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Bluebird stock pops after FDA approves its gene therapy drug

Yahoo Finance's Anjalee Khemlani joins the Live show to discuss how Bluebird stock is trading after the FDA approved its gene therapy treatment.

Video Transcript

- Welcome back. The FDA has approved a gene therapy treatment from Bluebird Bio. And at a cost of $2.8 million per patient, it will become the most expensive drug in America. Yahoo Finance's Anjalee Khemlani is here to discuss. Anjalee, big price tag.

ANJALEE KHEMLANI: Big price tag. And now puts the original most expensive drug, Novartis's Zolgensma, down to second place. So that is really telling the tale of what many had expected gene therapies to do because the way that they really calculate this is that what you're getting from gene therapy is like a one-shot one-time lifetime help rather than the way treatments have worked over time, which is repetitive doses monthly, weekly, whatever it may be. And so this is where these high price tags are coming from.

But of course, it comes on the heels of what we saw in Congress and President Biden signing the Inflation Reduction Act looking at price negotiations, and especially for Medicare, targeting the top 10 most expensive drugs. And so it really just tells the tale of what's going on with the health care world and with the drug pricing today when you're looking at what these sort of subsets of medicines are and how pricing is really going to be affecting moving forward. And it really brings to light some of the concerns that many had in the discussions about drug pricing of where we'll see those rises in pricing as well.

- I mean, we're talking about two very different situations. When you're talking about Medicare and drugs that-- we don't even know what drugs are on the list yet, by the way. They're going to be eligible for negotiation. But you're talking about drugs that are probably drugs that are required for chronic illnesses.

Whereas, as you said, I mean, these are chronic illnesses too. These are for people who have to get blood transfusions on a very, very frequent basis. So it's pretty amazing that this is something that could be cured and life changing, obviously, for these people. I don't know when my question is. I just find this story so fascinating.

ANJALEE KHEMLANI: It is. No, it is. And when we're talking about that, right, from the price perspective, it's also about how drug companies are thinking about how to price these therapies. It is a new front, really, when it comes to that long-term reduction and really speaks to sort of where these companies are looking. That's where they're looking for their big bucks is in these rare disorders. So those who are impacted by this-- there's a grand total patient population of something like 1,500 individuals alone who can be impacted by this. So this is where they've been going to get these really big paying blockbuster drugs.

- So why aren't Bluebird shares up? They were up I believe in pre-market trading, right. This would seem to be a game changer for them. Is this a company that has never had a product on the market before?

ANJALEE KHEMLANI: Yeah. And also, I want to point out that in this same category, there's been a lot of discussion about biotechs and about how high they're pricing their drugs and also what the potential long-term impact is. So zolgensma, I spoke about that one, that recently had some negative news about two deaths related to it. So there's been a lot of discussion around this topic.

And there really seems to be a lot more focus on pricing, a lot more focus on biotechs in general. They had a record year last year, right, when we're talking about even those without products on the market. And Bluebird was actually one of those that people were keeping an eye on all through last year. And everyone was riding that wave. And now there seems to be a little bit of a pullback on the enthusiasm around these biotechs. So that's sort of where we're seeing that, as you can see on your screen, right, just a lot of impact there.

- Yeah. Bluebird down close to 8% out of the gate here. Anjalee Khemlani, thanks so much. Appreciate it.