With Bluebird Bio stock (NASDAQ:BLUE) down about 43% in 2022, it’s safe to believe that the gene therapy outlier looks a little worse for wear. Over the last several years, it has withdrawn from the EU market, faced inquiries from authorities about the safety of its medicines, and addressed worries about its future solvency via substantial layoffs.
Why purchasing a Bluebird Stock is a brilliant idea.
There are two major reasons to own Bluebird stock (NASDAQ:BLUE). It just received approval to sell two of its gene treatments, Skysona and Zynteglo, in the United States. Skysona treats cerebral adrenoleukodystrophy (CALD), a rare and deadly neurological condition affecting young boys, while Zynteglo treats beta thalassemia, a genetic blood ailment.
Pricing and Profitability may Remain Issues.
The issue with Bluebird is that commercializing innovative medications does not benefit shareholders if the drugs are difficult for patients to get. A couple of obstacles indicate this, beginning with Zynteglo’s $2.8 million price tag for a single (possibly near-curative) medication dosage. Skysona is considerably more expensive, costing $3 million, and is not predicted to be curative, simply slowing the course of CALD.
If the conditions of coverage leave patients on the hook for a considerable amount, revenue growth will be hampered. That’s precisely what occurred when it attempted to compete with Zynteglo in the EU, resulting in a bashful retreat from the market in August 2021.
The second barrier is the complicated therapeutic manufacturing process. Bluebird must run accredited treatment facilities to deliver the treatments. It is establishing a countrywide network of them by collaborating with clinics treating individuals with illnesses. This is significant since Zynteglo is made from a sample of a patient’s cells, which must be collected, delivered to a manufacturing location, appropriately processed, and then quickly returned to the treatment center for infusion into the patient. The whole procedure is likely to be costly, not to mention challenging to scale up.
Finally, apart from the price concerns with its treatments, the biotech’s pipeline seems to be a little weak. It has one late-stage sickle cell disease program and two earlier-stage projects for the same indication. It expects to submit an approval application to authorities for the most mature initiatives as early as the first quarter of next year.
Still, suppose the clearance process is delayed, and a rival like CRISPR Therapeutics commercializes a gene treatment for sickle cell disease before it. In that case, it’s difficult to see how its pipeline can provide much fuel for future top-line growth. That is an improbable scenario, but it is still a possibility.
Wait for proof that the therapeutic approach is profitable.
Given the above, buying the dip with Bluebird Stock (NASDAQ:BLUE) is very hazardous. Better choices are undoubtedly available even if you’re used to the amount of risk associated with biotech stocks. The corporation may do well in the near term owing to increased treatment sales, but not necessarily in the long run, when profitability may be a worry.
Most investors, however, should stay away from Bluebird stock (NASDAQ:BLUE) until it can demonstrate that its medicines can be marketed profitably. Keep an eye on its financial releases in 2023 to find out.
Featured Image – Unsplash © sangharsh_l
Author Okoro Chinedu 
