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bluebird's (BLUE) Loss Wider Than Expected, Revenues Beat

Zacks Equity Research

bluebird bio, Inc. BLUE reported a loss of $3.55 per share in the second quarter of 2019, wider than the Zacks Consensus Estimate of a loss of $3.03 and the year-ago quarter’s loss of $2.91. Revenues of $13.3 million beat the Zacks Consensus Estimate of $11 million. Revenues were up from $7.9 million in the year-ago quarter. The increase was mainly attributable to higher collaboration revenues under the company’s arrangement with Celgene Corp. CELG and elevated license and royalty revenues.

bluebird’s stock has rallied 29.2% in the year so far, compared with the industry growth of 0.6%.

Quarter in Detail

R&D expenses escalated to $146.5 million in the second quarter of 2019 from $115 million a year ago, due to costs incurred by the company to advance and expand the pipeline.

G&A expenses of $68.6 million were up 66.5% from the year-ago quarter, due to the overall growth of the pipeline and commercial-readiness activities.

Pipeline Development

bluebird’s pipeline progress has been impressive in the second quarter. The pipeline includes candidates for severe genetic diseases. The company’s portfolio consists of candidates like LentiGlobin for the treatment of transfusion-dependent β-thalassemia (TDT) and severe sickle cell disease (SCD), and Lenti-D for the treatment of cerebral adrenoleukodystrophy (CALD).

In June 2019, the European Commission (EC) granted conditional marketing authorization to Zynteglo (autologous CD34+ cells encoding βA-T87Q-globin gene, known as LentiGlobinfor TDT), a gene therapy for patients 12 years or older with transfusion-dependent β-thalassemia (TDT), who do not have a β00 genotype and for whom hematopoietic stem cell (HSC) transplantation is appropriate but a human leukocyte antigen (HLA)-matched related HSC donor is not available. Zynteglo is bluebird’s first gene therapy to obtain regulatory approval.

The company expects to initiate a rolling biologics licensing application submission to the FDA for Zynteglo in patients with TDT and non-β00 genotypes by the end of 2019.

The company also plans to initiate a phase 3 HGB-210 study of LentiGlobin in patients with SCD by the end of 2019.

Our Take

bluebird’s progress with its pipeline is encouraging. The company has an impressive pipeline of gene therapies for genetic diseases and cancer. Zynteglo looks promising and a conditional marketing authorization in Europe is a positive. We are also optimistic about bluebird’s collaboration with Regeneron REGN, as this provides the former with funds.

bluebird bio, Inc. Price, Consensus and EPS Surprise

bluebird bio, Inc. Price, Consensus and EPS Surprise

bluebird bio, Inc. price-consensus-eps-surprise-chart | bluebird bio, Inc. Quote

Zacks Rank & Stock to Consider

bluebird currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the biotech sector is Alnylam Pharmaceuticals Inc. ALNY, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alnylam’s loss per share estimates have narrowed from $6.88 to $6.43 for 2020 in the past 60 days. The company beat earnings estimates in three of the trailing four quarters, with the average positive surprise being 8.93%.    

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