bluebird bio’s New Blood Treatment Could Benefit Sickle Cell, Says Analyst

December 9, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Wall Street analyst are bullish on bluebird bio after its new gene therapy was able to keep four patients with a lethal blood disorder from having to receive life-sustaining blood transfusions within 90 days after they were treated, an indication it may also work on sickle cell anemia, said Joshua Schimmer, a biotech analyst at Piper Jaffray.

Shares of Bluebird shot up almost 70 percent on the news in midday trading Tuesday, as the market looked eagerly for signs that Bluebird’s LentiGlobin BB305 could be a panacea for blood diseases.

Cambridge, Mass.-based Bluebird presented the data for the study at the American Society of Hematology conference in San Francisco Monday. It also reported that one patient had been able to forgo transfusions for a full 12 months at this point.

“After a successful update at ASH and even after the post-market gap-up in shares, we believe Bluebird remains positioned for extraordinary outperformance in 2015 with its LentiGlobin program advancing in sickle cell anemia,” wrote Schimmer in a note to investors.

Bluebird’s LentiGlobin BB305 extracts blood stem cells and then infuses them with a working version of the malfunctioning gene that had caused the disease.

It treated four patients who were born with beta-thalassemia, a disease caused by a single gene that reduces or prevents the ability of red blood cells to produce hemoglobin, which is necessary to deliver oxygen to the body. People with the disease must undergo monthly blood transfusions in order to survive—but if Bluebird’s therapy continues to be successful, they may now be freed from that burden.

Patients with sickle cell anemia may also see hope in the data, said Schimmer.

“Based on the dramatic correction of Hb shown in beta-thal, we expect success in sickle cell, a transformative catalyst which would further raise the prominence of Blue's gene therapy lentivirus platform and likely markedly inflect the company's valuation,” said Schimmer. “It's hard to pick favorites among our coverage universe, but BLUE stands out as a highly liquid name with a high-probability transformational event that's still off most investors' radar screens. We are increasing our price target from $52 to $112 to reflect potential for success in sickle cell anemia.”

The new therapy is so effective, Wall Street is champing at the bit to see it be rushed into later-stage trials to bring it to market more quickly, but Schimmer urged some restraint.

“Results presented at ASH are an impressive accomplishment for the gene therapy field overall and BLUE's lentivirus platform,” he wrote. “We caution investors from over-interpreting these data and assuming 100% transfusion independence in a broader population, because VCN was lower in some patients with minimal follow-up.”