It's been a wild 12 months for biotech company Bluebird Bio (BLUE 7.03%). The gene-editing specialist initially wasn't even sure it had enough funds to complete the fiscal year, but since then, it has earned U.S. approval for two key therapies, the central reason why its shares have more than doubled in the past six months as of this writing.

In addition to the launch of its newly approved gene-editing treatments, Bluebird can count on other developments to help carry its momentum into next year. But is the small-cap biotech worth buying at current levels?

Breakthrough therapies, but with a catch

Bluebird earned approval from the U.S. Food and Drug Administration (FDA) for Zynteglo and Skysona in August and September, respectively. The former targets transfusion-dependent beta-thalassemia (TDT), a rare blood-related disorder. Skysona is a gene-editing treatment for cerebral adrenoleukodystrophy (CALD), a neurological disease that affects young children, especially boys.

These approvals were important since there aren't many effective treatment options for either illness. But their success on the market is by no means a slam dunk. First, both are extremely expensive. Zynteglo was priced at $2.8 million, while a treatment course for Skysona carries a price tag of $3 million, making them two of the most pricey therapies in the world.

Few people can afford that, and even third-party payers won't be thrilled about picking up the tab. Second, these aren't pills patients can take from the comfort of their homes. Zynteglo and Skysona both require the proper facilities and trained medical personnel to administer. Due to their exorbitant prices, Zynteglo and Skysona could be successful even with small patient populations.

Bluebird thinks it can target up to 60% of the estimated 1,500 TDT patients in the U.S. with Zynteglo, or up to 900 people. That would bring its sales to more than $2.5 billion. But it could take a while to generate this revenue, and spread out over several years, it doesn't seem nearly as impressive. In short, the approval of Skysona and Zynteglo hardly makes Bluebird a screaming buy. 

Is another one on the way?

Bluebird is working on another gene-editing therapy called lovo-cel, which targets sickle cell disease (SCD), another rare blood-related disorder. This investigational therapy has encountered its share of troubles. In December 2021, the FDA put a partial clinical hold on an ongoing clinical trial for lovo-cel -- specifically for patients under 18 -- after suspected adverse events that the agency thought may have been related to lovo-cel.

Fortunately, Bluebird announced on Dec. 19 that the FDA had lifted the partial hold. The biotech plans on submitting an application to the agency for lovo-cel in the first quarter of 2023. According to some estimates, between 70,000 to 100,000 of patients in the U.S. suffer from SCD. If lovo-cel is approved in the country, it could meaningfully improve Bluebird's revenue potential along with its prospects. 

Risk-averse investors should look elsewhere

Bluebird's portfolio of approved therapies could include Skysona, Zynteglo, and lovo-cel within a year and a half. That would give the biotech an edge compared to its gene-editing peers since many haven't managed a single approval yet, let alone three. But despite its ability to innovate, Bluebird's prospects remain somewhat fuzzy because of the complexity of its treatments.

Further, the company could face stiff competition relatively soon. Gene-editing company CRISPR Therapeutics is working with biotech giant Vertex Pharmaceuticals to develop exa-cel, a potential treatment for TDT and SCD. The two partners plan on submitting regulatory applications for exa-cel in the U.S. and Europe by the first quarter of 2023.

Regulatory approvals for this therapy could start coming down as early as September 2023. The slow rollout of Skysona and Zynteglo due to how difficult they are to administer, coupled with new treatments that will go head-to-head against two of Bluebird's therapies, could seriously hinder the company's revenue potential. That's why the biotech only has a market cap of $615 million.

And even at this price, the company looks too risky for most investors to bother purchasing its shares. Thankfully, there are plenty of other biotech stocks to consider buying.