Bluebird Bio's Near-Term Product Launches Pose Risks, Wedbush Says In Downgrade

Bluebird bio Inc BLUE held its Analyst Day in New York last week, and at least one analyst came away less bullish on the stock.

The Analyst

Wedbush's David Nierengarten downgraded bluebird bio from Outperform to Neutral and reduced his price target from $166 to $131.

The Thesis

The risks to bluebird bio's Zynteglo, a gene therapy candidate for beta-thalassaemia, overshadow its broad pipeline, Nierengarten said in a Wednesday note.

The analyst noted the company spelled out its commercial strategy for the pipeline asset in transfusion-dependent beta-thalassemia, with a limited launch planned in the EU4 countries at a value-based payment over time pricing model.

Nierengarten estimates installment, performance-based pricing of $320,000 per year, in line with the annual treatment costs for five years of $1.6 million, and allowing a 15 percent discount for patients not fully responding to performance requirements.

Even if the company sells receivables or issue debt against the expected revenue stream, these actions will only serve to reduce the economic returns per patient, the analyst added.

Nierengarten also sees risks to the initial launch metrics for bluebird bio's bb2121 in multiple myeloma.

"BLUE has an impressively broad pipeline, and we believe sources of future value, but ones that are unlikely to "move the needle" in the near-term with the two product launches likely to be top of investors' minds," the analyst wrote in the note.

Price Action

Bluebird bio shares were down 1.4 percent to $124.89 Wednesday afternoon.

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