bluebird bio Inc (NASDAQ:BLUE) shares shed more than 11% on Friday after the Massachusetts-based biotech company developing gene therapies for severe genetic diseases was downgraded by Bank of America analysts.
The analysts downgraded the company to ‘Neutral’ and lowered their price target to $0.50 from $3 on their belief its key product launch, Lyfgenia for sick cell disease (SCD), will ramp slower and achieve lower peak revenue.
This comes after the company’s two approved gene therapies Zynteglo and Skysona posted $11 million in third quarter sales, down 34% quarter-over-quarter attributed to phasing.
The company guided a rebound in sales in the fourth quarter to $25 million, below the consensus, and 74 patient starts in fiscal 2024, below their previous guidance of 85.
“Per Bluebird, expectations for Lyfgenia launch into SCD is expected to mirror marketed gene therapy, Zynteglo, where a lengthier sickle cell physician education/patient readiness process that will be offset by a larger addressable population,” analysts wrote.
Bank of America’s analysts cut their Lyfgenia sales forecasts by about 6% to 18% in the 2025 to 2028 timeframe and reduced their peak to $540 million, from $730 million prior.
“Ultimately, while Zynteglo and Skysona launches continue to demonstrate modest growth (annually), we are cautious on the SCD peak sales opportunity,” they wrote.
Their updated price objective of $0.50 reflects some of the inherent market challenges and assumes dilution for the bridge financing required to extend the company’s runway beyond the first quarter of 2025.
It also accounts for caution around bluebird’s ability to reach 40 drug deliveries by quarter by the second half of 2025.
Shares of bluebird bio traded hands at $0.32 in the early afternoon on Friday.