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Here's Why bluebird bio Fell 21.4% in October

By Maxx Chatsko - Nov 7, 2018 at 10:32PM

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In September and October, investors thought Amgen set the bar in multiple myeloma too high, but in November bluebird bio teased promising data of its own.

What happened

Shares of bluebird bio (BLUE 2.80%) fell over 21% last month, according to data provided by S&P Global Market Intelligence. The move followed a more than 13% drop in September, which is when investors were forced to digest promising data from a drug candidate being developed by Amgen. AMG-420, competing with bluebird bio's bb21217 to become a potential late-stage treatment for multiple myeloma, was able to induce a complete response in four of five patients who had all failed to improve after receiving at least four previous treatments.

Apparently the hangover carried into to October for shares of bluebird bio. While seemingly the entire stock market took a breather last month, investors were also awaiting the company's response to Amgen in the form of updated data of its own. Investors got what they wanted in early November -- and it looks as if the difficult-to-treat cancer will become a competitive target.

A businessman wearing boxing gloves.

Image source: Getty Images.

So what

Earlier this month, in preparation for the American Society of Hematology (ASH) meeting in early December, bluebird bio released abstracts for its data presentations from across the pipeline. One abstract indicates that bb21217 induced a clinical response in six of seven patients with multiple myeloma that had received at least four prior treatments. That hints AMG-420 may not run away with the opportunity after all -- and it wasn't the only impressive abstract teasing investors.

The company reported promising results for its sickle cell disease drug candidate, which demonstrated the ability to reduce levels of the protein responsible for causing the blood disorder by 90%. And as The Motley Fool's Brian Orelli noted, the presentations at ASH next month will include even more recent data than what's discussed in the abstract submissions, so investors will be waiting to see if the drug candidates have kept up their impressive starts.

Now what

Shares of bluebird bio have bounced back since the end of October, thanks in large part to the recently published ASH abstracts. The promising results introduced in the submissions strengthened the conviction of investors that the $7 billion company has a solid pipeline with multiple shots on goal. While nothing is guaranteed in biopharma, and the science in the field moves quickly, a strong showing at ASH next month could provide confidence that the company is worth its market premium.

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