Why biotech darling Bluebird crashed on Thursday despite solid gene therapy data
- Bluebird Bio has an investigational gene therapy, Lentiglobin, to treat patients with various types of anemia. There are nine patients in clinical trials who have been treated with the therapy for a period of six to eighteen months.
- On Thursday, Bluebird delivered results from its ongoing study of these patients. Six of the nine patients have not required a blood transfusion, which suggests the treatment is working. However, three of the nine have needed at least some transfusions. These three patients have a more severe disease form, and it should be noted that while they did require transfusions, they did not have to receive as many as Cooley's anemia patients usually do.
- Although two-thirds of the patients appear to be cured, the market seems unforgiving, with Bluebird Bio trading at a 52-week low after losing as much as 22% market value after the news was released (it has recovered a percentage point or two in early Friday trading).
On the face of it, a 2/3 cure rate for diseases that previously required frequent transfusions is a good thing, and last year, this news most likely would have generated a positive response.
But this is not last year. Certain factors, such as a biotech index that has been pummeled by various market forces and a tense drug-pricing environment, are making it harder for biotech companies to ride high on so-so, or even fairly good, news—especially considering how pricey gene therapies will likely be once approved.
This is the second time that the stock has dropped precipitously in the last three weeks. In mid-October, Bluebird shares sank 6.5% after the company said a patient with the blood disorder beta-thalassemia, who was treated with a first-generation version of the gene therapy, had a relapse after more than seven years.
But regardless of what's going on with the price of the stock and the attitudes of investors, Bluebird Bio is continuing to track its clinical trial patients and hoping for the best outcomes. An FDA approval is still a strong possibility, and the company may very well still become the first firm with an approved gene therapy in the U.S.