Clinical-stage gene therapy specialist bluebird bio (NASDAQ:BLUE) reported second-quarter earnings last week, which mostly just served as a reminder of its pipeline progress because revenue and earnings are essentially meaningless at this point for the biotech company.

For the record, Bluebird lost $70.9 million, which was more than the $58.8 million it lost in the year-ago quarter, mostly because of increased research and development expenses as its pipeline treatment candidates advance. Fortunately, after raising additional cash, Bluebird has a nice cushion, even at the higher burn rate.

Normal and sickled red blood cells

Image source: Getty Images.

Bluebird results: The only number that really matters


June 30, 2017

Dec. 31, 2016


Cash, cash equivalents, and marketable securities 

$1.2 billion

$884.8 million

$312.2 million

Data source: Bluebird.

What happened this quarter?

  • The best data presented came from BB2121, the CAR-T therapy Bluebird's  is developing with Celgene (NASDAQ:CELG). At the American Society of Clinical Oncology (ASCO) meeting, data showed that the treatment produced an objective response in all 15 multiple myeloma patients that could be evaluated, with 27% of the patients having a complete response.
  • Data from the phase 3 Northstar-2 trial, testing its LentiGlobin gene therapy in transfusion-dependent beta-thalassemia (TDT) using the new manufacturing procedure was more mixed. Results presented at the European Hematology Association (EHA) meeting showed some patients who appeared cured of their disease, while it wasn't clear that others were faring quite as well.
  • The results for LentiGlobin in sickle cell disease (SCD) were also mixed, although the treatments being used in that study were prepared with an older manufacturing procedure, so it's hard to read much into it.
  • Bluebird's Lenti-D gene therapy appears to be working: 88% of cerebral adrenoleukodystrophy patients in initial study cohort remained free of major functional disabilities after two years.
  • In June, Bluebird raised almost $437 million in a secondary offering. The company thinks its funds on hand are now sufficient to get it into 2020.

What management had to say

Nick Leschly, who goes by the title chief bluebird, highlighted what investors can expect at the American Society of Hematology (ASH) meeting in December: "We look forward to sharing more of our progress later this year at ASH, where we will provide updated data on our TDT and multiple myeloma programs, as well as a first look at the progress made in the HGB-206 study in severe SCD with changes in the study protocol."

Looking forward

As Leschly noted, ASH should be a bigger event for Bluebird than it was last year. The sickle cell data with the new manufacturing protocol will be the most important, given the size of its market relative to that of TDT, but there may not be enough patients treated by that point to know definitively whether the treatment works in SCD.

Look for details from Bluebird and Celgene about how they plan to get bb2121 approved. On Celgene's earnings call, Michael Pehl, Celgene's president of hematology and oncology, said that after they treat a few more patients in the phase 1 trial, the companies can "go right into a pivotal program" -- industry-speak for a clinical trial that the FDA would accept for approval. It seems likely the companies would run a phase 2 trial to try and get accelerated approval, but it could mean going straight into a phase 3 for a standard approval, which would take longer, but could result in getting approved to treat more patients.

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