Salem Radio Network News Sunday, November 27, 2022

Business

Bluebird falls on worries over $2.8 million gene therapy’s commercial success

By Mrinalika Roy

(Reuters) -Bluebird bio slumped nearly 15% on Thursday as investors fretted over sales potential of its newly approved ultra-rare blood disorder gene therapy that is the most expensive treatment to date at $2.8 million.

The one-time treatment, Zynteglo, was approved by the U.S. Food and Drug Administration on Wednesday for patients with beta-thalassemia requiring regular blood transfusions. There are about only 1,500 of them in the United States.

Analysts do not see the drug becoming a major revenue driver for the company, despite that price tag, as the addressable patient population is tiny and not many may be willing to undergo the treatment.

“Don’t expect blockbuster sales from Zynteglo,” Oppenheimer Company analyst Mark Breidenbach said.

Of the total addressable patient pool, bluebird said there are only 850 eligible patients, with about one-third excited for the gene therapy, while the remaining either unsure or may never opt for it, Chief Operating Officer Tom Klima said.

Founded in 2010, bluebird has been riddled with challenges in the past few months; it pulled Zynteglo from Europe in a dispute over pricing and cut 30% of its workforce. In March, the company also flagged “going concern” doubts.

Wedbush analyst David Nierengarten said the drug is unlikely to generate major revenue in the United States and expects no more than 40 to 50 patients opting for it annually.

The silver lining for bluebird is the priority review voucher it received from the FDA upon approval, which it expects will help it generate $100 million to $110 million.

Such vouchers make their holders eligible to have one of their drugs reviewed in six months, compared to the standard 10 months.

“They’ll get more revenue in the first year from the priority review voucher than they will from selling Zynteglo,” Nierengarten said.

(Reporting by Mrinalika Roy in Bengaluru; Editing by Anil D’Silva and Shinjini Ganguli)

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