Clear Skies For Bluebird Bio To Enter A New Inflection Point

Expressing optimism regarding the 2H prospects of bluebird bio Inc BLUE, Goldman Sachs’ Salveen Richter maintained a Buy rating on the company, with a price target of $135. The analyst believes Bluebird Bio is “entering a key value-inflection point.”

Bluebird Bio is a clinical gene or cell therapy company that is focused on rare diseases and oncology. The company has three integrated platforms, namely gene therapy, cancer immunotherapy and gene editing.

Inflection Point Ahead

Bluebird Bio’s shares have lost 14 percent year to date. While this is in-line with the NBI, the shares remain significant below their all-time high of $194, analyst Richter noted. He added that the pressure has resulted from the lack of news and the need for pipeline clarity.

Related Link: Q2 Earnings Report Card: Biotech

Richter cited the following catalysts for the stock:

1. A more potent gene therapy [Gen2] is entering the clinic, with a full LentiGlobin update expected at ASH
2. The CAR T and gene editing programs would likely be unveiled
3. Two pivotal reads in mid-2017 and beyond, resulting in a transition to a commercial focus

The Gen2 LentiGlobin is scheduled to enter the clinic in 2H16 in the global pivotal beta-thal and US Phase 1 sickle cell disease studies. “We expect higher transduction efficiency and vector copy number (VCN) to drive substantial efficacy improvements,” Richter wrote.

“Lead CAR T bb2121 (BCMA, a validated target) will likely read out in 2017, with additional programs to follow. We like the megaTAL gene editing platform and expect partnerships to emerge. Pivotal programs Lenti-D (CCALD) and LentiGlobin (beta-thal) are on track for data in mid-2017/1Q18 and commercial preparations are underway,” the analyst added.

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