Bluebird
Bio,
a
company
that
steered
three
gene
therapies
to
FDA
approval
but
struggled
to
commercialize
them,
has
found
the
cash
it
needs
to
put
those
therapies
on
stronger
financial
footing
by
reaching
a
deal
to
sell
itself
to
two
private
equity
firms
for
about
$29
million.
Carlyle
and
SK
Capital
Partners
have
agreed
to
pay
$3
in
cash
for
each
share
of
Bluebird,
the
biotech
announced
Friday.
That
price
is
a
57%
discount
to
the
company’s
closing
stock
price
Thursday.
The
deal
is
heavily
backloaded.
Bluebird
shareholders
could
receive
$66.8
million
more,
but
only
if
the
company’s
gene
therapies
achieve
a
specified
sales
goal.
When
the
deal
closes,
Bluebird
will
be
led
by
new
CEO
David
Meek,
whose
industry
experience
includes
the
chief
executive
roles
at
Mirati
Therapeutics
and
Ipsen.
Bluebird
said
Carlyle
and
SK
Capital
will
provide
the
biotech
with
the
primary
capital
to
scale
the
commercial
delivery
of
its
gene
therapies,
pricey
one-time
treatments
that
offer
patients
a
potential
cure.
While
Bluebird
has
been
generating
revenue
from
its
FDA-approved
gene
therapies,
it
has
also
relied
heavily
on
a
particular
financial
vehicle
to
cover
expenses,
such
as
the
manufacturing
of
these
complex
therapies.
The
2022
FDA
approvals
of
Zynteglo,
for
the
rare
blood
disorder
beta
thalassemia,
and
Skysona,
for
the
ultra-rare
neurological
disease
cerebral
adrenoleukodystrophy,
each
came
with
a
priority
review
voucher.
These
vouchers
are
typically
awarded
to
a
new
therapy
that
is
first
to
treat
a
rare
disease.
The
voucher
program
was
intended
to
encourage
more
rare
disease
drug
R&D,
and
companies
awarded
PRVs
may
apply
them
toward
speedier
FDA
review
of
a
future
rare
disease
therapy.
However,
biotechs
typically
view
these
vouchers
as
non-dilutive
financing
that’s
monetized
by
selling
them
to
big
pharma
companies
at
prices
topping
$100
million.
Bluebird
found
buyers
for
the
PRVs
awarded
for
the
Zynteglo
and
Skysona
approvals.
But
the
2023
FDA
approval
of
Lyfgenia
in
sickle
cell
disease
did
not
come
with
a
voucher.
That
approval
was
announced
concurrent
with
the
regulatory
nod
for
Casgevy,
a
Vertex
Pharmaceuticals
gene
therapy
for
the
same
indication.
Casgevy’s
approval
did
come
with
a
PRV.
Financial
analysts
who
follow
Bluebird
noted
that
lacking
a
voucher
to
monetize
would
make
commercialization
of
Lyfgenia
challenging.
In
2024,
Bluebird
entered
a
series
of
debt
agreements
to
support
its
operations.
The
company
also
appealed
the
FDA
denial
of
a
PRV
for
Lyfgenia.
The
agency
denied
the
biotech’s
appeals
three
times.
Last
September,
Bluebird
implemented
a
restructuring
that
cut
94
employees,
representing
about
25%
of
its
workforce.
As
of
the
end
of
the
third
quarter
of
2024,
Bluebird
reported
its
cash
position
was
$70.7
million.
The
company
projected
it
would
have
enough
money
to
last
into
the
first
quarter
of
2025.
The
dwindling
cash
put
the
company
at
risk
of
defaulting
on
its
loans.
Bluebird
said
Friday
that
the
sale
agreement
follows
a
comprehensive
review
that
included
meeting
with
more
than
70
potential
investors
and
partners
over
the
course
of
five
months.
The
board
of
directors
determined
that
without
a
significant
infusion
of
capital,
Bluebird
was
at
risk
of
loan
default,
leaving
acquisition
by
Carlyle
and
SK
Capital
as
“the
only
viable
solution
to
generate
value
for
stockholders.”
