What happened
Shares of the gene therapy pioneer Bluebird Bio (BLUE -6.36%) have been under heavy pressure this week. The biotech's stock dropped by a noteworthy 28.8% during the first three and a half days of trading this week, according to data provided by S&P Global Market Intelligence.
The big loss came after Bluebird reported 2022 fourth-quarter and full-year financial results Wednesday. Investors hit the exits after the company revealed that it may miss the first-quarter submission goal for lovo-cel's Biologics License Application (BLA) to the Food and Drug Administration (FDA). Lovo-cel is an experimental gene therapy in development for the rare blood disorder sickle cell disease.
So what
In the accompanying conference call, bluebird's CEO Andrew Obenshain noted that a slight delay in this highly anticipated BLA submission shouldn't impact the company's stated goal of launching lovo-cel in early 2024. Investors, though, aren't giving the company the benefit of the doubt due to the biotech's razor-thin margin for error.
Bluebird stated in yesterday's earnings report that its cash runway ought to last until the fourth quarter of 2024. As lovo-cel is arguably the company's most valuable product candidate, this therapy will likely need to get off to a blistering start in order to stave off additional public offerings.
Now what
Is Bluebird stock a buy on this weakness? Under normal circumstances, a slight regulatory delay for a biotech wouldn't be a big deal. However, investors have shown little patience for any type of miscue when it comes to early commercial-stage biotech companies of late. Hence, it might be best to watch this story unfold from the safety of the sidelines for now.
