Bluebird Bio (NASDAQ: BLUE) said its planned acquisition by two investment firms is, according to its board, “in the best interest of stockholders”—but enough of them felt otherwise on Friday to have sent the company’s shares plummeting 42%.
The beleaguered gene therapy developer said Friday it had entered into a definitive agreement to be acquired by funds managed by Carlyle (NASDAQ: CG) and privately-held SK Capital Partners, partnering with a team of veteran biotech executives led by a familiar name with a long resume: David Meek is set to become CEO of the newly-private Bluebird nearly two years after he left Mirati Therapeutics, where he spent two years as CEO before the company’s up-to-$5.8 billion acquisition by Bristol Myers Squibb (BMS; NYSE: BMY), a deal completed in January 2024.
The investment firms are promising to give Bluebird primary capital to scale up commercial delivery of its three gene therapies, each designed to treat sickle cell disease, β-thalassemia, and cerebral adrenoleukodystrophy (CALD).
Bluebird agreed to sell itself to Carlyle and SK Capital for up to $9.84 a share consisting of $3 a share, plus a contingent value right (CVR) per share of $6.84 cash if Bluebird’s current portfolio of three FDA-approved gene therapies attains more than $600 million in total sales in any 12-month period before December 2027.
All that adds up to a deal valued at just over $29 million—less than half (43%) of Bluebird’s roughly $68 million market capitalization (the product of the share price and the number of outstanding shares) before the buyout was announced.
“Given that [B]luebird was reaching the end of its cash runway, unlikely to achieve near-term profitability from its ongoing commercial launches, and at risk of defaulting on its loan covenants, the transition away from the public markets was likely inevitable,” Sami Corwin, PhD, an analyst with William Blair, wrote Friday in a research note. “However, the upfront acquisition price is a 57% discount to the stock’s closing price on the day prior ($7.04), which has led to the stock trading down 40% during market hours.”
Corwin and William Blair have modeled total net sales of $282.9 million for 2025, $409.4 million for 2026, and $546.4 million for 2027.
“Therefore, we believe that the probability of achieving the CVR contingency is low,” Corwin added.
Low patient uptake
Like other developers of recently approved gene therapies, Bluebird has been slow to generate demand for its products. That reflects challenges in securing reimbursement from payers stemming from the therapies’ high list prices (Bluebird, like other gene therapy developers, assists patients seeking its treatments).
As of the third quarter, Bluebird said that it had achieved only 57 patient starts of treatment for its three marketed gene therapies:
- 35 starts for Zynteglo
(betibeglogene autotemcel or beti-cel)—Indicated to treat adults and children with β-thalassemia who require regular red blood cell transfusions ($2.8 million list price) - 17 starts for Lyfgenia (lovotibeglogene autotemcel or lovo-cel)—Indicated to treat patients 12 years of age or older with sickle cell disease and a history of vaso-occlusive events ($3.1 million list price)
- Five starts for Skysona (elivaldogene autotemcel or eli-cel)—Indicated to slow the progression of neurologic dysfunction in boys 4–17 years old with early, active CALD ($3 million list price)
Bluebird is not alone in facing slow patient uptake.
On Friday, Pfizer (NYSE: PFE) said it would halt further development and commercialization activity for Beqvez (fidanacogene elaparvovec-dzkt), less than a year after winning FDA approval for the hemophilia B gene therapy, citing lower than anticipated demand from patients and their physicians. Since the FDA authorized the gene therapy last April, no patients were reported to have received Beqvez, which carried a list price of $3.5 million—the same as the hemophilia B gene therapy Hemgenix® (etranacogene dezaparvovec-drlb), co-developed by CSL (ASX: CSL) and uniQure (NASDAQ: QURE).
The Pfizer decision reflects a continued retreat from gene therapy for the pharma giant. Last month, Pfizer rang in 2025 by terminating its global collaboration and license agreement with Sangamo Therapeutics (NASDAQ: SGMO) to co-develop giroctocogene fitelparvovec, a gene therapy candidate to treat adults with moderately severe to severe hemophilia A—despite the drug generating positive results last year in the Phase III AFFINE trial (NCT04370054).
Vertex Pharmaceuticals (NASDAQ: VRTX) during Q3 recorded its first product revenue from the first commercial patient infused with Casgevy® (exagamglogene autotemcel), the CRISPR-edited therapy it co-developed with CRISPR Therapeutics (NASDAQ: CRSP). Vertex reported $2 million in Casgevy revenue, which Vertex included within its $2.772 billion in product revenue for the quarter.
Casgevy, which carries a $2.2 million list price, won FDA approval in December 2023 to treat sickle cell disease, and a month later received agency authorization to treat transfusion-dependent beta thalassemia in patients 12 years and older. As of mid-October, 45 of the planned 75 authorized treatment centers (ATCs) have been activated in all regions of the world where Casgevy has been approved—the United States, the European Union, Great Britain, Saudi Arabia, Bahrain, Canada, and Switzerland.
Low buyout price
J.P. Morgan analyst Eric Joseph and three colleagues also noted that the buyout price was low enough to have sparked the investor selloff, with the firm having previously projected Bluebird wouldn’t attain more than $600 million in sales until 2029.
