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What happened

bluebird bio (NASDAQ:BLUE) is down 12% at 12:21 p.m. EDT after abstracts for next month's American Society of Hematology (ASH) meeting were released this morning. The biotech also released earnings yesterday afternoon, but as a development-stage biotech, it had no product sales to report.

So what

Bluebird's gene therapy LentiGlobin is being tested in two different diseases: beta thalassemia, which is caused by a variety of genetic mutations, and sickle-cell disease.

Patients with easier-to-treat mutations -- those who have something other than beta-zero/beta-zero -- have discontinued transfusions and remain free of transfusions as of the abstract data cutoff a few months ago. Patients with beta-zero/beta-zero aren't cured, but the volume of transfusions they require has dropped by a median of 60% compared to pre-treatment levels.

For sickle cell disease, the one patient who was previously reported as a responder continues to do well with "no clinical symptoms or complications" for the 18 months post-treatment the patient has been followed. In a subsequent trial, seven patients with sickle-cell disease don't appear to be cured by the gene therapy. Three of the four patients who have been followed for at least six months have experienced fewer vaso-occlusive crisis episodes than before the treatment, but the authors point out that "this trend may be confounded by the short follow-up" as well as other issues associated with the treatment.

Now what

It appears investors are mostly disappointed with the sickle-cell disease data. At ASH last year, Bluebird presented data on the first two patients in the second trial, which suggested that curing sickle-cell disease wasn't going to be easy. Now with data on five more uncured patients, we know that's the case.

But Bluebird has already announced a new manufacturing process that increases the average number of copies of the beta-globin gene, which should increase expression and hopefully increase the cure rate of the beta-zero/beta-zero beta thalassemia patients and sickle-cell patients. All the clinical data to be presented at ASH is from the old manufacturing process, so while it's technically bad news, Bluebird had already telegraphed there was an issue and has a plan to fix it.

Unfortunately, like most things in biotech, the fix is going to take time, with the first trial using the new manufacturing process having just opened in September.

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