Bluebird Bio (NASDAQ: BLUE) stated its deliberate acquisition by two funding corporations is, in keeping with its board, “in the very best curiosity of stockholders”—however sufficient of them felt in any other case on Friday to have despatched the corporate’s shares plummeting 42%.
The beleaguered gene remedy developer stated Friday it had entered right into a definitive settlement to be acquired by funds managed by Carlyle (NASDAQ: CG) and privately-held SK Capital Companions, partnering with a crew of veteran biotech executives led by a well-known identify with an extended resume: David Meek is ready to change into CEO of the newly-private Bluebird almost two years after he left Mirati Therapeutics, the place he spent two years as CEO earlier than the corporate’s up-to-$5.8 billion acquisition by Bristol Myers Squibb (BMS; NYSE: BMY), a deal accomplished in January 2024.
The funding corporations are promising to present Bluebird major capital to scale up business supply of its three gene therapies, every designed to deal with sickle cell illness, β-thalassemia, and cerebral adrenoleukodystrophy (CALD).
Bluebird agreed to promote itself to Carlyle and SK Capital for as much as $9.84 a share consisting of $3 a share, plus a contingent worth proper (CVR) per share of $6.84 money if Bluebird’s present portfolio of three FDA-approved gene therapies attains greater than $600 million in complete gross sales in any 12-month interval earlier than December 2027.
All that provides as much as a deal valued at simply over $29 million—lower than half (43%) of Bluebird’s roughly $68 million market capitalization (the product of the share worth and the variety of excellent shares) earlier than the buyout was introduced.
“Provided that [B]luebird was reaching the tip of its money runway, unlikely to realize near-term profitability from its ongoing business launches, and prone to defaulting on its mortgage covenants, the transition away from the general public markets was doubtless inevitable,” Sami Corwin, PhD, an analyst with William Blair, wrote Friday in a analysis be aware. “Nonetheless, the upfront acquisition worth is a 57% low cost to the inventory’s closing worth on the day prior ($7.04), which has led to the inventory buying and selling down 40% throughout market hours.”
Corwin and William Blair have modeled complete web gross sales of $282.9 million for 2025, $409.4 million for 2026, and $546.4 million for 2027.
“Subsequently, we consider that the likelihood of reaching the CVR contingency is low,” Corwin added.
Low affected person uptake
Like different builders of just lately permitted gene therapies, Bluebird has been gradual to generate demand for its merchandise. That displays challenges in securing reimbursement from payers stemming from the therapies’ excessive listing costs (Bluebird, like different gene remedy builders, assists sufferers in search of its therapies).
As of the third quarter, Bluebird stated that it had achieved solely 57 affected person begins of therapy for its three marketed gene therapies:
- 35 begins for Zynteglo™ (betibeglogene autotemcel or beti-cel)—Indicated to deal with adults and kids with β-thalassemia who require common purple blood cell transfusions ($2.8 million listing worth)
- 17 begins for Lyfgenia™ (lovotibeglogene autotemcel or lovo-cel)—Indicated to deal with sufferers 12 years of age or older with sickle cell illness and a historical past of vaso-occlusive occasions ($3.1 million listing worth)
- 5 begins for Skysona™ (elivaldogene autotemcel or eli-cel)—Indicated to gradual the development of neurologic dysfunction in boys 4–17 years previous with early, energetic CALD ($3 million listing worth)
Bluebird shouldn’t be alone in going through gradual affected person uptake.
On Friday, Pfizer (NYSE: PFE) stated it might halt additional improvement and commercialization exercise for Beqvez™ (fidanacogene elaparvovec-dzkt), lower than a yr after successful FDA approval for the hemophilia B gene remedy, citing decrease than anticipated demand from sufferers and their physicians. For the reason that FDA approved the gene remedy final April, no sufferers have been reported to have acquired Beqvez, which carried an inventory worth of $3.5 million—the identical because the hemophilia B gene remedy Hemgenix® (etranacogene dezaparvovec-drlb), co-developed by CSL (ASX: CSL) and uniQure (NASDAQ: QURE).
