Roth Says Buy The Dip In This Biotech

Since it hit a 52-week high on May 29, bluebird bio Inc BLUE is more than 18 percent lower. Debjit Chattopadhyay, an analyst with Roth Capital Partners, said that given this correction, it is now time to buy the dip. Heading into the American Society of Hematology meeting in Q4, Roth said that the company's shares should "be back in favor."

Though the stock has outperformed the iShares NASDAQ Biotechnology Index IBB, rising 71 percent versus 22 percent this year, Roth expects the stock to continue to do well. The company, which is a "pioneer" in gene therapy, has patients enrolled in three gene therapy studies. Data from these studies will be available when the ASH meeting abstracts become available in October.

Roth also applauded bluebird's recent "strategic collaboration" with Kite Pharma Inc KITE that focuses on treating HPV-associated cancers. Critically, the partnership broadens the company's "strategic focus in immunotherapies."

Roth placed its price target at $192, roughly 22 percent above current price. At that price, $119 in value will be contributed by bluebird's treatments for ß-Thalassemia, a group of inherited blood disorders. Roth estimated that there are 13,500 ß-Thalassemia patients in developed markets.

Comparatively, there are 105,000 patients that would benefit from the company's SCD treatments, though the lower cost means that it drives less value ($44) in the stock.