bluebird bio’s Zynteglo Gets FDA Approval – List Price In-Line Says Analyst
2022.08.18 00:02
bluebird bio (BLUE)
By Sam Boughedda
bluebird bio’s (NASDAQ:BLUE) cell-based gene therapy, Zynteglo, has been approved for the treatment of adult and pediatric patients with beta-thalassemia by the U.S. Food and Drug Administration, it was announced Wednesday.
Beta-thalassemia is a type of inherited blood disorder that causes a reduction of normal hemoglobin and red blood cells in the blood. Zynteglo is the first cell-based gene therapy to treat the blood disorder.
Zynteglo is a one-time gene therapy product administered as a single dose. Its safety and effectiveness were established in two multicenter clinical studies that included adult and pediatric patients with beta-thalassemia requiring regular transfusions.
“Today’s approval is an important advance in the treatment of beta-thalassemia, particularly in individuals who require ongoing red blood cell transfusions,” said Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research.
Following the news, Bluebird shares jumped, hitting a high of $8.18 per share. They closed the session up by 3%.
Commenting on the news, an RBC Capital Markets analyst, who has a Sector Perform rating and a $10 price target on the stock, told investors in a note that the “label reads pretty benign to us, with the need to monitor patients annually for 15 years post infusion to mitigate insertional oncogenesis risk in line with prior gene therapy guidance.”
“List price is $2.8m, above the $2.1m previously planned for Europe, but in line with recent ICER report (link). In contrast with prior EU model, where the payment was tranched over 5 years and incurred only if the patient remained transfusion independent, the payment will be upfront with BLUE providing an up to 80% rebate if the patient does not remain transfusion independent. This is a clear positive for BLUE and the broader field of gene therapy, but we remain SP, Speculative Risk on the stock given a relatively small commercial opportunity,” he added.
Elsewhere, a Morgan Stanley analyst maintained a $3 price target and Underweight rating on the stock, stating, “Zynteglo will have a list price of $2.8M which we see as generally in-line with investor expectations.”
“Mgt. believes ~1,300 eligible patients are in the US. We expect a slow launch with first patient dosing and revenue in 2023. FDA approval, while expected, is a positive for BLUE, allowing the mgt. to extend its cash runway by selling the priority review voucher (we estimate ~$100-125M). Near-term progress on the SCD filing, removal of the going concern language and initial TDT uptake are key drivers of BLUE,” added the analyst.
