Bluebird Bio (BLUE) said on Wednesday that his experimental gene therapy for blood disorders was probably not to blame for a patient’s cancer diagnosis, causing BLUE’s action to burst.
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The Food and Drug Administration gave clinical support to Bluebird’s studies of LentiGlobin gene therapy in sickle cell disease and beta thalassemia after a patient was diagnosed with acute myeloid leukemia. This news caused BLUE’s stock to plummet to its biggest seven-year low in February.
Additional analyzes offered on Wednesday suggest that gene therapy did not cause the patient to develop cancer, Bluebird said in a press release. But analysts offered differing views on the news. Some have suggested that the stigma of cancer would follow gene therapy for some time.
Mizuho Securities analyst Difei Yang was more optimistic in the report. It raised its target price on the BLUE stock from 34 to 69 and moved on to a buy rating.
“However, although today’s development is positive, we believe that these possible safety concerns are likely to change 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 in gene therapy analysis
In the stock market today, the BLUE stock jumped 8.1% to 32.48.
Bluebird uses an empty virus to deliver LentiGlobin to cells. Last month, Bluebird reported that a patient treated for more than five years with gene therapy developed acute myeloid leukemia.
Further analysis showed that the deflated virus – known as a viral vector – has become attached to a gene called VAMP4. This gene is not associated with the development of acute myeloid leukemia. Nor is it known to stimulate the necessary cell proliferation for cancer.
In addition, the patient had chromosomal abnormalities in genes associated with acute myeloid leukemia, said Jason McCarthy, an analyst at Maxim, in a report to clients. He maintained his retention rating on BLUE’s shares while the company set deadlines with the FDA.
Another cancer diagnosis still questioned
Bluebird believes the analysis supports the resumption of clinical studies for LentiGlobin.
Many see the news as a blessing for Zynteglo. A gene therapy approved in Europe, Zynteglo uses the same deflated virus. Zynteglo treats some patients with beta thalassemia who depend on blood transfusions.
Meanwhile, BLUE’s stock analysts still await more information regarding a patient who received gene therapy with LentiGlobin. Later, doctors diagnosed that patient with myelodysplastic syndrome, another type of blood cancer.
Wedbush analyst David Nierengarten noted that the patient had mutations in some bone marrow cells, but did not meet all the requirements for a diagnosis of myelodysplastic syndrome. Nierengarten maintained its neutral valuation and target price of 29 for AZUIS shares.
“We remain skeptical that Bluebird will be able to overcome the negative stigma with the program, particularly where the commercialization of sickle cell disease remains unlikely for the next two years or more and the sickle cell space is seeing significant investment in other genetic drugs,” he said.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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