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bluebird (BLUE) Stock Down on Raising Additional Capital
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bluebird bio, Inc. (BLUE - Free Report) announced the pricing of the underwritten public offering of 83.3 million shares of its common stock at an offer price of $1.50 per share.
The company has also granted the underwriters a 30-day option to purchase up to an additional 12.5 million shares of its common stock at the public offer price after deducting underwriting discounts and commissions.
bluebird expects to generate $125 million (gross proceeds) from the offering.
Shares of the company tanked 20.4% following the same, as issuing more shares means dilution of ownership of existing shareholders.
bluebird intends to use the net proceeds of the offering to support the commercialization and manufacturing of its three approved gene therapies — Zynteglo, Skysona and Lyfgenia. The capital will also be used to fund working capital and other general corporate purposes.
bluebird’s cash, cash equivalents, marketable securities and restricted cash balance totaled approximately $227 million as of Sep 30, 2023. The company anticipates full-year 2023 net cash burn to be in the range of $270-$300 million. bluebird was expected to raise capital as it needs funds to commercialize its three approved therapies.
Image Source: Zacks Investment Research
Shares of bluebird have plunged 80.5% year to date compared with the industry’s decline of 16.9%.
Shares have been under pressure, particularly after the FDA recently approved its third gene therapy, lovotibeglogene autotemcel (lovo-cel), under the brand name Lyfgenia, for the treatment of sickle cell disease (SCD) in patients aged 12 years and older with a history of vaso-occlusive events.
This is primarily because of the boxed warning of hematologic malignancy issued with Lyfgenia’s label. Some patients developed blood cancer when being treated with Lyfgenia.
Hence, bluebird will need to monitor patients closely for evidence of malignancy through complete blood counts at least every six months and through integration site analysis at months 6, 12 and as warranted.
Moreover, the FDA concurrently approved Vertex Pharmaceuticals (VRTX - Free Report) and CRISPR Therapeutics’ (CRSP - Free Report) exagamglogene autotemcel, a CRISPR/Cas9 genome-edited cell therapy, for the treatment of SCD in patients aged 12 years and older with recurrent vaso-occlusive crises.
Exagamglogene autotemcel was approved under the brand name Casgevy, making it the first FDA-approved treatment to utilize a type of novel genome editing technology.
Approval of another gene therapy for the same indication will make it challenging for bluebird to gain market shares.
Also, BLUE has priced Lyfgenia at $3.1 million per dose. Vertex and CRISPR's gene therapy will cost $2.2 million each per dose.
bluebird also did not receive a Rare Pediatric Disease Priority Review Voucher (PRV) as part of the review. Management had expected to receive the same as it had earlier received two PRVs under an FDA program intended to encourage the development of treatments for rare pediatric diseases. In the first quarter of 2023, the company sold its second PRV for aggregate net proceeds of $92.9 million.
Entrada’s loss per share estimate for 2023 narrowed from $2.07 to 9 cents in the past 60 days. The same for 2024 narrowed from $2.35 to $2.04 during the same period.
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bluebird (BLUE) Stock Down on Raising Additional Capital
bluebird bio, Inc. (BLUE - Free Report) announced the pricing of the underwritten public offering of 83.3 million shares of its common stock at an offer price of $1.50 per share.
The company has also granted the underwriters a 30-day option to purchase up to an additional 12.5 million shares of its common stock at the public offer price after deducting underwriting discounts and commissions.
bluebird expects to generate $125 million (gross proceeds) from the offering.
Shares of the company tanked 20.4% following the same, as issuing more shares means dilution of ownership of existing shareholders.
bluebird intends to use the net proceeds of the offering to support the commercialization and manufacturing of its three approved gene therapies — Zynteglo, Skysona and Lyfgenia. The capital will also be used to fund working capital and other general corporate purposes.
bluebird’s cash, cash equivalents, marketable securities and restricted cash balance totaled approximately $227 million as of Sep 30, 2023. The company anticipates full-year 2023 net cash burn to be in the range of $270-$300 million. bluebird was expected to raise capital as it needs funds to commercialize its three approved therapies.
Image Source: Zacks Investment Research
Shares of bluebird have plunged 80.5% year to date compared with the industry’s decline of 16.9%.
Shares have been under pressure, particularly after the FDA recently approved its third gene therapy, lovotibeglogene autotemcel (lovo-cel), under the brand name Lyfgenia, for the treatment of sickle cell disease (SCD) in patients aged 12 years and older with a history of vaso-occlusive events.
This is primarily because of the boxed warning of hematologic malignancy issued with Lyfgenia’s label. Some patients developed blood cancer when being treated with Lyfgenia.
Hence, bluebird will need to monitor patients closely for evidence of malignancy through complete blood counts at least every six months and through integration site analysis at months 6, 12 and as warranted.
Moreover, the FDA concurrently approved Vertex Pharmaceuticals (VRTX - Free Report) and CRISPR Therapeutics’ (CRSP - Free Report) exagamglogene autotemcel, a CRISPR/Cas9 genome-edited cell therapy, for the treatment of SCD in patients aged 12 years and older with recurrent vaso-occlusive crises.
Exagamglogene autotemcel was approved under the brand name Casgevy, making it the first FDA-approved treatment to utilize a type of novel genome editing technology.
Approval of another gene therapy for the same indication will make it challenging for bluebird to gain market shares.
Also, BLUE has priced Lyfgenia at $3.1 million per dose. Vertex and CRISPR's gene therapy will cost $2.2 million each per dose.
bluebird also did not receive a Rare Pediatric Disease Priority Review Voucher (PRV) as part of the review. Management had expected to receive the same as it had earlier received two PRVs under an FDA program intended to encourage the development of treatments for rare pediatric diseases. In the first quarter of 2023, the company sold its second PRV for aggregate net proceeds of $92.9 million.
Zacks Rank and A Stock to Consider
bluebird currently has a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is Entrada Therapeutics (TRDA - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Entrada’s loss per share estimate for 2023 narrowed from $2.07 to 9 cents in the past 60 days. The same for 2024 narrowed from $2.35 to $2.04 during the same period.