Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of bluebird bio (NASDAQ:BLUE), a clinical-stage biopharmaceutical company developing gene-based therapies to treat genetic disorders, surged higher by as much as 60% after reporting encouraging initial data from its HGB-205 study involving LentiGlobin as a treatment for beta-thalassemia major, a blood disorder that results in the destruction of red blood cells and lead to anemia, at the annual European Hematology Association meeting in Italy.

So what: According to bluebird's data release, the first two clinical patients in its HGB-205 have been blood transfusion independent since day 10 and 12, respectively, following treatment with LentiGlobin. Furthermore, no drug-related adverse events were noted in either patient, which is always a concern when you're dealing with gene-modifying therapies. Bluebird anticipates reporting additional data later this year on these patients as well as an expanded 15 patient beta-thalassemia trial.

Now what: Again, we have incredibly encouraging data that after less than two weeks patients who are in constant need of transfusions have been transfusion-free for months. As noted from its original LG001 study, its third subject has remained transfusion-free for a full six years! The safety profile, though, is what's more impressive to me as gene therapies can often come with notable side effects. While I believe there's merit for upside today, I'd also encourage investors not to uncork the champagne bottle just yet after a very small sample size of patients has shown a response. With a valuation that topped $1 billion this morning for a clinical-stage company I'd surmise that traders are allowing their emotions to get the best of them. Feel free to add bluebird to your watchlist, but I'd suggest monitoring it from a very safe distance for the time being.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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