The acceptance of bluebird bio’s Biologics License Application (BLA) for its gene therapy lovotibeglogene autotemcel (lovo-cel) targeting sickle cell disease patients for priority review by the US Food and Drug Administration (FDA) could mark a key catalyst for the company, analysts at Baird Equity Research believe.
bluebird on Tuesday announced the BLA acceptance and that the FDA has set a Prescription Drug User Fee Act (PDUFA) date of December 20, 2023.
The analysts wrote in a note to clients that the BLA acceptance could see a reversal in sentiment toward bluebird after its BLA filing was delayed earlier this year.
“Shares could be positioned to pop significantly higher on this news, especially given the about 25% short interest,” they wrote.
They expect lovo-cel's approval in sickle cell disease will be a key area of focus for investors going forward.
“Given the anticipated high price of commercial lovo-cel, penetration into as little as 25% of the highly motivated patients could yield sales of $2 billion, which we believe would drive meaningful upside to the valuation as shares currently trade near cash,” they wrote.
The analysts also noted that the December 20th PDUFA date puts bluebird's review timeline effectively on track with its competition Vertex/CRISPR whose PDUFA date is December 8th.
“All told, given the proximity of the December 8th and 20th PDUFA dates, we believe these two treatments are likely to launch at effectively the same time and note bluebird's existing commercial infrastructure (which is guided to be 40-50 qualified treatment centers by the end of 2023) could provide a key advantage as it relates to quickly ramping the launch,” they wrote.
As such, Baird's analysts awarded the stock an ‘Outperform’ rating and a $10 price target.
Despite the analysts’ confidence, bluebird shares haven’t taken flight yet, trading down 5.3% at US$3.32 shortly before noon on Wednesday.
Contact the author at emily.jarvie@proactiveinvestors.com
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