The Pfizer resolution displays a continued retreat from gene remedy for the pharma big. Final month, Pfizer rang in 2025 by terminating its world collaboration and license settlement with Sangamo Therapeutics (NASDAQ: SGMO) to co-develop giroctocogene fitelparvovec, a gene remedy candidate to deal with adults with reasonably extreme to extreme hemophilia A—regardless of the drug producing constructive outcomes final yr within the Section III AFFINE trial (NCT04370054).
Vertex Prescribed drugs (NASDAQ: VRTX) throughout Q3 recorded its first product income from the primary business affected person infused with Casgevy® (exagamglogene autotemcel), the CRISPR-edited remedy it co-developed with CRISPR Therapeutics (NASDAQ: CRSP). Vertex reported $2 million in Casgevy income, which Vertex included inside its $2.772 billion in product income for the quarter.
Casgevy, which carries a $2.2 million listing worth, gained FDA approval in December 2023 to deal with sickle cell illness, and a month later acquired company authorization to deal with transfusion-dependent beta thalassemia in sufferers 12 years and older. As of mid-October, 45 of the deliberate 75 approved therapy facilities (ATCs) have been activated in all areas of the world the place Casgevy has been permitted—the USA, the European Union, Nice Britain, Saudi Arabia, Bahrain, Canada, and Switzerland.
Low buyout worth
J.P. Morgan analyst Eric Joseph and three colleagues additionally famous that the buyout worth was low sufficient to have sparked the investor selloff, with the agency having beforehand projected Bluebird wouldn’t attain greater than $600 million in gross sales till 2029.
“With BLUE closing yesterday at $7.04, we anticipate shares to react negatively on this announcement, with the Road closely discounting receipt of the CVR,” Joseph and colleagues wrote Friday in a analysis be aware. Joseph maintained the agency’s “Underweight” score on Bluebird shares.
The J.P. Morgan analysts additionally highlighted one constructive facet of the Bluebird buyout. As a part of the deal, the corporate was allowed to amend its mortgage settlement with Hercules Capital to keep up enough working capital—a bit of excellent information for Bluebird, which in November reported having money, money equivalents, and restricted money of roughly $118.7 million, (of which about $48 million was restricted money) as of September 30, 2024—sufficient to fund operations solely into the primary quarter of this yr.
Bluebird secured a $175 million mortgage from Hercules in March 2024, then drew the primary $75 million, agreeing to carry off accessing the remaining $100 million pending achievement of economic milestones.
Traders, nevertheless, have been in a much less forgiving temper, sending Bluebird shares nosediving 43% to $4.004 a share firstly of premarket buying and selling at 8 a.m. ET Friday. The inventory rebounded 41% to $5.65 on the opening bell earlier than tumbling 29% to the $4 low at 10:07 a.m. ET. Bluebird shares closed Friday at $4.08.
“Value noting that Bluebird is promoting itself for a fraction of the $80M former CEO Nick Leschly comprised of promoting Bluebird inventory,” CNBC pharma reporter Angelica Peebles wrote Friday on X.
Leschly served as Bluebird’s CEO or “chief Bluebird” from 2010, when the corporate modified its identify from Genetix Prescribed drugs, to 2021, when he oversaw Bluebird’s 2021 spin-out of its oncology enterprise into 2Seventy bio, an organization that Leschly initially helmed as CEO, and nonetheless oversees as chairman.
The spin-out left Bluebird with Zynteglo, Lyfgenia, and Skysona—all autologous hematopoietic stem cell-based gene therapies for extreme genetic ailments that gained FDA approval underneath Leschly’s successor Andrew Obenshain.
“Now that we’re cut up, now we have a capability simply to deal with our mission, which is getting these three merchandise to our sufferers,” Obenshain instructed GEN Edge in 2021. “What now we have now’s zero distractions. Now we have a laser deal with launching our three transformational merchandise. We’ve allotted all of our capital and administration consideration to our most necessary priorities, and people most necessary priorities are in extreme genetic illness.”
