Please ensure Javascript is enabled for purposes of website accessibility

Here's Why bluebird bio.'s Stock Tumbled in March

By George Budwell - Apr 12, 2016 at 8:27AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A volatile market sent the biotech's shares lower in March.

BLUE Chart

What: Shares of the clinical-stage biotech bluebird bio (BLUE 6.50%) shed nearly 16% of their value last month, according to data from S&P Global Market Intelligence. On the bright side, bluebird's poor showing last month seems to be the result of an industrywide pullback that affected developmental-stage companies particularly hard, and not a company-driven event. Keeping with this theme, the iShares Nasdaq Biotechnology ETF (IBB 0.94%) also ended the month in the red:

IBB Chart

IBB data by YCharts.

So what: Bluebird was, not so long ago, one of the best-performing biotech stocks due to the initial success of its gene therapy Lentiglobin in patients with the rare blood disorder beta thalassemia. However, the market has seemingly lost its appetite for risky clinical-stage biotechs, as evinced by bluebird's recent struggles, along with the pullback in the iShares Nasdaq Biotechnology ETF from its former highs. 

Image source: Pixabay. 

Now what: Bluebird is scheduled to give a clinical update for its product candidate, Lenti-D, that's currently in a Phase 2/3 study for the treatment of childhood cerebral adrenoleukodystrophy on April 20, 2016 at the American Academy of Neurology 2016 Annual Meeting. In addition, the biotech is reportedly gearing up for the possible commercial launch of Lentiglobin in the near future. So, bluebird does have some upcoming catalysts that could help its shares rebound. 

Having said that, I wouldn't necessarily jump into this risky biotech stock just yet. After all, the company still has a considerable amount of work to do to validate its gene therapy platform, and the market hasn't exactly changed its pessimistic demeanor toward clinical-stage biotechs as a whole. That's why I'm personally using the the broad-based iShares Nasdaq Biotechnology ETF at the moment to gain exposure to this particularly volatile, yet promising, group of stocks.

George Budwell owns shares of iShares NASDAQ Biotechnology Index (ETF). The Motley Fool recommends Bluebird Bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

bluebird bio, Inc. Stock Quote
bluebird bio, Inc.
BLUE
$6.72 (6.50%) $0.41
iShares Trust - iShares Nasdaq Biotechnology ETF Stock Quote
iShares Trust - iShares Nasdaq Biotechnology ETF
IBB
$132.52 (0.94%) $1.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.