“After
an
extensive
review
process,
this
acquisition
represents
the
best
path
forward
—
maximizing
value
for
stockholders
and
bringing
significant
capital,
commercial
expertise,
and
a
commitment
to
provide
more
patients
the
opportunity
to
benefit
from
potentially
transformative
gene
therapies,”
current
Bluebird
CEO
Andrew
Obenshain
said
in
a
prepared
statement.
Beyond
the
upfront
payment,
Bluebird
shareholders
could
receive
$6.84
more
per
share
under
a
contingent
value
right
(CVR)
included
in
the
agreement.
Shareholders
will
get
that
cash
if
the
company’s
gene
therapies
achieve
$600
million
in
net
sales
in
any
12
consecutive
month
period
up
to
the
end
of
2027.
To
William
Blair
analyst
Sami
Corwin,
the
probability
of
Bluebird
achieving
the
CVR
revenue
goal
is
low.
In
a
note
sent
to
investors,
Corwin
said
her
firm
models
Bluebird
net
sales
of
$282.9
million
for
this
year,
$409.4
million
for
2026,
and
$546.4
million
for
2027.
She
said
Bluebird’s
dwindling
cash
and
distance
from
profitability
made
a
transition
away
from
the
public
markets
likely
inevitable.
But
she
also
noted
the
hefty
discount
of
the
acquisition
price,
which
led
to
the
stock
trading
down
about
40%
following
the
announcement
of
the
deal.
The
Bluebird
acquisition,
which
still
needs
the
customary
approvals,
is
expected
to
close
in
the
first
half
of
this
year.
When
the
transaction
is
complete,
Bluebird
shares
will
no
longer
be
publicly
traded.
Pfizer’s
Gene
Therapy
Pullback
Continues
With
Termination
of
Beqvez
Bluebird
Bio
isn’t
the
only
company
with
gene
therapy
commercialization
challenges.
Pfizer
is
discontinuing
development
and
commercialization
of
hemophilia
B
gene
therapy
Beqvez
less
than
a
year
after
it
landed
FDA
approval.
In
a
statement
to
Nikkei
Asia,
which
was
first
to
report
the
development
Thursday,
Pfizer
cited
limited
interest
from
patients
and
physicians.
That
tracks
with
the
experiences
of
CSL
Behring,
which
markets
the
hemophilia
B
gene
therapy
Hemgenix,
and
BioMarin
Pharmaceutical,
maker
of
the
hemophilia
A
gene
therapy
Roctavian.
Pfizer’s
discontinuation
of
Beqvez
comes
two
months
after
the
pharma
giant
gave
Sangamo
Therapeutics
a
termination
notice
for
the
partnership
on
a
hemophilia
A
gene
therapy
that
was
being
prepared
for
an
FDA
submission.
Pfizer
has
been
culling
gene
therapy
from
its
portfolio
and
pipeline.
In
2023,
the
pharma
giant
sold
its
preclinical
gene
therapies to
Alexion,
the
rare
disease
subsidiary
of
AstraZeneca.
Last
summer,
Pfizer
announced
the
discontinuation
of
its
gene
therapy
for
Duchenne
muscular
dystrophy,
a
move
that
followed
a
Phase
3
failure.
Hemophilia
patients
still
have
treatment
options.
Infusions
of
clotting
proteins
and
regular
dosing
of
certain
drugs
may
be
chronic
therapies,
but
patients
are
familiar
with
them
and
apparently,
comfortable
continuing
with
them
rather
than
opting
for
the
expensive
but
one-time
treatment
from
gene
therapy.
Despite
Pfizer’s
pullback
from
gene
therapies
for
hemophilias,
the
company
still
has
a
presence
in
these
blood
disorders.
Last
October,
the
FDA
approved
Hympavzi,
a
once-weekly
injectable
antibody
drug
that
Pfizer
developed
as
a
treatment
for
both
hemophilia
A
and
B.
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crazydiva,
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