Bluebird Bio Selling 'An Overreaction,' Data Is 'Fantastic' Says Expert

• Shares of bluebird bio Inc (NASDAQ: BLUE) were trading down more than 20 percent on Thursday morning.
• The decline seems to have been triggered both by the company’s earnings call and updated trial data for the treatment of beta-thalassemia.
• Benzinga contacted Jason Napodano, CFA, for comment. Below are his impressions.

Bluebird bio announced on Thursday that two beta0-beta0 genotypes beta-thalassemia patients needed blood transfusions, while one remains transfusion dependent. Reacting to the news (in part, but also to the company’s financial results), the shares sold off in the morning hours.

Benzinga spoke with Jason Napodano, CFA, who assured "The selling looks like an overreaction, as the data in non-B0/B0 patients looks fantastic and still like a cure.” Moreover, he noted, this represents two thirds of the market.

“The B0/B0 patients are 1/3rd of the market and still doing better than before,” he added. In fact, he continued, “The SCD data looks fantastic.”

Napodano went on, “if you thought the market opportunity for BLUE yesterday with Lenti was $X in BT and $Y in SCD, this morning it is 80% of $X (assume 100% of the 2/3rd non-B0/B0 + 50% of the 1/3rd B0/B0) + $Y.”

To conclude, the expert assured there’s “Still a big market opportunity and with the stock down 60% off the highs,” he said he believes the news is priced in. However, he expounded, “the awe of a universal cure is gone, and that perception is hurting the stock."

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.