Bluebird Bio (BLUE) said on Wednesday that experimental gene therapy for blood diseases was probably not the culprit in a patient’s cancer diagnosis, which led to BLUE stock popping up.
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The Food and Drug Administration clinically placed Bluebird’s gene therapy studies LentiGlobin in sickle cell and beta-thalassemia after a patient received an acute myeloid leukemia diagnosis. That news caused BLUE stocks to tumble to a seven-year low in February.
Additional analyzes presented Wednesday suggest that gene therapy did not cause the patient to develop cancer, Bluebird said in a news release. But analysts have offered mixed opinions on the news. Some suggested that the cancer stigma would follow gene therapy for some time.
Mizuho Securities analyst Difei Yang was more positive about the report. She raises her price target on BLUE shares to 69 from 34 and improves to a buy rating.
“Although today’s development is positive, we believe that these potential safety issues are likely to alter the risk / benefit assessment of gene therapy in patients with sickle cell disease, and therefore we believe that market penetration may be below our previous expectations, she said. in a note to customers.
BLUE Stock Pops on Gene Therapy Analysis
On the stock market, the BLUE shares jumped 8.1% to 32.48.
Bluebird uses a blank virus to deliver LentiGlobin to cells. Last month, Bluebird reported that a patient who had been treated with gene therapy for more than five years had developed acute myeloid leukemia.
Additional analysis showed that the blank virus – known as a viral vector – was attached to a gene called VAMP4. This gene is not related to the development of acute myeloid leukemia. It is also not known that it requires the cellular distribution for cancer.
Furthermore, the patient has chromosomal abnormalities in genes associated with acute myeloid leukemia, Maxim analyst Jason McCarthy said in a report to clients. He maintained his hold on BLUE shares as the company sorts out timelines with the FDA.
Another cancer diagnosis still in question
Bluebird believes the analysis supports the resumption of clinical trials of LentiGlobin.
Many consider the news a blessing for Zynteglo. Zynteglo, a gene therapy approved in Europe, uses the same empty virus. Zynteglo treats some beta-thalassemia patients who are dependent on blood transfusions.
Meanwhile, BLUE stock analysts are still awaiting information regarding a patient who has received LentiGlobin gene therapy. Doctors later diagnosed the patient with myelodysplastic syndrome, another type of blood cancer.
Wedbush analyst David Nierengarten noted that patients had mutations in some bone marrow cells but did not meet all the requirements for a diagnosis of myelodysplastic syndrome. Nierengarten maintained its neutral rating and 29 price target on BLUE stock.
“We remain skeptical that Bluebird will be able to overcome the negative stigma with the program, especially where commercialization of sickle cell disease remains unlikely for the next two years and the sickle cell disease space invests significantly in other genetic medicine.” he said.
Follow Allison Gatlin on Twitter @IBD_AGatlin.
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