Bluebird (BLUE) Up 7.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Bluebird Bio (BLUE). Shares have added about 7.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Bluebird due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
bluebird Q2 Earnings Top, Zynteglo & Skysona Fuel Revenues
bluebird delivered a loss of 67 cents per share in the second quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents per share. The company had delivered a loss of $1.27 per share in the year-ago quarter (excluding restructuring expenses).
The company reported revenues of $6.9 million in the second quarter, up from $1.5 million in the year-ago quarter. The increase of $5.4 million was primarily due to product revenues from Skysona (elivaldogene autotemcel) and Zynteglo (betibeglogene autotemcel). Revenues, however, missed the Zacks Consensus Estimate of $9 million.
The FDA approved Zynteglo and Skysona for the treatment of beta-thalassemia in adult and pediatric patients requiring regular red blood cell transfusions and for treating early, active cerebral adrenoleukodystrophy on Aug 17, 2022 and Sept 16, 2022, respectively.
Quarter in Detail
Research and development expenses declined by 33.8% to $42.3 million due to manufacturing costs related to Skysona and Zynteglo (now included in inventory and cost of product revenues), reduced employee compensation, benefit and other headcount-related expenses and a decrease in information technology and facility-related costs in 2023.
Selling, general and administrative expenses increased to $40.3 million from $36.7 million in the year-ago quarter due to commercial costs driven by marketing activities for Skysona and Zynteglo in the United States.
As of Jun 30, 2023, bluebird had cash and cash equivalents, marketable securities and a restricted cash balance of approximately $291 million, down from $364 million. Based on current operating plans, bluebird expects its cash, cash equivalents, restricted cash and marketable securities to be sufficient to meet its planned operating expenses and capital expenditure requirements into the fourth quarter of 2024. This runway includes approximately $45 million in restricted cash.
Excluding the same, bluebird estimates cash runway into the second quarter of 2024.
Other Updates
In June 2023, bluebird bio announced that the FDA accepted for priority review the company’s biologics license application seeking approval for gene therapy lovotibeglogene autotemcel (lovo-cel) for patients with sickle cell disease. bluebird is pursuing FDA approval for lovo-cel for patients aged 12 and older with a history of vaso-occlusive events. The regulatory body has set a target action date of Dec 20, 2023.
The priority review will shorten the FDA’s review of the application to six months from the time of filing versus a standard review timeline of 10 months. The company continues to anticipate a commercial launch in early 2024.
bluebird has made significant progress in the launch of Zynteglo with 11 patient starts (cell collections) for individuals suffering from beta-thalassemia.
The first commercial infusion for Syksona was completed in March 2023. Cell collection has been completed for five patients to be treated with Skysona. bluebird continues to anticipate 5-10 patient starts this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -6.57% due to these changes.
VGM Scores
At this time, Bluebird has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Bluebird has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Bluebird is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Apellis Pharmaceuticals, Inc. (APLS), a stock from the same industry, has gained 76.9%. The company reported its results for the quarter ended June 2023 more than a month ago.
Apellis Pharmaceuticals, Inc. reported revenues of $94.97 million in the last reported quarter, representing a year-over-year change of +481.9%. EPS of -$1.02 for the same period compares with -$1.46 a year ago.
For the current quarter, Apellis Pharmaceuticals, Inc. is expected to post a loss of $1.22 per share, indicating a change of +30.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -3% over the last 30 days.
Apellis Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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