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After securing its second approval for a gene therapy in as many months, Bluebird Bio shares earlier this week climbed 16%, from $5.93 to $6.86 on Tuesday, before declining 10% to $6.17 on Wednesday and slipping another 8% to $5.70 on Thursday. Investors appeared to cash in quick profits while awaiting future developments that are vital to the company coming back from years of clinical and commercial setbacks, according to one analyst.

Bluebird’s latest regulatory nod was an FDA Accelerated Approval following Priority Review for Skysona® (elivaldogene autotemcel)—which the company also abbreviates as “eli-cel”—a one-time treatment designed to slow the progression of neurologic dysfunction in boys 4-17 years of age with early, active cerebral adrenoleukodystrophy (CALD).

Following the accelerated approval, announced September 16 after the close of the markets, BLUE discussed its commercial strategy for launching eli-cel with analysts. The company said eli-cel will be available commercially in the fourth quarter that starts next weekend, with the first patient projected to undergo apheresis late in Q4 or early in the first quarter of 2023. The actual numbers of treated patients will be small given the ultra-rare nature of the indication, observed Mani Foroohar, MD, Senior Managing Director, Genetic Medicines, and a senior research analyst with SVB Securities.

Upon approval of eli-cel, Bluebird received a Rare Pediatric Disease Priority Review Voucher (PRV) under an FDA program designed to encourage development of treatments for children with rare and life threatening diseases. PRVs are valuable to drug developers because they can either be exercised in order to obtain a speedier priority review for a pipeline drug or biologic, in return for paying the FDA a fee ($1,266,651 in the federal fiscal year that ends September 30)—or sold to other drug developers.

Skysona is the second ex-vivo lentiviral vector (LVV) gene therapy to be approved in the U.S. The first is Bluebird’s Zynteglo® (betibeglogene autotemcel or “beti-cel”), which the FDA authorized in August as the first cell-based gene therapy for the treatment of adults and children with beta-thalassemia who require regular red blood cell transfusions, with the company also receiving a PRV.

“Critical elements” to a turnaround

“We continue to see the sale of BLUE’s awarded PRVs, and demonstration of successful launch to bend the company’s cash burn curve downward, as the critical elements of BLUE’s ongoing operational turnaround,” Foroohar wrote Monday in a research note. He kept Bluebird’s price target at $10 a share, and reiterated his firm’s “Market perform” rating on Bluebird shares.

Raymond James on Tuesday raised its price target on Bluebird from $8 to $10 a share, while maintaining its “Outperform” rating. Dane Leone, the firm’s Managing Director, Biotechnology, cited anticipated monetization of PRVs for Skysona and Zynteglo, as well as anticipation that approvals of those gene therapies will facilitate approval of the company’s third gene therapy candidate, lovotibeglogene autotemcel (“lovo-cel,” formerly called LentiGlobin® or bb1111) for sickle cell disease (SCD). Bluebird says it is on track to file a Biologics License Application (BLA) for lovo-cel in the first quarter of 2023.

Turning around Bluebird has been the priority of CEO Andrew Obenshain, who last year discussed the company’s strategy with GEN Edge. The strategy focuses on bringing to market three gene therapies for severe genetic diseases over two years, all while containing costs.

Waiting for future events was one reason why Bluebird shares didn’t rise higher, or stay higher. Another was Bluebird agreeing that in return for FDA approval of Skysona, the company will provide confirmatory long-term clinical data to the FDA.

In its announcement of the Skysona approval, bluebird said that it anticipated the long-term data would include results from the ongoing long-term follow-up study (LTF-304; NCT02698579), which will study patients treated in clinical trials for 15 years, as well as patients treated commercially with the gene therapy. Skysona previously received the FDA’s Orphan Drug, Rare Pediatric Disease, and Breakthrough Therapy designations.

For investors, anticipation of future events outweighed not only the approval of Skysona but another bit of good news Bluebird tucked inside its announcement: An earlier clinical hold on the gene therapy has been lifted. That hold was placed in August 2021 after a Suspected Unexpected Serious Adverse Reaction (SUSAR) in which a patient dosed with eli-cel developed myelodysplastic syndrome (MDS). The hold sent Bluebird shares falling 24%; two additional cases of MDS later emerged.

However, a partial clinical hold remains on lovo-cel that was placed in December, a week after updated positive data was published. “The Company remains in active dialogue with the FDA about the resolution of the partial clinical hold for patients under 18,” Bluebird stated last month, while it continues to enroll and treat patients 18 and older in a separate clinical trial, HGB-210 (NCT04293185).

Bluebird has completed enrollment of all patients in HGB-210, a study necessary to support manufacturing data requirements for the BLA submission. During Q2, the company completed manufacturing of commercial drug product validation lots, marking significant progress on CMC [chemistry manufacturing controls]  requirements and final steps to BLA submission. Bluebird’s remaining step before BLA submission is completion of vector and drug product analytical comparability, which is expected in the fourth quarter.