“With BLUE closing yesterday at $7.04, we anticipate shares to react negatively on this announcement, with the Street heavily discounting receipt of the CVR,” Joseph and colleagues wrote Friday in a research note. Joseph maintained the firm’s “Underweight” rating on Bluebird shares.
The J.P. Morgan analysts also highlighted one positive aspect of the Bluebird buyout. As part of the deal, the company was allowed to amend its loan agreement with Hercules Capital to maintain adequate operating capital—a bit of good news for Bluebird, which in November reported having cash, cash equivalents, and restricted cash of approximately $118.7 million, (of which about $48 million was restricted cash) as of September 30, 2024—enough to fund operations only into the first quarter of this year.
Bluebird secured a $175 million loan from Hercules in March 2024, then drew the first $75 million, agreeing to hold off accessing the remaining $100 million pending achievement of commercial milestones.
Investors, however, were in a less forgiving mood, sending Bluebird shares nosediving 43% to $4.004 a share at the start of premarket trading at 8 a.m. ET Friday. The stock rebounded 41% to $5.65 at the opening bell before tumbling 29% to the $4 low at 10:07 a.m. ET. Bluebird shares closed Friday at $4.08.
“Worth noting that Bluebird is selling itself for a fraction of the $80M former CEO Nick Leschly made from selling Bluebird stock,” CNBC pharma reporter Angelica Peebles wrote Friday on X.
Leschly served as Bluebird’s CEO or “chief Bluebird” from 2010, when the company changed its name from Genetix Pharmaceuticals, to 2021, when he oversaw Bluebird’s 2021 spin-out of its oncology business into 2Seventy bio, a company that Leschly initially helmed as CEO, and still oversees as chairman.
The spin-out left Bluebird with Zynteglo, Lyfgenia, and Skysona—all autologous hematopoietic stem cell-based gene therapies for severe genetic diseases that won FDA approval under Leschly’s successor Andrew Obenshain.
“Now that we’re split, we have an ability just to focus on our mission, which is getting these three products to our patients,” Obenshain told GEN Edge in 2021. “What we have now is zero distractions. We have a laser focus on launching our three transformational products. We’ve allocated all of our capital and management attention to our most important priorities, and those most important priorities are in severe genetic disease.”
Financial woes, job cuts
But for all of Obenshain’s success in leading Bluebird to bring the three gene therapies to market, Obenshain could not reverse Bluebird’s financial woes despite several moves that included restructurings with job cuts: In 2022, Bluebird eliminated about 30% of its staff (an estimated 155 jobs), aiming to generate $160 million in savings over the following two years. Last September, Bluebird chopped 25% of its workforce—94 employees—in a restructuring designed to cut its cash operating expenses by 20% and enable it to break even on cash flow in the second half of 2025. In December, Bluebird carried out a 1-for-20 reverse stock split to avoid being delisted from NASDAQ.
Bluebird finished the third quarter of last year with $60.808 million net loss, somewhat improved from the $87.232 million net loss of Q3 2023. The company saw its total revenue fall 14% year over year during Q3 of this year, from $12.392 million to $10.612 million, a decline Bluebird blamed on quarter-to-quarter variability in drug product infusions. However, total revenues more than doubled during Q1–Q3 2024 compared with January–September 2023, from $21.663 million to $45.286 million.
Two of Bluebird’s three marketed gene therapies saw year-over-year product revenue gains. Zynteglo rose 13% from $4.851 million to $5.493 million in Q3 and nearly quadrupled, zooming 290% from $9.031 million to $35.212 million in January–September 2024. Lyfgenia racked up $2.632 million during the third quarter, its first quarter of generating sales.
However, Skysona product revenue fell two-thirds (66.5%) to $2.487 million in the third quarter of 2024 from $7.43 million in the year-ago quarter. During Q1–Q3 2024, product revenue tumbled 40% to $7.43 million from $12.383 million a year earlier.
“As our financial challenges mounted, it became clear that securing the right strategic partner was critical to maximizing value for our stockholders and ensuring the long-term future of our therapies. After an extensive review process, this acquisition represents the best path forward—maximizing value for stockholders and bringing significant capital, commercial expertise, and a commitment to provide more patients the opportunity to benefit from potentially transformative gene therapies.”
Peebles’ post on X offered one of two additional likely reasons for the investor wrath Bluebird incurred. The other is a sense of opportunities lost by the company.
“Bitter end”
“I remember how loved this company [Bluebird] was back in the CAR-T days when I watched my Kite and Juno get bought out. I suspect they would have been acquired long ago but said no. Now they sell themselves for -99% of what they were back then,” @Biotech2k, a “Biotech investor for over two decades,” lamented on X. “What a bitter end to a long disastrous company.”
Kite Therapeutics was acquired by Gilead Sciences (NASDAQ: GILD) for $11.9 billion in a deal completed in October 2017. Three months later, Juno Therapeutics found a buyer in Celgene, which shelled out $9 billion for the company in a deal that closed in March 2018. A year later, Celgene itself was acquired for $74 billion by BMS, a deal completed in November 2019.
