Bluebid Bio Shares Fall 4.3% After Gene Therapy Update
Shares of Bluebird Bio (BLUE) fell 4.3% today after the company announced that one patient on its old-generation gene therapy required two blood transfusions due to anemia, after 7 years being transfusion-free. This news spooked investors with the implication that gene therapy may not last, causing the fall today. More specifically the patient being discussed was one who was treated back in 2007 using Bluebird Bio's old generation gene therapy -- HPV569.
What investors should note is that HPV569 is no longer in use, and was the company's first generation gene therapy. That therapy is not as good at developing hemoglobins for Beta Thalassemia as the company's new generation gene therapy known as BB305. Despite this info investors seemed to dump shares first and ask questions later.
There is no way to know for sure if the new gene therapy by Bluebird Bio will hold up for more than 7 years in helping Beta Thalassemia patients. What we do know is that BB305 has already shown to be more potent than the company's first generation gene therapy treatment. We believe that once investors have time to digest the data shown today they will act accordingly. Today's drop seems to have been a knee-jerk reaction to take profits on this one time event.
Disclosure: None.
Blue bounced back yesterday up almost 3% perhaps as a result of Tuesday's research call: Bluebird Bio, Inc. was given a ‘double your money’ research call on Tuesday. But on the downside, Oppenheimer has the stock as an Outperform rating, and assigned a $162.00 price target after noting that sell-off has gone too far versus Bluebird’s upside and growth opportunity. Since May 29th, the stock has fallen considerably from its height of $197. Can it regain its momentum? Albeit another underperfroming alternative to Blue might be Glaxo Smith Kline with a market cap of $100.91bn vs Blue's cap of $3.01bn. GSK rewards its shareholders with a healthy annual dividend yield of 5.48%.
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