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bluebird bio Reports Second Quarter 2018 Financial Results and Highlights Operational Progress

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- Lenti-D™ granted Priority Medicines (PRIME) designation from
European Medicines Agency (EMA) and Breakthrough Designation from U.S.
Food and Drug Administration (FDA) in cerebral
adrenoleukodystrophy (CALD) –

- LentiGlobin™ in transfusion-dependent β-thalassemia (TDT) granted
accelerated assessment of Marketing Authorization Application (MAA) from
EMA -

- Ended quarter with $1.46 billion in cash, cash equivalents and
marketable securities –

- Completed public offering of common stock in July 2018, raising net
proceeds of approximately $600.6 million –

bluebird
bio, Inc
. (NASDAQ:BLUE) today reported financial results and
business highlights for the second quarter ended June 30, 2018.

"The clinical data presented this spring across our development programs
in TDT, SCD and multiple myeloma have further reinforced the strength of
our gene and cell therapy platforms, and we are putting tremendous
effort towards bringing all four of our clinical programs to patients as
soon as possible," said Nick Leschly, chief bluebird. "In the second
half of the year, we anticipate reaching a significant milestone for
bluebird, by filing for our first potential regulatory approval in
Europe with LentiGlobin to treat TDT. As we prepare to make this
important transition to a commercial company, with the potential for
three initial product approvals by the end of 2020, our readiness and
implementation plans are well underway. We are also investing and
building for our next phase of growth through a sustainable innovation
engine, and a strong development and commercial infrastructure to allow
us to bring more transformative therapies to patients."

Recent Highlights

TDT

  • LENTIGLOBIN ACCELERATED ASSESSMENT – In July 2018, the
    Committee for Medicinal Products for Human Use (CHMP) of the European
    Medicines Agency (EMA) granted an accelerated assessment to
    LentiGlobin in transfusion-dependent β-thalassemia (TDT). The company
    is on track to submit a Marketing Authorization Application (MAA) to
    the EMA for LentiGlobin in 2018.
  • NEW DATA FROM NORTHSTAR AND NORTHSTAR-2 PRESENTED – At the
    Annual Congress of the European Hematology Association (EHA) in June
    2018, bluebird bio presented new data from its studies of LentiGlobin
    in patients with TDT: Northstar (HGB-204) and Northstar-2 (HGB-207).
    As of the data cutoff, 7/8 non-β00 patients
    with ≥ 6 months follow-up were producing normal or near-normal amounts
    of total hemoglobin (11.1 – 13.3 g/dL) and were transfusion free in
    Northstar-2. 8/10 of non-β00 patients achieved
    and maintained transfusion independence for up to 3 years in
    Northstar. Across both studies, the safety profile was consistent with
    myeloablative conditioning.
  • FIRST PEDIATRIC PATIENT TREATED – In April 2018, the first
    pediatric patient was treated in Northstar-3 (HGB-212), bluebird bio's
    Phase 3 study of LentiGlobin in patients with β00
    genotypes.

SCD

  • NEW DATA FROM HGB-206 PRESENTED – At EHA in June 2018, bluebird
    bio presented new data from the HGB-206 study of LentiGlobin in
    patients with severe sickle cell disease (SCD). As of the data cutoff,
    all patients (n=4) in Group C with ≥ 3 months follow-up were
    consistently producing ≥ 30% anti-sickling HbAT87Q. The
    first Group C patient was generating a normal total hemoglobin of 14.2
    g/dL with over 60% anti-sickling HbAT87Q at 6 months.
    Across all patients in the study, the safety profile was consistent
    with myeloablative conditioning.

MULTIPLE MYELOMA

  • NEW DATA FROM CRB-401 PRESENTED – At the American Society of
    Clinical Oncology (ASCO) Annual Meeting in June 2018, bluebird bio and
    Celgene Corporation presented new data from the ongoing CRB-401 Phase
    1 clinical study of bb2121, an investigational anti-B-cell maturation
    antigen (BCMA) CAR T cell therapy, in 43 patients with late-stage
    relapsed/refractory multiple myeloma. Deep and durable responses were
    observed at active doses (≥150 × 106 CAR+ T cells). A
    median progression-free survival (PFS) of approximately one year was
    achieved in heavily pre-treated patients in the active doses of the
    dose escalation cohort. Consistent response rates were observed for
    both low and high BCMA expression levels. Adverse events have been
    manageable across doses.