Monetary woes, job cuts
However for all of Obenshain’s success in main Bluebird to deliver the three gene therapies to market, Obenshain couldn’t reverse Bluebird’s monetary woes regardless of a number of strikes that included restructurings with job cuts: In 2022, Bluebird eradicated about 30% of its workers (an estimated 155 jobs), aiming to generate $160 million in financial savings over the next two years. Final September, Bluebird chopped 25% of its workforce—94 workers—in a restructuring designed to chop its money working bills by 20% and allow it to interrupt even on money circulate within the second half of 2025. In December, Bluebird carried out a 1-for-20 reverse inventory cut up to keep away from being delisted from NASDAQ.
Bluebird completed the third quarter of final yr with $60.808 million web loss, considerably improved from the $87.232 million web lack of Q3 2023. The corporate noticed its complete income fall 14% yr over yr throughout Q3 of this yr, from $12.392 million to $10.612 million, a decline Bluebird blamed on quarter-to-quarter variability in drug product infusions. Nonetheless, complete revenues greater than doubled throughout Q1–Q3 2024 in contrast with January–September 2023, from $21.663 million to $45.286 million.
Two of Bluebird’s three marketed gene therapies noticed year-over-year product income positive factors. Zynteglo rose 13% from $4.851 million to $5.493 million in Q3 and almost quadrupled, zooming 290% from $9.031 million to $35.212 million in January–September 2024. Lyfgenia racked up $2.632 million through the third quarter, its first quarter of producing gross sales.
Nonetheless, Skysona product income fell two-thirds (66.5%) to $2.487 million within the third quarter of 2024 from $7.43 million within the year-ago quarter. Throughout Q1–Q3 2024, product income tumbled 40% to $7.43 million from $12.383 million a yr earlier.
“As our monetary challenges mounted, it grew to become clear that securing the suitable strategic associate was essential to maximizing worth for our stockholders and making certain the long-term way forward for our therapies. After an in depth overview course of, this acquisition represents the very best path ahead—maximizing worth for stockholders and bringing vital capital, business experience, and a dedication to offer extra sufferers the chance to learn from probably transformative gene therapies.”
Peebles’ submit on X provided one in all two extra doubtless causes for the investor wrath Bluebird incurred. The opposite is a way of alternatives misplaced by the corporate.
“Bitter finish”
“I bear in mind how liked this firm [Bluebird] was again within the CAR-T days after I watched my Kite and Juno get purchased out. I believe they’d have been acquired way back however stated no. Now they promote themselves for -99% of what they have been again then,” @Biotech2k, a “Biotech investor for over 20 years,” lamented on X. “What a bitter finish to an extended disastrous firm.”
Kite Therapeutics was acquired by Gilead Sciences (NASDAQ: GILD) for $11.9 billion in a deal accomplished in October 2017. Three months later, Juno Therapeutics discovered a purchaser in Celgene, which shelled out $9 billion for the corporate in a deal that closed in March 2018. A yr later, Celgene itself was acquired for $74 billion by BMS, a deal accomplished in November 2019.
In a profession stretching almost 4 many years Meek, Bluebird’s incoming CEO, held govt positions at Janssen Pharmaceutical Cos. of Johnson & Johnson, Novartis, Endocyte, and Baxalta earlier than serving as CEO of Ipsen, FerGene—and Mirati, the place he oversaw the U.S. launch of KRAS inhibitor Krazati® (adagrasib). Shortly earlier than BMS acquired Mirati, he left the corporate by mutual settlement with its board after the European Medicines Company’s Committee for Medicinal Merchandise for Human Use beneficial rejection of Krazati, contending that its information was weaker than that of Amgen’s Lumykras (sotorasib).
Meek was elected chairman of uncommon illness drug developer Swedish Orphan Biovitrum (Sobi) in December.
In Bluebird’s assertion asserting the buyout, Meek stated the deliberate funding by Carlyle and SK Capital will deliver to the corporate the capital and business capabilities it must deliver Bluebird’s gene therapies to extra sufferers, extra shortly—and make some constructive historical past for the gene remedy pioneer.
