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bluebird bio Reports Second Quarter 2017 Financial Results and Recent Operational Progress

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– Completed enrollment in Northstar-2, Phase 3 study of LentiGlobinTM
drug product in patients with transfusion-dependent β-thalassemia (TDT)
and non-β
00
genotypes –

– Presented updated clinical results from studies in
relapsed/refractory multiple myeloma, TDT and severe sickle cell disease
(SCD) at American Society of Clinical Oncology (ASCO) Annual Meeting and
European Hematology Association (EHA) Annual Meeting –

– Announced topline interim clinical data from Starbeam Study of
Lenti-D
TM drug product in cerebral
adrenoleukodystrophy (CALD) –

– Appointed John O. Agwunobi, M.D. and Douglas A. Melton, Ph.D. to
Board of Directors –

– Completed public offering of common stock, raising net proceeds of
$436.8 million; ended quarter with $1.2 billion in cash, cash
equivalents and marketable securities –

bluebird bio, Inc. (Nasdaq:
BLUE
), a clinical-stage company committed to developing potentially
transformative gene therapies for severe genetic diseases and T
cell-based immunotherapies for cancer, today reported business
highlights and financial results for the second quarter ended June 30,
2017.

"In the first half of 2017, we've made tremendous progress against our
stated goals and continue to build momentum to the end of the year. New
data from our bb2121 anti-BCMA CAR T program reinforced our confidence
in this program, and we and Celgene are moving full speed ahead to
continue to the next stage of development. We presented early data
demonstrating the impact of manufacturing improvements for LentiGlobin,
with our first patients with TDT in Northstar-2 showing significantly
higher drug product VCNs than we saw in previous studies. We also
announced interim data from the first 17 patients in the Starbeam study
of Lenti-D that showed 88% of those patients met the primary endpoint,"
said Nick Leschly, chief bluebird. "We look forward to sharing more of
our progress later this year at ASH, where we will provide updated data
on our TDT and multiple myeloma programs, as well as a first look at the
progress made in the HGB-206 study in severe SCD with changes in the
study protocol. For the rest of the year, we're remaining laser-focused
on the execution of our clinical development goals across our programs
to bring our transformative therapies to patients and on preparing our
organization to bring our gene therapy products to many more patients in
a commercial setting."