Also in August, Zynteglo won FDA approval as the first cell-based gene therapy for the treatment of adults and children with beta-thalassemia who require regular red blood cell transfusions. Bluebird shares rose 3%, from $6.58 to $6.78, the day of Zynteglo’s approval before falling 14% the following day, to $5.81, also on apparent profit taking.

Bluebird shares performed much better in June after an FDA advisory panel made two unanimous recommendations in the company’s favor—one each for eli-cel and beti-cel. Investors responded to those recommendations with a 71% premarket surge that shrunk into a 14.5% increase (from $3.73 to $4.27).

Setbacks and staff reduction

Those increases ended what had been months of clinical and commercial setbacks for Bluebird. In addition to the clinical hold on eli-cel and another placed on beti-cel, the company saw its stock plunge after it spun off its oncology business in November 2021. Bluebird spun off 13 oncology programs (seven clinical, six preclinical) into 2seventy bio, a public company headed by “Chief Kairos Officer” Nick Leschly, who served as Bluebird’s CEO or “chief Bluebird” from 2010 until the separation, which left the surviving Bluebird with three candidates and an R&D focus on severe genetic diseases.

Bluebird has also continued to record net losses, though its quarterly net loss shrank in the second quarter to $100.138 million, compared with $241.702 million in Q2 2021. Quarterly revenue jumped to $1.519 million, from $143,000 a year earlier. For the first half of this year, Bluebird recorded a net loss of $222.29 million, less than half the $447.51 million net loss of January–June 2021.

The reduced losses reflect a restructuring plan announced in April that has eliminated about 30% of its staff (an estimated 155 jobs) during the second and third quarters. The restructuring is designed to generate $160 million in savings over the next two years.

A month earlier, Bluebird’s Form 10-K annual report for 2021 acknowledged: “There is substantial doubt regarding our ability to continue as a going concern.” Also in March, the company’s CFO and treasurer Gina Consylman gave notice of resigning, just seven months after joining the company as CFO of its severe genetic business. Consylman was succeeded by Jason F. Cole, who advanced from being chief business officer to Bluebird’s combined chief strategy and financial officer and treasurer, and principal financial officer.

But the CFO position remains a challenge. On September 12, Bluebird announced that Cole will leave the company after his last day of October 14 “to pursue new career opportunities.​”

Cole’s management responsibilities for strategy, external affairs and operations are shifting to CEO Obenshain, while Cole’s finance responsibilities will go to Katherine Breedis, chief financial officer/interim chief financial officer consultant with Danforth Advisors, who is expected to be interim CFO. Bluebird said it has launched an external search for its next CFO, “with a focus on experience with commercial stage companies.”

Bluebird has filled another commercial role by promoting Tom Klima to chief commercial & operating officer as of August 8. Klima joined the company in May 2021 as chief commercial officer to hone the company’s commercial strategy and oversee launch execution plans for its gene therapies. According to the company, the new role reflects expanded responsibilities for Klima in program management and patient supply chain in addition to sales, marketing and market access.

Bluebird’s share price Tuesday after Skysona’s approval was down 41% than its close of $11.64 a year ago to the date. Since the start of the year (shares closed at $10.60 on January 3), the company’s shares have tumbled 42%.

SPRO: GSK deal revives shares

Spero Therapeutics (SPRO) shares on Thursday more than doubled, rising 168% from $0.822 to $2.20, after GlaxoSmithKline (GSK) paid Spero $66 million upfront and committed up to an additional $525 million tied to achieving milestones toward developing and commercializing Spero’s tebipenem pivoxil hydrobromide (tebipenem HBr). The late-stage antibiotic is being developed as the first oral carbapenem antibiotic to potentially treat complicated urinary tract infections (cUTI), including pyelonephritis, caused by certain bacteria.

GSK reasons that tebipenem HBr complements its infectious disease strategy and has what it calls a clear path to potential approval by the FDA following encouraging feedback by the agency on the design of a Phase III trial set to start in 2023.

“With their antibiotic expertise and global commercial reach, GSK is ideally positioned to launch tebipenem HBr following regulatory approval as the first oral treatment for complicated urinary tract infections, providing patients with an alternative to in-hospital intravenous therapy,” Spero CEO Ankit Mahadevia, MD, stated. “Tebipenem HBr’s potential as an at-home, oral option can potentially be of significant benefit by reducing hospital resource utilization.

GSK has secured an exclusive license to develop and commercialize tebipenem HBr in all countries except Japan and other Asian countries, rights to which will be retained by Spero partner Meiji Seika.

The GSK deal revives Spero shares, which had plunged 64% on May 3, from $5.09 to $1.85, after the company acknowledged that the Phase III data it submitted in its New Drug Application (NDA) for Tebipenem HBr “may be insufficient to support approval,” based on a late-cycle meeting with the FDA. That fear was confirmed in June, when the agency sent Spero a Complete Response Letter stating that additional clinical study would be required.

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