Bluebird Bio Stock Down as Analyst Raises Worries About Zynteglo Launch
A William Blair analyst says sales of Bluebird’s pioneering gene therapy Zynteglo could increase slowly.
Shares of Bluebird Bio were down in early trading on Monday after an analyst at William Blair downgraded the company to Market Perform from Outperform, arguing that sales of its pioneering gene therapy Zynteglo could increase slowly.
“We are taking a conservative view on the company’s transition from a development-stage company to a commercial-stage company,” William Blair analyst Raju Prasad wrote.
Zynteglo has faded into the background in recent weeks, as news has focused on Novartis A.G.’s (ticker: NVS) pioneering gene therapy, Zolgensma, which now available in the U.S. But the launch of Zynteglo, perhaps the second major gene therapy launch in history, is fast approaching.
Bluebird (BLUE) did not immediately respond to a request for comment on the downgrade.
The back story. Shares of Bluebird are up 26% so far this year, outperforming both the S&P 500, which has gained 16.4%, and the iShares Nasdaq Biotechnology ETF (IBB), which is up 9.4%. The company received approval in June from European regulators to begin selling Zynteglo, which treats the rare disease beta-thalassemia. The drug is priced at $1.8 million, making it the second-most-expensive drug in the world after Zolgensma.
What’s new. In his note on Monday, Prasad wrote that he believed the launch of Zynteglo, which will go on sale next year, will be a “slow mover.”
“While we acknowledge the disruptive nature of the company’s late-stage programs, we believe that the transition to a commercial-stage company launching first-in-class complex medicines is likely to have some challenges related to revenue growth early in the process,” Prasad wrote.
Bluebird will charge payers for Zynteglo over five years, with payments of $357,000 per year. Payments are only due if the drug remains effective.
Prasad wrote that he was taking a “wait-and-see approach” to the company’s other programs.
Shares of Bluebird fell in June after analysts determined that company wouldn’t sell the drug until early 2020.
Looking forward. Bluebird expects to start selling Zynteglo in Europe early next year, a major pivot point for the company—and a major transition. It remains to be seen whether investors have faith that the company can pull it off.
Shares were down 4.9% as of 10:15 a.m. on Monday.
Write to Josh Nathan-Kazis at firstname.lastname@example.org