The fast-moving gene therapy biotech company bluebird bio (NASDAQ:BLUE) wants investors to know a few things. At a key industry conference this week, the company's management unveiled a blueprint for success that includes filing for Food and Drug Administration approval of three different therapies next year. Can that rosy outlook lift this high-flying stock even higher?

Gene therapy -- it's where it's at

2017 could go down in history as the year that gene therapy went big-time. Research into medicine that can tinker with our genetic code has been going on for years, but FDA approvals last year for two cancer gene therapies and one vision-restoring gene therapy demonstrate that this approach is moving from research labs to doctor toolboxes.

A person in a white lab coat pointing at a double helix.

IMAGE SOURCE: GETTY IMAGES.

The validation of this approach suggests that bluebird bio could be in a perfect position to ride a wave of rising demand for these treatments because it boasts one of the most comprehensive gene therapy research pipelines.

What management's saying

The company's bb2121 caught a lot of investors' attention last year after management reported better than 90% response rates in heavily pretreated multiple myeloma patients.

The therapy, which is licensed to Celgene Corp. (NASDAQ:CELG), reengineers a patient's T-cells so that they can spot the BCMA protein that's expressed by multiple myeloma cells. It's being studied in a pivotal trial, and if that trial confirms its efficacy, then plans are to get an application to regulators as soon as next year. Assuming everything goes off without a hitch, an approval could clear the way to blockbuster sales.

Celgene is already the market share Goliath in multiple myeloma treatment, generating over $10 billion in annualized sales in the indication. Its Revlimid is the top-selling first-line therapy and its Pomalyst is a fast-growing third-line therapy. If bb2121 gets the nod, there's no partner better than Celgene to position it to win market share in the fourth-line setting.

In addition to bb2121, bluebird bio thinks it has a shot at sending applications to the FDA for two other drugs: LentiGlobin and Lenti-D. It hopes to file for approval of LentiGlobin by the end of this year for use in beta thalassemia patients, as well as for Lenti-D for the treatment of cerebral adrenoleukodystrophy in 2019.

Beta thalassemia is an inherited blood disease caused by a fault in the gene responsible for making beta globin. It can cause severe anemia and it's one of the most common genetic diseases in the world. There are about 60,000 children born with the severe form of it every year, including 1,500 per year who are born in the United States.

Most patients with severe disease require lifelong blood transfusions. However, those transfusions can cause too much iron to build up in the body, which can damage organs.

LentiGlobin may remove the need for transfusions or bone marrow transplants by inserting a functional human beta globin gene, restoring the ability to produce red blood cells.

Adrenoleukodystrophy is a rare X-linked metabolic disorder caused by mutations in the ABCD1 gene that results in a deficiency in the adrenoleukodystrophy protein. It can cause a buildup of very long chain fatty acids, and in patients with the most severe form of the disease, cerebral ALD (CALD), that can destroy myelin, which can eventually lead to death.

Lenti-D may address CALD by inserting a functioning copy of the ABCD1 gene into the patient's own stem cells.

What's next for this stock

This is going to be an important year and a half for bluebird bio. Data from its bb2121, LentiGlobin, and Lenti-D programs will determine if it can achieve its target of three FDA filings next year, so investors will want to watch closely. If studies are successful, then each of these drugs could quickly deliver nine figures in annual sales, and over time, each could have 10-figure peak sales potential.

This is still a clinical-stage company, however, so there's plenty of risks associated with buying shares. Investors have already driven share prices to new highs on optimism, so disappointment in these trials would likely cause a big drop in market cap. Nevertheless, I believe that gene therapy will revolutionize treatment for many diseases, and bluebird bio is one of the best gene therapy stocks investors can buy.

 

Todd Campbell owns shares of Celgene. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Bluebird Bio and Celgene. The Motley Fool has a disclosure policy.