Exclusive: SunTrust Managing Director Discusses Bluebird Bio, A Leader In Gene Therapy

The past few months have been great for small cap bluebird bio Inc BLUE, which saw its stock appreciate more than 47.6 percent in the last six months and more than 31 percent in the past month alone, largely helped by the entry of its Gen2 LentiGlobin into the clinic.

Benzinga recently had the chance to discuss the company, catalysts and the MEDIGENE AG NPV MDGEF collaboration agreement with SunTrust Robinson Humphrey Managing Director and Senior Biotechnology Analyst Edward Nash and Associate Biotechnology Analyst Mike Guo.

A Leader In Gene Therapy

“[When the company] first became public it was — and I’d say still is — one of the leaders in the gene therapy space,” which is one that has received considerable attention in recent years, Nash stated. Furthermore, over the last two to three years, several private and public companies in the arena have managed to get into the clinic, which the analyst considers surprising, given how rocky the landscape in gene therapy was a decade ago.

Related Link: Maxim Raises Target On bluebird bio From $85 To $100, Maintains Buy Rating

Bluebird, in particular, is working on Sickle cell disease and beta thalassemia, two hot areas of indications, both for the Street and the biotech sector. The combination of these two specific indications and gene therapy is what has really attracted the attention of investors, Nash added.

“Both these diseases are areas where a patient is not producing something they should be producing, and gene therapy has the ability to deliver and correct for that on a genetic level, so that potentially the patient could be permanently cured at best, and, hopefully at worst, would just have to maybe receive an additional therapy every so often, not daily, as most of them are having to do now with these types of diseases,” he clarified.

Catalysts

The American Society of Hematology (ASH) will host its widely watched annual conference in December. Talking about upcoming catalysts, Nash mentioned that bluebird will be presenting very anticipated data there, after one year without sharing any significant clinical data.

One very important question for the event is, how effective are the company’s gene therapies in preventing the patients from having to be infused with blood on a regular basis, he continued, pointing out that the initial data was “very robust.”

It should be noted that over the past year, analysts and investors gained better understanding of what to expect from bluebird’s therapies, Nash went on. We now know that “there can be some greys, meaning that there is a potential that it would not cure every patient, but still, if you can get a patient to be transfusion free for… three months, four months, five months, two years, three years… and then have to receive the therapy again, that’s still far better than having to receive transfusions on a weekly basis.”

The Medigene Agreement

Finally, Benzinga asked about bluebird’s R&D collaboration and license agreement with Medigene, which encompasses T cell receptor (TCR) immunotherapies against four specific targets.

Collaborations among smaller companies working on gene therapies are very important, much more than if we were talking about larger firms or better-understood therapy areas, Nash expounded.

“It’s definitely important for the longer term aspects, and valuation of the company, down the road. That being said, any valuation that’s going to be attributed to the company today is going to be always on indications where there has been clinical data presented.”

This does not mean collaborations of this kind are not important. Quite the opposite; they help the companies involved build a pipeline and “expertise to go out beyond other areas…” like oncology, he concluded.

SunTrust maintains a Buy rating on shares of bluebird bio.

At last check, bluebird bio was down 2.52 percent at $63.90.

Disclosures: Javier Hasse holds no interest in any of the securities or entities mentioned above.

Bluebird bio is a client of SunTrust Robinson Humphrey, Inc. and the firm has received or is entitled to receive compensation for investment banking services involving their securities within the last 12 months.

An affiliate of SunTrust Robinson Humphrey, Inc. has received compensation for non-securities services from bluebird bio within the last 12 months.

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