Tailwinds Continue To Hold The Street's Gaze Toward Bluebird Bio Aloft

Wedbush Securities reiterated its Outperform rating and $117 target price on bluebird bio Inc BLUE after the company’s R&D Day highlighted improvements to gene therapy platform and favorable regulatory response.

The company’s LentiGlobin BB305 product candidate is currently in four clinical studies for the treatment of transfusion-dependent ß-thalassemia, and severe Sickle cell disease. The recent event showed data that highlighted improved transduction efficiency with new LentiGlobin process.

“Big takeaways for us is clarification of path forward in severe (β0/β0) beta thal, and promising process improvement data that suggests β0/β0 population could still be in play,” analyst David Nierengarten wrote in a note.

Related Link: Exclusive SunTrust Managing Director Discusses Bluebird Bio, A Leader In Gene Therapy

In addition, the company’s lab data shows higher VCN (vector copy number) with second generation LentiGlobin, should lead to better engraftment and outcomes in patients. The studies show that a percent of transduced cells and VCN were about 3x higher in all samples, regardless of genotype.

“Given the positive correlation between VCN and corrected globin production, and the level of improvement observed at the >1.5 VCN level achievable with improved process, we expect to see improved outcomes in patients administered 2nd gen LentiGlobin, including increased likelihood that β0/β0 patients can hit the Hb ≥ 9g/dL goal that translates to transfusion-independence,” Nierengarten added.

What It Means

In addition, the analyst noted that the EMA feedback indicates adoption of new LentiGlobin process will not derail MAA timeline in the EU, which was a potential risk.

“This announcement removes a key uncertainty, as there was risk that EMA could have designated 2nd gen LentiGlobin as an entirely new product, which would have likely necessitated additional studies in order to generate a sufficiently sized safety database,” the analyst continued.

Nierengarten still expects LentiGlobin approval in beta-thal in the EU in late 2019, about 15 months ahead of U.S. timeline.

Shares of bluebird bio closed Thursday’s trading at $65.24. In the pre-market hours Friday, the stock fell 2 percent to $63.86.

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