What: Shares of the clinical-stage gene therapy company bluebird bio (NASDAQ:BLUE) jumped 12.9% Wednesday on heavier than normal volume.

Image source: Flickr via user South Florida Sun.

So what: The biotech's surge forward yesterday, however, wasn't due to a company-specific event. Instead, Bluebird's shares were apparently lifted by an industrywide rally that also drove the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) up by 5.88% on more than double the average volume for this broad-based fund. 

This sudden renewed interest in biotech stocks by investors seems to stem from the failed merger between Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) earlier this week. After the two large-cap drugmakers announced that they would abandon their planned merger, rumors immediately began to swirl about which companies Pfizer and/or Allergan would target as possible buyout candidates going forward. After all, Allergan is known for its penchant for acquiring promising biopharmas, and Pfizer undoubtedly needs to bring additional growth products into the fold in order to firmly put the patent cliff behind it.

Is Bluebird a viable buyout candidate? While anything is possible when it comes M&A activity in biotech and biopharma, my quick take is that Bluebird is still in the "prove it" mode of its life cycle, meaning that a buyout is unlikely right now. 

Now what: The bottom line is that the commercial potential of Bluebird's lead product candidate, LentiGlobin -- indicated as a treatment for the rare blood disorder beta thalassemia and severe sickle cell disease -- isn't exactly clear at this stage after a somewhat disappointing clinical update last November. So, until Bluebird's clinical pipeline matures further, I'd recommend investors stick to the sidelines with this risky clinical-stage company, and perhaps use a well-diversified ETF like the IBB to gain exposure to this particular group of stocks.