were also up from $4.2 million recorded in the year-ago quarter.

Quarter in Detail

R&D expenses escalated to $119.7 million in the fourth quarter of 2018 from $92.6 million a year ago, driven by costs incurred to advance and expand the pipeline resulting in increased clinical trial-related costs and manufacturing costs for development programs, higher laboratory expenses, elevated employee-related costs due to headcount growth, and escalated facility-related costs.

G&A expenses of $53.5 million were up 83.8% in the year-ago quarter, due to higher employee-related costs as headcount increased to support overall growth.

In July 2018, bluebird raised approximately $600.6 million in net proceeds through a public equity offering. In August 2018, bluebird announced that Regeneron will make a $100-million investment in the company’s common stock at a price of $238.10 per share. The overall increase in cash, cash equivalents and marketable securities was offset by $40.0 million paid to Gritstone.

2018 Results

Revenues in 2019 came in at $54.6 million, up from $35.4 million in 2017.

Pipeline Development

bluebird’s pipeline candidates for severe genetic diseases include LentiGlobin for the treatment of transfusion-dependent β-thalassemia (TDT) and severe sickle cell disease (SCD), and Lenti-D for the treatment of cerebral adrenoleukodystrophy (CALD). The oncology pipeline includes CAR T cell product candidates — bb2121 and bb21217 — for the treatment of multiple myeloma. The company is co-developing and co-promoting bb2121 in the United States with Celgene. The pipeline progress has been encouraging.

In December 2018, bluebird bio presented new data from its three NORTHSTAR studies of LentiGlobin in patients with transfusion-dependent β-thalassemia (TDT).

In November 2018, bluebird bio and Celgene completed enrollment for the KarMMa pivotal study of bb2121, the lead investigational anti-BCMA CAR T cell therapy candidate to treat patients with relapsed/refractory multiple myeloma. The open-label, single-arm, multi-center phase II study is evaluating the efficacy and safety of bb2121 in patients with relapsed/refractory multiple myeloma. Celgene and bluebird anticipate potential approval of bb2121 in relapsed/refractory multiple myeloma in the second half of 2020.

Earlier, bluebird announced that the European Medicines Agency (“EMA”) accepted the company’s marketing authorization application (MAA) for its investigational LentiGlobin gene therapy for the treatment of adolescents and adults with transfusion-dependent β-thalassemia (TDT) and a non-β0/β0 genotype. We remind investors that LentiGlobin was previously granted an accelerated assessment by the Committee for Medicinal Products for Human Use (“CHMP”) of the EMA in July 2018, which, in turn, should reduce the EMA’s active review time of MAA from 210 days to 150 days. A tentative approval is expected by the end of 2019.  A filing in the United States is expected by 2019-end.

In January 2019, bluebird bio and Inhibrx, Inc. entered into an exclusive license agreement to research, develop and commercialize CAR T cell therapies using Inhibrx’s proprietary single domain antibody (sdAb) platform for multiple cancer targets.


How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

At this time, Bluebird has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.


Bluebird has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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