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Better Buy: Bellicum Pharmaceuticals, Inc. vs. bluebird bio

By Keith Speights - May 24, 2018 at 6:31AM

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Which stock wins in a head-to-head match-up between these two clinical-stage biotechs?

Bellicum Pharmaceuticals (BLCM -0.82%) and bluebird bio (BLUE 2.80%) are both clinical-stage biotechs that are developing cutting-edge therapies to treat cancer and other diseases. But the fortunes of these two biotechs have been very different over the last 12 months. Bellicum stock is down 37% during the period, while Bluebird's share price has soared more than 125%.

What do each of these biotech stocks have to offer investors now? And which is the smarter pick? Here's how Bellicum and Bluebird compare.

Scientists working together in lab

Image source: Getty Images.

The case for Bellicum

With a clinical-stage biotech like Bellicum, the investing thesis for the stock boils down to what the potential is for the company's pipeline candidates. Bellicum's lead candidate is BPX-501, a T-cell therapy that is given to patients after hematopoietic stem cell transplantation (HSCT) from another donor.

Stem cell transplants can be a lifesaver for some patients with blood cancer and other diseases, but they also come with the risk of infections and graft-versus-host disease (GvHD), where donor stem cells attack the patient's cells. BPX-501 includes T-cells that help fight blood disorders but are genetically modified with a "safety switch" that shut down the T-cells if GvHD or other complications occur.

Bellicum is evaluating BPX-501 in a phase 3 clinical study being conducted in Europe with pediatric patients undergoing HSCT. The biotech expects to report data from this study by late 2018 and plans to file for regulatory approval in Europe next year, assuming the results are positive.

In January, the FDA placed a clinical hold on Bellicum's clinical study of BPX-501 in the U.S. This clinical hold came after three cases of abnormal brain function were reported in patients taking BPX-501. However, the FDA lifted the clinical hold in April after Bellicum agreed to implement an amended study protocol for patient monitoring for potential adverse neurological events.

Bellicum's pipeline also includes three other programs. BPX-601 is a chimeric antigen receptor T-cell (CAR-T) therapy targeting solid tumors expressing prostate stem cell antigen (PSCA), which is a cancer antigen expressed in prostate, pancreatic, bladder, esophagus, and gastric cancers. BPX-701 is a T-cell receptor (TCR) therapy for treating several blood diseases. The company also has a CAR-T program targeting CD19, an antigen expressed by B-cells.

All of these other programs, though, are in early-stage clinical studies. For now, Bellicum's fortunes rest largely on BPX-501.

The biotech completed a stock offering in April that raised $69 million before commissions and other expenses. This amount combined with Bellicum's cash stockpile of $88 million at the end of Q1 should allow the company to fund operations through the end of 2019.

The case for Bluebird

How does Bluebird's pipeline stack up against Bellicum's? The biotech's lead candidate is gene therapy LentiGlobin. Bluebird plans to file for European approval of the drug in the second half of this year for treating transfusion-dependent beta-thalassemia, a rare blood disorder. 

With LentiGlobin, a functional human beta-globin gene is inserted into a patient's hematopoietic stem cells outside the body. These modified stem cells are then transplanted back into the patient's blood via infusion. 

Another promising gene therapy in Bluebird's pipeline is Lenti-D, which is being evaluated in a phase 2/3 clinical study targeting treatment of cerebral adrenoleukodystrophy (CALD), a rare genetic metabolic disorder. Lenti-D works in a similar fashion as LentiGlobin, except instead of the beta-globin gene, a functioning copy of the ABCD1 gene is inserted into stem cells.

Bluebird also claims a couple of promising CAR-T therapies targeting treatment of multiple myeloma -- bb2121 and bb21217. Celgene is partnering with the biotech on both programs. The big biotech exercised its option in March to co-market bb2121 in the U.S. and exclusively market the drug outside of the U.S., pending approval down the road.

Thanks in large part to funds received from Celgene, Bluebird is sitting pretty when it comes to cash. The biotech reported a whopping $1.57 billion in cash, cash equivalents, and marketable securities in its first-quarter update

Better buy

One of these clinical-stage biotechs is closer to potentially winning approval for its lead candidate. This same biotech also has a deeper pipeline. It claims a tight relationship with a much larger partner. And it's loaded with cash.

That biotech, obviously, is Bluebird. However, with a market cap topping $9 billion, there's a lot of growth baked into Bluebird's share price. Bellicum's market cap is less than $340 million. Good news for Bellicum should provide a bigger catalyst than Bluebird would experience.

So which is the better buy? My view is that Bluebird has the edge, even with its steep valuation. I think that LentiGlobin, Lenti-D, and bb2121 have blockbuster sales potential. Bluebird could stumble if it experiences any pipeline setbacks, but I think the stock should be a winner over the long run.

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Stocks Mentioned

bluebird bio, Inc. Stock Quote
bluebird bio, Inc.
$4.40 (2.80%) $0.12
Bellicum Pharmaceuticals, Inc. Stock Quote
Bellicum Pharmaceuticals, Inc.
$1.21 (-0.82%) $0.01

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