CALD

  • PRIME DESIGNATION FOR LENTI-D – In July 2018, the EMA granted
    access to its Priority Medicines (PRIME) scheme for Lenti-D for the
    treatment of patients with cerebral adrenoleukodystrophy (CALD).
    The PRIME initiative provides enhanced support and increased
    interaction to companies, with the goal of optimizing development
    plans and speeding regulatory evaluations to potentially bring
    innovative medicines to patients more quickly. To be accepted for
    PRIME, a therapy must demonstrate potential to benefit patients with
    unmet medical need through early clinical data or nonclinical data.
  • BREAKTHROUGH DESIGNATION FOR LENTI-D – In May 2018, the U.S.
    Food and Drug Administration (FDA) granted Breakthrough Therapy
    designation to Lenti-D for the treatment of patients with CALD.
    Lenti-D previously was granted Orphan Drug designation by the FDA and
    EMA, as well as Rare Pediatric Disease designation by the FDA.

COMPANY

  • STRENGTHENED BALANCE SHEET – In July 2018, bluebird bio raised
    approximately $600.6 million in net proceeds through a public equity
    offering. bluebird bio anticipates that its cash, cash equivalents and
    marketable securities will be sufficient to fund operations into 2022
    based on the company's current business plan.

Second Half 2018 Anticipated Milestones

TDT

  • Submission of a MAA to the EMA for LentiGlobin in patients with TDT
    and non-β00 genotypes
  • Submission of LentiGlobin clinical data from the Northstar-2 (HGB-207)
    clinical study in patients with TDT and non-β00 genotypes
    to the American Society of Hematology (ASH) Annual Meeting
  • Submission of LentiGlobin clinical data from the Northstar-3 (HGB-212)
    clinical study in patients with TDT and the β00
    genotype to the ASH Annual Meeting

SCD

  • Update on the clinical development plan and registration strategy for
    LentiGlobin in SCD
  • Submission of LentiGlobin clinical data from the HGB-206 clinical
    study in patients with SCD to the ASH Annual Meeting

Multiple Myeloma

  • Submission of bb21217 clinical data from the CRB-402 clinical study in
    patients with relapsed/refractory multiple myeloma to the ASH Annual
    Meeting
  • Initiation by Celgene of a Phase 3 clinical study of bb2121 in third
    line multiple myeloma

CALD

  • Presentation of Lenti-D clinical data from the ongoing Starbeam
    clinical study in patients with CALD in the second half of 2018

Second Quarter 2018 Financial Results

  • Cash Position: Cash, cash equivalents and marketable securities
    as of June 30, 2018 and December 31, 2017 were $1.46 billion and $1.61
    billion, respectively.
  • Revenues: Total revenues were $7.9 million for the three months
    ended June 30, 2018 compared to $16.7 million for the three months
    ended June 30, 2017. The decrease of approximately $8.9 million was
    primarily attributable to license revenue recognized in the second
    quarter of 2017 as a result of out-licensing arrangements entered into
    during that quarter. Total revenues were $23.8 million for six months
    ended June 30, 2018 compared to $23.5 million for six months ended
    June 30, 2017. The increase of $0.3 million was primarily attributable
    to an overall increase in collaboration revenue for the bb2121 license
    and manufacturing services under the company's agreement with Celgene,
    offset by a decrease in license and royalty revenue.
  • R&D Expenses: Research and development expenses were $115.0
    million for the three months ended June 30, 2018 compared to $63.9
    million for the three months ended June 30, 2017. Research and
    development expenses were $212.1 million for six months ended June 30,
    2018 compared to $118.9 million for six months ended June 30, 2017.
    The increase in both periods was driven by costs incurred to advance
    and expand the company's pipeline and is attributable to increased
    clinical trial-related costs and manufacturing costs for development
    programs, increased laboratory expenses, increased employee-related
    costs due to headcount growth, and increased license milestones and
    fees under the company's strategic collaboration and license
    agreements.
  • G&A Expenses: General and administrative expenses were
    $41.2 million for the three months ended June 30, 2018 compared to
    $21.2 million for the three months ended June 30, 2017. General and
    administrative expenses were $76.1 million for six months ended June
    30, 2018 compared to $41.5 million for six months ended June 30, 2017.
    The increase in both periods was attributable to increases in
    employee-related costs due to increased headcount to support overall
    growth, commercial-readiness activities, and professional and
    consulting fees.
  • Net Loss: Net loss was $146.0 million for the three months
    ended June 30, 2018 compared to $70.9 million for the three months
    ended June 30, 2017. Net loss was $261.1 million for six months ended
    June 30, 2018 compared to $139.6 million for six months ended June 30,
    2017.

