Bluebird Bio (BLUE) has had a bad year with beta-thalassemia, and the stock hasn’t done well as a result. Nonetheless, the Cambridge, Mass.-based company's most important measure is how well it does with sickle cell disease, or SCD, which is a much larger market.
According to the the U.S. Centers for Disease Control and Prevenetion, there are 100,000 Americans afflicted with SCD. Globally, there are millions of people with SCD. It is theorized that people whose ancestors originated from sub-Saharan Africa are more likely to have SCD.
Economic costs are also growing. In 2005, for example, treating SCD cost between $11,702 for children with Medicaid coverage and $14,772 for those with employer-provided insurance, per year, including at least one hospital stay. JPMorgan estimates the market to be up to $4 billion.
Bluebird has 3 trials running; one, the Northstar, with only beta-thalassemia patients, one, the HGB-205, with both SCD and beta-thalassemia patients, and lastly, HGB-206 with only SCD patients. A 13-year old SCD patient in the HGB-205 trial is said to be doing extremely well, reportedly producing 45% anti-sickling hemoglobin, 15% more than required for disease-modifying effect.
The Northstar trial has fared poorly, however, contributing to a 20% drop in the stock since November 5. Abstracts released from the upcoming ASH conference showed that 3 β0/β0 patients were not doing well, requiring transfusion. While 4 non-β0/β0 genotype patients from Northstar and 2 β0/βE genotype patients from HGB-205 have done well, the critical β0/β0 data has not been good.
So, on the flipside of this company, we have a problem with whether insurers will be willing to pay upfront for an SCD product with longer term effects. Also important is to recognize that bluebird bio’s CAR-T program is still preclinical, and now with beta-thalassemia seemingly out of the equation, it is effectively an one-pony show. Vepoloxamer, its closest competition, is only targeting a sickle cell crisis, not the disease itself.
On the positive side, bluebird bio had $707.5 million in cash and the end of the last quarter, and Oppenheimer recently raised its stake in the company by 60%. That makes this a solid long term prospect, especially if more positive results are heard on the bylines of ASH in December concerning SCD patients in the trials.
Dr. Kanak Kanti De is editor of KKD Healthcare Analysis.
