What happened
Bluebird Bio's (BLUE 4.76%) stock was down more than 14.5% on Tuesday as of 12:40 p.m., with its shares falling more than the Nasdaq's gain of close to 0.2%. The fall is likely due to a profit-taking pullback from its jump of nearly 72% a day prior, which was caused by two favorable rulings from a pair of Food and Drug Administration (FDA) advisory committee meetings held on June 9 and 10. Yesterday's jump led to the price being unsustainably high due to hype, which is attenuating sharply today as the market digests the new information.
In the meetings, the nonbinding committee unanimously found that two of the company's gene therapies, elivaldogene autotemcel for cerebral adrenoleukodystrophy (CALD) and betibeglogene autotemcel for beta thalassemia, were likely to be safe and effective.
So what
The advisory committee's rulings pave the way for Bluebird to get the final approval for commercialization of its two therapies in the U.S. when they go before the binding committee vote later this summer, likely somewhere around August 19.
That's a big deal because it will give the biotech a chance to become profitable and to generate recurring revenue from drug sales, which it largely lacks.
Now what
Bluebird's shares are still down by more than 89.3% in the last 12 months, even with the massive rally from the advisory committee votes. So the market's appraisal of the company's value is still nowhere near where it used to be.
Still, investors can look forward to another bump in Bluebird's stock price if it succeeds in getting the binding committee at the FDA to give the final stamp of approval, so today's dip doesn't signify anything that's very threatening in the long term.