“[B]luebird is constructed on a unprecedented legacy of scientific breakthroughs, and we’re dedicated to unlocking its full potential for sufferers,” Meek said.
Leaders and laggards
- Acelyrin (NASDAQ: SLRN) shares rose 20% from $2.17 to $2.60 Friday after the corporate confirmed receipt of an unsolicited indication of curiosity from Concentra Biosciences to accumulate all of Acelyrin’s excellent shares for $3 per share money, plus a contingent worth proper that represents the suitable to obtain 80% of the online proceeds from any out-license or disposition of Acelyrin’s improvement applications or mental property. Concerta’s controlling shareholder is Tang Capital Companions, a life sciences-focused funding firm headed by Kevin Tang. The provide got here two weeks after Acelyrun introduced an settlement to merge with Alumis (NASDAQ: ALMS) in an all-stock transaction anticipated to shut within the second quarter, topic to approval by shareholders of each firms and different customary closing circumstances. The Alumis merger would create a mixed firm with $737 million in professional forma money plus three candidates in scientific trials.
- CNS Prescribed drugs (NASDAQ: CNSP) shares skidded 41% from 14 cents to eight cents Wednesday after the developer of therapies for major and metastatic cancers within the mind and central nervous system introduced a 1-for-50 reverse inventory cut up that took impact Friday. CNS stated the reverse inventory cut up was primarily meant to deliver it into compliance with Nasdaq’s $1 minimal per-share worth itemizing requirement. CNS shares will proceed to commerce on the Nasdaq Capital Market underneath the image CNSP, however underneath a brand new CUSIP quantity, 18978H409.
- FibroGen (NASDAQ: FGEN) shares soared 37.5% from 56 cents to 77 cents Thursday after the corporate stated it was promoting its China subsidiary to AstraZeneca (London Inventory Change: AZN) for roughly $160 million. By means of the deal, AstraZeneca secured all Chinese language rights to roxadustat, a therapy for anemia in power kidney illness with a pending regulatory resolution for chemotherapy-induced anemia. FibroGen stated the deal will lengthen its money runway into 2027 and allow it to proceed advancing scientific improvement applications for FG-3246, a first-in-class, CD46 concentrating on antibody drug conjugate, and FG-3180, a companion PET imaging agent, in metastatic castration-resistant prostate most cancers. FibroGen will obtain from AstraZeneca $85 million plus its web money held in China at closing, now estimated to be roughly $75 million.
- Septerna (NASDAQ: SEPN) shares plummeted 47% from $12.96 to $6.87 Tuesday after the corporate acknowledged that it was halting the Section I single- and multiple-ascending dose (SAD/MAD) trial assessing lead candidate SEP-786—an oral small molecule PTH1R agonist for hypoparathyroidism—in wholesome volunteers. The corporate disclosed two unanticipated extreme (Grade 3) occasions of elevated unconjugated bilirubin within the trial’s MAD portion, each with out elevations in ALT, AST, and GGT liver enzyme ranges. Dosing was ended for each research individuals, and the bilirubin elevations have been reversible. No occasions of liver harm, cholestasis, or hemolysis had occurred to any individuals, and no critical antagonistic occasions (SAEs) befell within the research, Septerna stated. “Now we have a number of enticing PTH1R agonists from which we plan to pick a next-generation candidate to speed up towards the clinic later this yr to shortly regain momentum with our PTH1R program,” said Jeffrey Finer, MD, PhD, Septerna’s CEO and co-founder.
- Stable Biosciences (NASDAQ: SLDB) shares climbed 31.5% from $4.03 to $5.30 Tuesday after the corporate introduced constructive preliminary information from the Section I/II INSPIRE DUCHENNE trial (NCT06138639) evaluating SGT-003, a next-generation gene remedy candidate. Interim 90-day biopsy information reported within the first three individuals confirmed a mean microdystrophin expression of 110%, as measured by western blot, and enhancements in a number of biomarkers that indicated muscle well being and resilience. “In mid-2025, we plan to request a gathering with the FDA to debate the potential for an accelerated approval regulatory pathway for SGT-003,” Stable’s president and CEO Bo Cumbo stated.
