What happened

Shares of bluebird bio (NASDAQ:BLUE) were soaring 9.1% higher as of 3:13 p.m. EDT on Thursday after rising as much as 10.4% earlier in the day. The nice gain came as the overall stock market jumped on news that the Federal Reserve Board announced it would inject another $2.3 trillion into the U.S. economy. 

So what

You might think Bluebird wouldn't be impacted very much by the Fed's latest effort to prop up an economy that's reeling from the COVID-19 pandemic. After all, the company only has one commercial product, transfusion-dependent beta-thalassemia drug Zynteglo, and it's not approved in the U.S. yet. 

Gloved hands holding two test tubes

Image source: Getty Images.

Even if Zynteglo and Bluebird's other experimental gene therapies were already on the market in the U.S., their success wouldn't really depend on how strong the economy is. If the company's products are safe and effective for the rare diseases they target, they're likely to be covered by payers and prescribed by physicians.

But while it doesn't seem like the biotech stock should be impacted much by the COVID-19 outbreak, the reality is that Bluebird's share price has fallen more than most stocks have during the coronavirus-fueled market decline. That's due in part to some delays in enrollment and completion of clinical trials Bluebird is conducting.

Also, the stocks of companies that are unprofitable and that don't have solid revenue streams are viewed as riskier during uncertain times. When there are signs that the uncertainty will be lower -- as we've seen today with the Fed's moves -- stocks like Bluebird often benefit the most.

Now what

The main thing to watch with Bluebird isn't related to what the Fed does, though. Instead, investors should keep their eyes on the company's pipeline progress. In particular, the company hopes to file for U.S. and European approvals of Lenti-D in treating cerebral adrenoleukodystrophy by the end of 2020. Bluebird and its partner, Bristol Myers Squibb, also await U.S. approval of ide-cel in treating multiple myeloma.