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5 Reasons bluebird bio Inc. Took Flight Today

By Brian Orelli, PhD – Jul 27, 2016 at 5:41PM

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No direct news for the biotech, but these seem to have added up to a big one-day gain.

Image source: Getty Images.

What: bluebird bio (BLUE 0.93%) ended up 11.2% on no direct news about the company.

So what: While there were no press releases announcing data to be seen, here are a few items that probably contributed to the double-digit gain:

  • A Wells Fargo analyst issued a note pointing to upcoming catalysts, including presentations at the American Society of Hematology (ASH) meeting in December.
  • While ASH isn't until December, abstracts for the meeting will be available on Nov. 3, which isn't too far off.
  • BioMarin Pharmaceuticals presented promising data for its hemophilia gene therapy treatment today. bluebird bio's gene therapy treats other diseases, but given gene therapy's checkered past and Bluebird's struggles, BioMarin's data may be giving investors confidence that Bluebird can fix its expression issues.
  • There have been a couple of recent biotech acquisitions. For example, Laboratory Corporation of America announced today the acquisition of Sequenom for a 182% premium. Investors may be thinking bluebird bio is a potential takeout target, especially at this knocked-down price.
  • It's a biotech; double-digit moves based on the sentiment of day traders are common.

Now what: Bluebird's stock has recovered quite a bit off its lows earlier this year, but to get back to its glory days, investors will need to be convinced that it can consistently produce expression high enough to cure patients with sickle cell disease.

Alternatively, successful data from its CAR-T cancer therapy, bb2121, would increase the company's valuation, although the phase 1 trial was only started recently, so definitive proof-of-concept data will be a while in coming.

Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends BioMarin Pharmaceutical and bluebird bio. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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