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Why bluebird bio Stock Is Plunging Today

By Prosper Junior Bakiny - Feb 16, 2021 at 1:13PM

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The company had to halt one of its clinical studies following a suspected severe adverse reaction.

What happened?

On Tuesday morning, gene therapy specialist bluebird bio (BLUE -5.83%) announced the temporary suspension of two of its clinical trials for LentiGlobin, an experimental gene therapy for sickle cell disease (SCD). Shares of the biotech company are falling off a cliff as a result and are down by 34.8% as of 1:01 p.m. EST. 

So what

SCD is a rare and potentially deadly group of blood-related disorders for which there are few treatment options. Bluebird was investigating LentiGlobin as a potential treatment for SCD in a phase 1/2 study and a separate phase 3 clinical trial. However, the company learned that a patient treated more than five years ago in one of these clinical studies has contracted acute myeloid leukemia (AML, a cancer of the blood and bone marrow). It isn't clear whether the patient became ill as a result of being treated with LentiGlobin, but following protocol, Bluebird decided to put these studies on pause while it investigates if the gene therapy is to blame.

Nick Leschly, CEO of Bluebird, said, "The safety of every patient who has participated in our studies or is treated with our gene therapies is the utmost priority for us. We are committed to fully assessing these cases in partnership with the healthcare providers supporting our clinical studies and appropriate regulatory agencies. Our thoughts are with these patients and their families during this time."

Bluebird's Zynteglo, a treatment for transfusion-dependent beta-thalassemia marketed in Europe, is manufactured using the same lentiviral vector (a virus carrying parts of the genetic code of an organism) as LentiGlobin. Out of an abundance of caution, the company also decided to halt the marketing of Zynteglo in Europe, although no cases of cancer have been reported in patients treated with it.

Now what

The market does not like uncertainty, which explains why Bluebird's shares are plunging today. Sure, the company's investigation could uncover that LentiGlobin is not associated with a higher risk of cancer, but no one knows how long the inquiry will last or what its findings will be. Given these factors, it might be best to stay away from this biotech stock for now. 

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