Cautious Optimism For Bluebird Bio's Sickle Cell Therapy: Analyst Sees Financial Challenges

Cantor Fitzgerald initiated coverage on Bluebird Bio Inc BLUE, saying sickle cell disorder (SCD) has been a hotbed of development for genetic medicines as the company's lovo-cel marches towards the U.S. market. 

Along with lovo-cel, Vertex Pharmaceuticals Inc/CRISPR Therapeutics AG's CRSP sickle cell candidate exa-cel also has PDUFA dates in December.

The analyst initiated a Neutral rating and said lovo-cel serves a much larger market than is addressable by Bluebird Bio's two other gene therapies (Zynteglo and Skysona), but Bluebird Bio's financial outlook appears uncertain.

The opportunities for Zynteglo in β-thalassemia and Skysona in CALD are modest (over $100 million in aggregate), and the company has a sizeable expense infrastructure with a limited cash runway.

Analysts Eric Schmidt and Rick Bienkowski wrote that exa-cel is likely to emerge as the leading cell therapy for SCD largely due to VRTX's significant resource commitment. 

BLUE's lovo-cel was more similar than different in terms of clinical profile but may be restricted by more limited commercial support. 

Cell therapies face multiple barriers to penetrating the SCD market, and BLUE's resource constraints could place lovo-cel at a competitive disadvantage.

Cantor's 2024-2027 lovo-cel sales estimates were below consensus, and stated DCF suggested BLUE shares are fairly valued.

BLUE Price Action: Bluebird Bio shares are up 1.96% at $2.85 on the last check Tuesday.

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