Bluebird Bio, an organization that steered three gene therapies to FDA approval however struggled to commercialize them, has discovered the money it must put these therapies on stronger monetary footing by reaching a deal to promote itself to 2 non-public fairness companies for about $29 million.
Carlyle and SK Capital Companions have agreed to pay $3 in money for every share of Bluebird, the biotech introduced Friday. That value is a 57% low cost to the corporate’s closing inventory value Thursday. The deal is closely backloaded. Bluebird shareholders might obtain $66.8 million extra, however provided that the corporate’s gene therapies obtain a specified gross sales objective.
When the deal closes, Bluebird shall be led by new CEO David Meek, whose trade expertise contains the chief government roles at Mirati Therapeutics and Ipsen. Bluebird stated Carlyle and SK Capital will present the biotech with the first capital to scale the industrial supply of its gene therapies, dear one-time therapies that provide sufferers a possible treatment.
Whereas Bluebird has been producing income from its FDA-approved gene therapies, it has additionally relied closely on a selected monetary automobile to cowl bills, such because the manufacturing of those complicated therapies. The 2022 FDA approvals of Zynteglo, for the uncommon blood dysfunction beta thalassemia, and Skysona, for the ultra-rare neurological illness cerebral adrenoleukodystrophy, every got here with a precedence assessment voucher. These vouchers are sometimes awarded to a brand new remedy that’s first to deal with a uncommon illness. The voucher program was meant to encourage extra uncommon illness drug R&D, and corporations awarded PRVs could apply them towards speedier FDA assessment of a future uncommon illness remedy. Nonetheless, biotechs sometimes view these vouchers as non-dilutive financing that’s monetized by promoting them to large pharma firms at costs topping $100 million.
Bluebird discovered patrons for the PRVs awarded for the Zynteglo and Skysona approvals. However the 2023 FDA approval of Lyfgenia in sickle cell illness didn’t include a voucher. That approval was introduced concurrent with the regulatory nod for Casgevy, a Vertex Prescribed drugs gene remedy for a similar indication. Casgevy’s approval did include a PRV. Monetary analysts who comply with Bluebird famous that missing a voucher to monetize would make commercialization of Lyfgenia difficult.
In 2024, Bluebird entered a sequence of debt agreements to assist its operations. The corporate additionally appealed the FDA denial of a PRV for Lyfgenia. The company denied the biotech’s appeals thrice. Final September, Bluebird carried out a restructuring that minimize 94 workers, representing about 25% of its workforce. As of the top of the third quarter of 2024, Bluebird reported its money place was $70.7 million. The corporate projected it will manage to pay for to final into the primary quarter of 2025. The dwindling money put the corporate vulnerable to defaulting on its loans.
Bluebird stated Friday that the sale settlement follows a complete assessment that included assembly with greater than 70 potential traders and companions over the course of 5 months. The board of administrators decided that and not using a important infusion of capital, Bluebird was vulnerable to mortgage default, leaving acquisition by Carlyle and SK Capital as “the one viable resolution to generate worth for stockholders.”
“After an in depth assessment course of, this acquisition represents one of the best path ahead — maximizing worth for stockholders and bringing important capital, industrial experience, and a dedication to offer extra sufferers the chance to learn from doubtlessly transformative gene therapies,” present Bluebird CEO Andrew Obenshain stated in a ready assertion.
Past the upfront cost, Bluebird shareholders might obtain $6.84 extra per share below a contingent worth proper (CVR) included within the settlement. Shareholders will get that money if the corporate’s gene therapies obtain $600 million in internet gross sales in any 12 consecutive month interval as much as the top of 2027.
To William Blair analyst Sami Corwin, the chance of Bluebird attaining the CVR income objective is low. In a be aware despatched to traders, Corwin stated her agency fashions Bluebird internet gross sales of $282.9 million for this yr, $409.4 million for 2026, and $546.4 million for 2027. She stated Bluebird’s dwindling money and distance from profitability made a transition away from the general public markets doubtless inevitable. However she additionally famous the hefty low cost of the acquisition value, which led to the inventory buying and selling down about 40% following the announcement of the deal.
The Bluebird acquisition, which nonetheless wants the customary approvals, is predicted to shut within the first half of this yr. When the transaction is full, Bluebird shares will not be publicly traded.
Pfizer’s Gene Remedy Pullback Continues With Termination of Beqvez
Bluebird Bio isn’t the one firm with gene remedy commercialization challenges. Pfizer is discontinuing growth and commercialization of hemophilia B gene remedy Beqvez lower than a yr after it landed FDA approval.
In a press release to Nikkei Asia, which was first to report the event Thursday, Pfizer cited restricted curiosity from sufferers and physicians. That tracks with the experiences of CSL Behring, which markets the hemophilia B gene remedy Hemgenix, and BioMarin Pharmaceutical, maker of the hemophilia A gene remedy Roctavian. Pfizer’s discontinuation of Beqvez comes two months after the pharma large gave Sangamo Therapeutics a termination discover for the partnership on a hemophilia A gene remedy that was being ready for an FDA submission.
Pfizer has been culling gene remedy from its portfolio and pipeline. In 2023, the pharma large offered its preclinical gene therapies to Alexion, the uncommon illness subsidiary of AstraZeneca. Final summer time, Pfizer introduced the discontinuation of its gene remedy for Duchenne muscular dystrophy, a transfer that adopted a Section 3 failure.
Hemophilia sufferers nonetheless have remedy choices. Infusions of clotting proteins and common dosing of sure medicine could also be power therapies, however sufferers are accustomed to them and apparently, comfy persevering with with them moderately than choosing the costly however one-time remedy from gene remedy. Regardless of Pfizer’s pullback from gene therapies for hemophilias, the corporate nonetheless has a presence in these blood issues. Final October, the FDA accepted Hympavzi, a once-weekly injectable antibody drug that Pfizer developed as a remedy for each hemophilia A and B.
Photograph: crazydiva, Getty Photos