About bluebird bio, Inc.

With its lentiviral-based gene therapies, T cell immunotherapy expertise
and gene editing capabilities, bluebird bio (NASDAQ:BLUE) has built a
pipeline with broad potential application in severe genetic diseases and
cancer.

bluebird bio's gene therapy clinical programs include investigational
treatments for cerebral adrenoleukodystrophy, transfusion-dependent
β-thalassemia, also known as β-thalassemia major, and severe sickle cell
disease.

bluebird bio's oncology pipeline is built upon the company's 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. The company's lead oncology
programs are anti-BCMA CAR T programs partnered with Celgene.

bluebird bio's discovery research programs include 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; Durham, North Carolina and Zug, Switzerland.

LentiGlobin and Lenti-D are trademarks of bluebird bio, Inc.

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, results of
operations and sufficiency of its cash, cash equivalents and marketable
securities to fund its planned operations, as well as statements
regarding the anticipated development and regulatory milestones and
plans for the Company's product candidates and clinical studies and
statements regarding the Company's plans to provide updates on the
development of its product candidates. 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, the risks that the
preliminary positive efficacy and safety results from our prior and
ongoing clinical trials of our product candidates will not continue or
be repeated in our ongoing clinical trials, 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, risks that the current
or planned clinical trials of our LentiGlobin, Lenti-D, bb2121 or
bb21217 product candidates will be insufficient to support regulatory
submissions or marketing approval in the United States and European
Union, the risk that our collaborations, including the 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

(in thousands, except per share data)
(unaudited)

         

For the three months ended June
30,

For the six months ended June
30,

2018   2017 2018   2017
Revenue:
Collaboration revenue $ 7,437 $ 6,146 $ 23,045 $ 12,978
License and royalty revenue   414   10,570   763   10,570
Total revenues   7,851   16,716   23,808   23,548
Operating expenses:
Research and development 115,014 63,891 212,123 118,919
General and administrative 41,168 21,197 76,094 41,481
Cost of license and royalty revenue 21 420 36 420
Change in fair value of contingent consideration   262   (970 )   796   463
Total operating expenses   156,465   84,538   289,049   161,283
Loss from operations (148,614 ) (67,822 ) (265,241 ) (137,735 )
Interest income (expense), net 2,436 (2,242 ) 3,824 (687 )
Other income (expense), net   182   (834 )   297   (1,189 )
Loss before income taxes   (145,996 )   (70,898 )   (261,120 )   (139,611 )
Net loss $ (145,996 ) $ (70,898 ) $ (261,120 ) $ (139,611 )
Net loss per share - basic and diluted: $ (2.91 ) $ (1.73 ) $ (5.22 ) $ (3.41 )

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

  50,153   41,035   50,038   40,936
 

bluebird bio, Inc.
Condensed Consolidated Balance Sheet
Data

(in thousands)
(unaudited)

           

As of

June 30,

2018

As of

December 31,

2017

Cash, cash equivalents and marketable securities $ 1,457,243 $ 1,614,302
Total assets 1,761,511 1,900,567
Total liabilities 303,977 277,135
Total stockholders' equity 1,457,534 1,623,432
 

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