Recent Highlights

  • COMPLETED ENROLLMENT IN NORTHSTAR-2 – In June, bluebird bio
    completed the enrollment of the adult and adolescent patient cohort in
    the Northstar-2 study of LentiGlobin drug product in patients with TDT
    and non-β00 genotypes.
  • UPDATED DATA FROM BB2121 ANTI-BCMA CAR T PROGRAM PRESENTED – At
    ASCO in June, bluebird bio presented updated results from the ongoing
    CRB-401 Phase 1 clinical study of bb2121, an investigational anti-BCMA
    CAR T cell therapy, in 18 patients with relapsed/refractory multiple
    myeloma. 100% of the 15 evaluable patients in active dose cohorts
    (doses above 50 x 106) achieved an objective response;
    overall response rate (ORR) across all cohorts (n=18) was 89%. 73% of
    evaluable patients in active dose cohorts achieved a very good partial
    response (VGPR) or better; 27% complete response (CR) rate across
    active dose cohorts. All patients tested for minimal residual disease
    (MRD) status (n=4) were found to be MRD-negative. No disease
    progression had been observed in active dose cohorts as of the May 4,
    2017 data cut-off; range of follow-up was 8 to 54 weeks. No
    dose-limiting toxicities had been observed. The objective of this
    Phase 1 dose-escalation study is to evaluate the safety and efficacy
    of bb2121 and determine a recommended Phase 2 dose. bluebird bio and
    Celgene are jointly developing bb2121.
  • EARLY DATA FROM NORTHSTAR-2 PRESENTED – At EHA in June,
    bluebird bio presented early data from its Phase 3 Northstar-2
    (HGB-207) study of LentiGlobin drug product in patients with
    transfusion-dependent β-thalassemia (TDT) and non-β00
    genotypes. Drug product vector copy number (DP VCN) and
    percentage of lentiviral vector positive cells (LVV+) for the initial
    7 drug product lots manufactured in Northstar-2 were consistently
    higher than in Northstar (HGB-204), with a median DP VCN of 3.0.
    Initial results show that the three patients treated to date had
    achieved in vivo VCN and HbAT87Q production as good
    as or better than patients achieving transfusion independence in
    Northstar. The first patient treated in Northstar-2 with 6 months of
    follow-up achieved normal levels of total hemoglobin (13.3 g/dL) after
    discontinuing transfusions, producing 9.5 g/dl of HbAT87Q
    at last follow-up. The safety profile was consistent with autologous
    transplantation.
  • NEW DATA FROM HGB-205 PRESENTED – At EHA in June, bluebird bio
    presented new data from the HGB-205 study of LentiGlobin drug product
    in patients with TDT and severe sickle cell disease (SCD). Ongoing
    transfusion independence up to 3.5 years was observed in patients with
    TDT; three patients have discontinued iron chelation. The first
    patient with SCD treated with gene therapy (Patient 1204) continues to
    show clinically meaningful improvement in symptoms of SCD and stable
    vector copy number and HbAT87Q in peripheral blood. Two
    recently treated patients with severe SCD show increasing levels of HbAT87Q
    and stable in vivo VCN. As with Patient 1204, the first patient
    with SCD treated in HGB-205, these two patients received a more
    stringent busulfan conditioning regimen and regular blood transfusions
    prior to stem cell harvest.
  • TOPLINE INTERIM LENTI-D DATA ANNOUNCED – In June, bluebird bio
    announced topline interim clinical data on the initial 17 patients
    treated in the Starbeam study of Lenti-D drug product in CALD. As of
    June 13, 15/17 patients (88%) in initial study cohort remain free of
    major functional disabilities (MFDs) at 24 months, the primary
    endpoint of the trial. This exceeds bluebird's pre-defined interim
    efficacy benchmark for the study of MFD-free survival of 76%, derived
    from the literature and based on clinical data from an earlier
    observational study describing that natural history of CALD and
    outcomes from allogeneic hematopoietic stem cell transplant. The
    safety profile of Lenti-D was consistent with myeloablative
    conditioning. No patients treated with Lenti-D had graft versus host
    disease, and there was no graft rejection or clonal dominance. An
    expansion cohort is enrolling additional patients to gain European
    manufacturing experience.
  • NEW BOARD APPOINTMENTS – In June, bluebird bio appointed John
    O. Agwunobi, M.D. and Douglas A. Melton, Ph.D. to its Board of
    Directors.
  • DUKE COLLABORATION – In May, bluebird bio announced that it has
    entered into a collaboration with Duke University's Robert J.
    Margolis, MD, Center for Health Policy to develop a broadly-supported
    path for value-based payment reform models for gene therapies and
    other innovative treatments.
  • STRENGTHENED BALANCE SHEET – In June, bluebird raised $436.8
    million in net proceeds in an equity financing. The company's cash,
    cash equivalents and marketable securities are sufficient to fund
    operations into 2020 based on the company's current business plan.
    Proceeds from the equity financing will fund the potential exercise of
    the option to co-develop and co-promote bb2121; planned clinical
    studies in oncology and severe genetic diseases; and to further expand
    the company's manufacturing platform and capabilities to support
    ongoing and anticipated product development efforts and in
    anticipation of a potential commercial launch; and general and
    administrative expenses.

Second Quarter 2017 Financial Results and Financial Guidance

  • Cash Position: Cash, cash equivalents and marketable securities
    as of June 30, 2017 were $1.2 billion, compared to $884.8 million as
    of December 31, 2016, an increase of $312.2 million.
  • Revenues: Total revenue was $16.7 million for the second
    quarter of 2017 compared to $1.6 million for second quarter of 2016.
    The increase is primarily attributable to revenue recognized under
    bluebird bio's out-licensing agreements with Novartis Pharma AG and
    GlaxoSmithKline Intellectual Property Development Limited (GSK) and
    the commencement of revenue recognition for the bb2121 license and
    manufacturing services under the company's agreement with Celgene.
  • R&D Expenses: Research and development expenses were $64.3
    million for the second quarter of 2017 compared to $41.8 million for
    the second quarter of 2016. The increase in research and development
    expenses was primarily attributable to increased manufacturing
    expenses, clinical trial expenses, and employee-related costs due to
    increased headcount to support overall growth.
  • G&A Expenses: General and administrative expenses were
    $21.2 million for the second quarter of 2017 compared to $18.4 million
    for the second quarter of 2016. The increase in general and
    administrative expenses was primarily attributable to increased
    employee-related costs due to increased headcount, and increased
    facility-related expenses to support overall growth.
  • Net Loss: Net loss was $70.9 million for the second quarter of
    2017 compared to $58.8 million for the second quarter of 2016.
  • Financial Guidance: bluebird bio expects that its cash, cash
    equivalents and marketable securities of $1.2 billion as of June 30,
    2017 will be sufficient to fund its current operations into 2020.

