What happened
Shares of Bluebird Bio (BLUE 1.78%) jumped 15.7% on Tuesday. The stock closed at $5.93 on Monday, then opened at $5.81 on Tuesday before rising to a high of $6.97. The stock fell a little at the close to $6.86. It is still down 31% this year and has a 52-week low of $2.87 and a 52-week high of $17.85.
So what
It was a bit of a delayed reaction that drove up the stock. The clinical-stage gene-editing company announced, after the market closed on Friday, that it had received accelerated approval from the Food and Drug Administration (FDA) for its gene therapy Skysona (elivaldogene autotemcel) to slow the progression of early, active cerebral adrenoleukodystrophy (CALD) in boys ages 4 to 17. CALD is a rare genetic neurological disease that affects only 1 in 20,000 males, according to the Child Neurology Foundation. Females are generally only carriers of the condition. While the potential patient base for the therapy is small, Bluebird has said it plans to charge up to $3 million for each treatment, which would make it the most expensive therapy in the world.
Interestingly, after opening at $6.63 on Monday ($0.29 higher than its close on Friday), the stock then fell, closing at $5.93, perhaps because investors saw the opportunity to get rid of their shares on positive news. On Tuesday, however, it rallied after analysts upgraded their positions with the stock.
This is the second approval in as many months for the biotech company. In August, the FDA approved Zynteglo (betibeglogene autotemcel), a gene therapy to treat patients who require red blood cell transfusions because they have beta thalassemia, a rare genetic blood disorder. The company now seems to have some momentum, though it is important to note that Zynteglo also has a small potential patient base of only around 5,000 people in the United States, according to the National Center for Advancing Translational Sciences, and a hefty price tag of $2.8 million per dose, which had held the old record for most expensive treatment.
Now what
The second approval is clearly a game changer for Bluebird. It is sorely in need of cash to continue its business. The company said it hopes to begin treating patients with its new therapies later this year, so that could change quickly. In the second quarter, it reported cash of $218 million. It did have revenue of $1.5 million in the quarter, up from just $100,000 in the same period last year. However, the company isn't profitable and lost $100.1 million in the quarter.