In a career stretching nearly four decades Meek, Bluebird’s incoming CEO, held executive positions at Janssen Pharmaceutical Cos. of Johnson & Johnson, Novartis, Endocyte, and Baxalta before serving as CEO of Ipsen, FerGene—and Mirati, where he oversaw the U.S. launch of KRAS inhibitor Krazati® (adagrasib). Shortly before BMS acquired Mirati, he left the company by mutual agreement with its board after the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended rejection of Krazati, contending that its data was weaker than that of Amgen’s Lumykras (sotorasib).
Meek was elected chairman of rare disease drug developer Swedish Orphan Biovitrum (Sobi) in December.
In Bluebird’s statement announcing the buyout, Meek said the planned investment by Carlyle and SK Capital will bring to the company the capital and commercial capabilities it needs to bring Bluebird’s gene therapies to more patients, more quickly—and make some positive history for the gene therapy pioneer.
“[B]luebird is built on an extraordinary legacy of scientific breakthroughs, and we are committed to unlocking its full potential for patients,” Meek stated.
Leaders and laggards
- Acelyrin (NASDAQ: SLRN) shares rose 20% from $2.17 to $2.60 Friday after the company confirmed receipt of an unsolicited indication of interest from Concentra Biosciences to acquire all of Acelyrin’s outstanding shares for $3 per share cash, plus a contingent value right that represents the right to receive 80% of the net proceeds from any out-license or disposition of Acelyrin’s development programs or intellectual property. Concerta’s controlling shareholder is Tang Capital Partners, a life sciences-focused investment company headed by Kevin Tang. The offer came two weeks after Acelyrun announced an agreement to merge with Alumis (NASDAQ: ALMS) in an all-stock transaction expected to close in the second quarter, subject to approval by shareholders of both companies and other customary closing conditions. The Alumis merger would create a combined company with $737 million in pro forma cash plus three candidates in clinical trials.
- CNS Pharmaceuticals (NASDAQ: CNSP) shares skidded 41% from 14 cents to 8 cents Wednesday after the developer of treatments for primary and metastatic cancers in the brain and central nervous system announced a 1-for-50 reverse stock split that took effect Friday. CNS said the reverse stock split was primarily intended to bring it into compliance with Nasdaq’s $1 minimum per-share price listing requirement. CNS shares will continue to trade on the Nasdaq Capital Market under the symbol CNSP, but under a new CUSIP number, 18978H409.
- FibroGen (NASDAQ: FGEN) shares soared 37.5% from 56 cents to 77 cents Thursday after the company said it was selling its China subsidiary to AstraZeneca (London Stock Exchange: AZN) for approximately $160 million. Through the deal, AstraZeneca secured all Chinese rights to roxadustat, a treatment for anemia in chronic kidney disease with a pending regulatory decision for chemotherapy-induced anemia. FibroGen said the deal will extend its cash runway into 2027 and enable it to continue advancing clinical development programs for FG-3246, a first-in-class, CD46 targeting antibody drug conjugate, and FG-3180, a companion PET imaging agent, in metastatic castration-resistant prostate cancer. FibroGen will receive from AstraZeneca $85 million plus its net cash held in China at closing, now estimated to be approximately $75 million.
- Septerna (NASDAQ: SEPN) shares plummeted 47% from $12.96 to $6.87 Tuesday after the company acknowledged that it was halting the Phase I single- and multiple-ascending dose (SAD/MAD) trial assessing lead candidate SEP-786—an oral small molecule PTH1R agonist for hypoparathyroidism—in healthy volunteers. The company disclosed two unanticipated severe (Grade 3) events of elevated unconjugated bilirubin in the trial’s MAD portion, both without elevations in ALT, AST, and GGT liver enzyme levels. Dosing was ended for both study participants, and the bilirubin elevations were reversible. No events of liver injury, cholestasis, or hemolysis had occurred to any participants, and no serious adverse events (SAEs) took place in the study, Septerna said. “We have multiple attractive PTH1R agonists from which we plan to select a next-generation candidate to accelerate toward the clinic later this year to quickly regain momentum with our PTH1R program,” stated Jeffrey Finer, MD, PhD, Septerna’s CEO and co-founder.
- Solid Biosciences (NASDAQ: SLDB) shares climbed 31.5% from $4.03 to $5.30 Tuesday after the company announced positive initial data from the Phase I/II INSPIRE DUCHENNE trial (NCT06138639) evaluating SGT-003, a next-generation gene therapy candidate. Interim 90-day biopsy data reported in the first three participants showed an average microdystrophin expression of 110%, as measured by western blot, and improvements in multiple biomarkers that indicated muscle health and resilience. “In mid-2025, we plan to request a meeting with the FDA to discuss the potential for an accelerated approval regulatory pathway for SGT-003,” Solid’s president and CEO Bo Cumbo said.
The post StockWatch: Bluebird Bio Plunges on Buyout, as Gene Therapy’s Woes Grow appeared first on GEN – Genetic Engineering and Biotechnology News.