About bluebird bio, Inc.

With its lentiviral-based gene therapies, T cell immunotherapy expertise
and gene editing capabilities, bluebird bio has built an integrated
product platform with broad potential application to severe genetic
diseases and cancer. bluebird bio's gene therapy clinical programs
include its Lenti-D™ product candidate, currently in a Phase 2/3 study,
called the Starbeam Study, for the treatment of cerebral
adrenoleukodystrophy, and its LentiGlobin™ product candidate, currently
in four clinical studies for the treatment of transfusion-dependent
β-thalassemia, and severe sickle cell disease. bluebird bio's oncology
pipeline is built upon the company's leadership in lentiviral gene
delivery and T cell engineering, with a focus on developing novel T
cell-based immunotherapies, including chimeric antigen receptor (CAR T)
and T cell receptor (TCR) therapies. bluebird bio's lead oncology
program, bb2121, is an anti-BCMA CAR T program partnered with Celgene.
bb2121 is currently being studied in a Phase 1 trial for the treatment
of relapsed/refractory multiple myeloma. bluebird bio also has discovery
research programs utilizing megaTAL/homing endonuclease gene editing
technologies with the potential for use across the company's pipeline.

bluebird bio has operations in Cambridge, Massachusetts, Seattle,
Washington and Europe.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including
statements regarding the Company's financial condition and results of
operations, as well as the advancement of, and anticipated development
and regulatory milestones and plans related to the Company's product
candidates and clinical studies. Any forward-looking statements are
based on management's current expectations of future events and are
subject to a number of risks and uncertainties that could cause actual
results to differ materially and adversely from those set forth in or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, risks that the
preliminary results from our clinical trials will not continue or be
repeated in our ongoing clinical studies, the risk of cessation or delay
of any of the ongoing or planned clinical studies and/or our development
of our product candidates, the risk of a delay in the enrollment of
patients in our clinical studies, the risks that the changes we have
made in the LentiGlobin drug product manufacturing process or the
HGB-206 clinical study protocol will not result in improved patient
outcomes, risks that the current or planned clinical studies of the
LentiGlobin drug product will be insufficient to support regulatory
submissions or marketing approval in the United States and European
Union, the risk that our collaborations, including our collaboration
with Celgene, will not continue or will not be successful, and the risk
that any one or more of our product candidates will not be successfully
developed, approved or commercialized. For a discussion of other risks
and uncertainties, and other important factors, any of which could cause
our actual results to differ from those contained in the forward-looking
statements, see the section entitled "Risk Factors" in our most recent
Form 10-Q, as well as discussions of potential risks, uncertainties, and
other important factors in our subsequent filings with the Securities
and Exchange Commission. All information in this press release is as of
the date of the release, and bluebird bio undertakes no duty to update
this information unless required by law.

 

bluebird bio, Inc.

Condensed Consolidated Statements of Operations Data

(unaudited)

(in thousands, except per share data)

 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  2017       2016     2017       2016  
Revenues:
License revenue $ 10,570 $ $ 10,570 $
Collaboration revenue   6,146     1,552     12,978     3,051  
Total revenues   16,716     1,552     23,548     3,051  
Operating expenses:
Research and development 64,311 41,760 119,339 83,671
General and administrative 21,197 18,363 41,481 34,318

Change in fair value of contingent consideration

  (970 )   1,404     463     2,417  
Total operating expenses   84,538     61,527     161,283     120,406  
Loss from operations (67,822 ) (59,975 ) (137,735 ) (117,355 )
Interest (expense) income, net (2,242 ) 981 (687 ) 1,932
Other (expense) income, net   (834 )   (76 )   (1,189 )   (66 )
Loss before income taxes (70,898 ) (59,070 ) (139,611 ) (115,489 )
Income tax benefit       226         371  
Net loss $ (70,898 ) $ (58,844 ) $ (139,611 ) $ (115,118 )
Net loss per share - basic and diluted: $ (1.73 ) $ (1.59 ) $ (3.41 ) $ (3.12 )

Weighted-average number of common shares used in computing net
loss per share - basic and diluted:

  41,035     36,954     40,936     36,937  
 
 

bluebird bio, Inc.

Condensed Consolidated Balance Sheets Data

(unaudited)

(in thousands)

 
 

As of
June 30,
2017

 

As of
December 31,
2016

Cash, cash equivalents and marketable securities $ 1,197,059 $ 884,830
Total assets 1,457,130 1,118,122
Total liabilities 257,111 248,682
Total stockholders' equity 1,200,019 869,440

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