Last year was an important one for Bluebird Bio (BLUE -1.31%) as the biotech company earned two key regulatory approvals in the U.S. Despite these wins, the market has hardly rewarded the gene-editing specialist; its shares are down 39% in the past year, and Bluebird's market capitalization is currently just $323 million.

This biotech could have massive upside if its master plan for the rest of the year and beyond comes to fruition. But should investors consider adding shares of Bluebird to their portfolios today? Let's find out.

The rollout of key gene-editing therapies

Bluebird focuses on developing medicines for rare diseases. The company's newly approved therapies are Zynteglo, which targets transfusion-dependent beta-thalassemia (TDT, a rare blood disorder), and Skysona, a medicine for cerebral adrenoleukodystrophy (CALD, a progressive, pediatric, and fatal neurodegenerative disease).

While both approvals were breakthroughs, the catch is that these gene-editing treatments are costly and complex to administer. Let's start with their prices. After its approval in August, Zynteglo became the most expensive treatment in the world with a price tag of $2.8 million. But it did not hold that title for very long. In September, Skysona made it through the last regulatory hurdle, and Bluebird set its price at $3 million.

The issue here is whether third-party payers will agree to cover these medicines. Then there is the complexity of the therapies. Qualified doctors must collect a patient's cells, edit them, and reinsert them into the individual. That's the short version. Bluebird can only administer Zynteglo and Skysona in qualified treatment centers (QTCs). Thankfully, the company seems to be making steady progress with the launch of these medicines.

During its latest quarterly update, Bluebird reported that it has started treating seven patients, including five with Zynteglo and the remaining two with Skysona. It has yet to encounter pushback from third-party payers on the prices of these therapies. Further, Bluebird is enrolling QTCs as planned, and it hopes to have 40 to 50 of them active by the end of 2023. It will take some time before revenue starts rolling in regularly, but Bluebird seems to be on the right track. And there is more. 

A critical approval could be on the way

Bluebird plans to send an application to the U.S. Food and Drug Administration for lovo-cel, a potential therapy for sickle cell disease (SCD) in the coming weeks. SCD is also a rare illness of the blood. This product could substantially improve the biotech's prospects; Bluebird estimates that about 20,000 SCD patients in the U.S. could benefit from lovo-cel.

Meanwhile, Bluebird is targeting a total of 1,500 patients with Zynteglo and 50 patients with Skysona. Assuming lovo-cel's price is in the same range as these two other therapies, Bluebird could be looking at a multibillion-dollar opportunity. 

Risk-averse investors should look elsewhere

Bluebird remains a risky stock. The company's future hinges on its ability to launch these complicated and expensive therapies. Although things are going relatively smoothly so far, let's not forget that Bluebird exited the European market because it was unable to come to lucrative agreements with payers on the continent.

Also, if anything goes wrong with lovo-cel's application, its share price will probably drop like a rock. With the market cap already at a most $323 million, investors would be left with even less if that were to happen. Lastly, other companies are well on their way to challenging Bluebird in these markets. Vertex Pharmaceuticals and CRISPR Therapeutics are currently awaiting approval for their candidate, exa-cel, which could treat both TDT and SCD.

On the positive side, Bluebird's tiny market cap means there is substantial upside ahead if the launch of Zynteglo and Skysona continues unhindered, lovo-cel does not encounter any issues, and money starts rolling in regularly for the biotech. But there is too much risk here for most investors, which is why most should opt for safer, more promising biotech stocks.