Bluebird Bio, an organization that steered three gene therapies to FDA approval however struggled to commercialize them, has discovered the money it must put these therapies on stronger monetary footing by reaching a deal to promote itself to 2 personal fairness companies for about $29 million.
Carlyle and SK Capital Companions have agreed to pay $3 in money for every share of Bluebird, the biotech introduced Friday. That value is a 57% low cost to the corporate’s closing inventory value Thursday. The deal is closely backloaded. Bluebird shareholders might obtain $66.8 million extra, however provided that the corporate’s gene therapies obtain a specified gross sales aim.
When the deal closes, Bluebird will probably be led by new CEO David Meek, whose business expertise consists of the chief govt roles at Mirati Therapeutics and Ipsen. Bluebird stated Carlyle and SK Capital will present the biotech with the first capital to scale the business supply of its gene therapies, dear one-time remedies that supply sufferers a possible remedy.
Whereas Bluebird has been producing income from its FDA-approved gene therapies, it has additionally relied closely on a specific monetary automobile to cowl bills, such because the manufacturing of those complicated therapies. The 2022 FDA approvals of Zynteglo, for the uncommon blood dysfunction beta thalassemia, and Skysona, for the ultra-rare neurological illness cerebral adrenoleukodystrophy, every got here with a precedence overview voucher. These vouchers are sometimes awarded to a brand new remedy that’s first to deal with a uncommon illness. The voucher program was supposed to encourage extra uncommon illness drug R&D, and corporations awarded PRVs could apply them towards speedier FDA overview of a future uncommon illness remedy. Nonetheless, biotechs sometimes view these vouchers as non-dilutive financing that’s monetized by promoting them to large pharma corporations at costs topping $100 million.
Bluebird discovered patrons for the PRVs awarded for the Zynteglo and Skysona approvals. However the 2023 FDA approval of Lyfgenia in sickle cell illness didn’t include a voucher. That approval was introduced concurrent with the regulatory nod for Casgevy, a Vertex Prescription drugs gene remedy for a similar indication. Casgevy’s approval did include a PRV. Monetary analysts who observe Bluebird famous that missing a voucher to monetize would make commercialization of Lyfgenia difficult.
In 2024, Bluebird entered a collection of debt agreements to help its operations. The corporate additionally appealed the FDA denial of a PRV for Lyfgenia. The company denied the biotech’s appeals 3 times. Final September, Bluebird carried out a restructuring that reduce 94 workers, representing about 25% of its workforce. As of the tip of the third quarter of 2024, Bluebird reported its money place was $70.7 million. The corporate projected it could come up with the money for to final into the primary quarter of 2025. The dwindling money put the corporate vulnerable to defaulting on its loans.
Bluebird stated Friday that the sale settlement follows a complete overview that included assembly with greater than 70 potential buyers and companions over the course of 5 months. The board of administrators decided that and not using a vital infusion of capital, Bluebird was vulnerable to mortgage default, leaving acquisition by Carlyle and SK Capital as “the one viable resolution to generate worth for stockholders.”
“After an in depth overview course of, this acquisition represents the most effective path ahead — maximizing worth for stockholders and bringing vital capital, business experience, and a dedication to supply extra sufferers the chance to learn from probably transformative gene therapies,” present Bluebird CEO Andrew Obenshain stated in a ready assertion.
Past the upfront fee, Bluebird shareholders might obtain $6.84 extra per share beneath a contingent worth proper (CVR) included within the settlement. Shareholders will get that money if the corporate’s gene therapies obtain $600 million in web gross sales in any 12 consecutive month interval as much as the tip of 2027.
To William Blair analyst Sami Corwin, the chance of Bluebird attaining the CVR income aim is low. In a notice despatched to buyers, Corwin stated her agency fashions Bluebird web gross sales of $282.9 million for this yr, $409.4 million for 2026, and $546.4 million for 2027. She stated Bluebird’s dwindling money and distance from profitability made a transition away from the general public markets probably inevitable. However she additionally famous the hefty low cost of the acquisition value, which led to the inventory buying and selling down about 40% following the announcement of the deal.
The Bluebird acquisition, which nonetheless wants the customary approvals, is anticipated to shut within the first half of this yr. When the transaction is full, Bluebird shares will now not be publicly traded.
Pfizer’s Gene Remedy Pullback Continues With Termination of Beqvez
Bluebird Bio isn’t the one firm with gene remedy commercialization challenges. Pfizer is discontinuing growth and commercialization of hemophilia B gene remedy Beqvez lower than a yr after it landed FDA approval.
In a press release to Nikkei Asia, which was first to report the event Thursday, Pfizer cited restricted curiosity from sufferers and physicians. That tracks with the experiences of CSL Behring, which markets the hemophilia B gene remedy Hemgenix, and BioMarin Pharmaceutical, maker of the hemophilia A gene remedy Roctavian. Pfizer’s discontinuation of Beqvez comes two months after the pharma big gave Sangamo Therapeutics a termination discover for the partnership on a hemophilia A gene remedy that was being ready for an FDA submission.
Pfizer has been culling gene remedy from its portfolio and pipeline. In 2023, the pharma big bought its preclinical gene therapies to Alexion, the uncommon illness subsidiary of AstraZeneca. Final summer season, Pfizer introduced the discontinuation of its gene remedy for Duchenne muscular dystrophy, a transfer that adopted a Section 3 failure.
Hemophilia sufferers nonetheless have therapy choices. Infusions of clotting proteins and common dosing of sure medicine could also be continual therapies, however sufferers are acquainted with them and apparently, comfy persevering with with them quite than choosing the costly however one-time therapy from gene remedy. Regardless of Pfizer’s pullback from gene therapies for hemophilias, the corporate nonetheless has a presence in these blood problems. Final October, the FDA authorised Hympavzi, a once-weekly injectable antibody drug that Pfizer developed as a therapy for each hemophilia A and B.
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