What happened
Shares of gene therapy company Bluebird Bio (BLUE -4.91%) were up by a healthy 12.4% on heavy volume as of 11:16 a.m. ET Friday morning. The biotech's stock appears to be getting a boost from both a broad upward trend across the biotechnology space today, as well as from rumors circulating on social media about a possible buyout.
So what
Bluebird has repeatedly been floated as a possible buyout target by investors this year. Three key issues seem to be fueling this speculation:
- Bluebird scored two approvals from the Food and Drug Administration (FDA) earlier this year for its one-and-done gene therapies: Skysona for cerebral adrenoleukodystrophy (CALD) and Zynteglo for transfusion-dependent beta-thalassemia (TDT).
- Bluebird isn't on the soundest of financial footings at the moment. A buyout would thus ensure that these newly approved gene therapies get a proper commercial launch.
- Big pharma has shown a keen interest in buying financially stressed drugmakers with compelling assets all year long. Bluebird, for its part, appears to fit this description to a T.
All that being said, these buyout rumors are not based on any reputable news pieces. Investors, in turn, probably shouldn't put much stock into this speculation.
Now what
Is Bluebird's stock a buy right now? Investors arguably should never buy shares of a biotech purely for its potential as a buyout play. After all, buyouts are exceedingly hard to predict in the biopharmaceutical industry. A buy decision on this stock should thus come down to your view of the company's commercial prospects in CALD and TDT, as well as its ability to financially support a pair of rather unique product launches.
