Shares of bluebird bio (BLUE 3.80%) fell over 13% last month, according to data provided by S&P Global Market Intelligence. After rising for all of 2017 and earning a market cap as high as $10 billion earlier this year, investors are beginning to lose enthusiasm for the company's approach to developing living medicines. While the biopharma and its partner Celgene have a promising pipeline of drugs, the swift pace of innovation in biopharma may reduce the market potential quicker than analysts previously expected.
Investors are beginning to wonder if bluebird bio is at risk of losing market share before it really even begins life as a commercial company. The latest example: In September Amgen (AMGN 0.87%) released promising preliminary data from a small ongoing phase 1 trial, investigating a new immunotherapy as a potential treatment for advanced multiple myeloma. While the initial data release included just five patients, all had failed to respond to between four and six previous treatments. Amgen's drug, AMG-420, a "simpler" immunotherapy compared to the cellular therapies being developed by bluebird bio and Celgene, resulted in a complete remission in four of them. That's very impressive.
That also has investors wondering what might happen to bluebird bio's bb2121, which was slated to become the go-to treatment for late-stage multiple myeloma and perhaps even become an earlier-stage treatment. If AMG-420 continues to impress once the ongoing phase 1 trial wraps up, then it's likely to earn Breakthrough Therapy designation, which would significantly accelerate its development. If the drug continues to impress in mid- and late-stage trials, then it could hit the market and push all competitors out of the way.
It's still very early for AMG-420, and investors can't draw too many conclusions from preliminary data in just five patients. But with bluebird bio's entire pipeline -- for sickle-cell disease and beta thalassemia -- facing competition from novel immunotherapies such as T-cell engineering and CRISPR gene editing, celebrations for future victories in the clinic or regulatory meetings could prove to be short-lived. The swift pace of innovation is great news for patients, but investors need to do their homework to ensure that the cutting-edge science from five or 10 years ago isn't rendered obsolete in the next few years.