Bluebird Bio Price Target Bumped To $58 On Directional Improvements

In the biotechnology sector, Canter Fitzgerald analyst Elemer Piros increased his price target for bluebird bio Inc BLUE from $39 to $58, but he maintains an Underweight rating.

He increased the price target following the introduction of a multiple-myeloma model to his net present value calculation. The company entered in a partnership with Celgene Corporation CELG for its bb2121 multiple-myeloma drug, which should enter a pivotal trial by the end of 2017. NPV for clinical stage assets is now $1.8 billion, increased from $940 million. Piros remains cautiously optimistic about the eventual success in sickle cell disease.

The initial price for bb2121 will be $450,000, and it could be launched by 2021, said Piros. It could reach 35 percent of the 13,000 patients, achieving $2.5 billion in peak sales by 2026, added Piros.

When it comes to SCD, the market currently values it at $5 billion, but at the moment, there is little evidence to support the valuation. There are declining vector copy numbers in vivo at early time points as opposed to an increase reported in the first successful patient treated in France.

Piros estimates the market value of bluebird bio at $2.7 billion and it represents the sum of $1.8 billion NPV, $100 million for the platform and $800 million of cash.

At publication, shares of bluebird bio were up 5.18 percent at $146.30.

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