Nick Leschly, Bluebird Bio’s CEO or “chief bluebird”

Bluebird Bio saw its share price plunge by more than one-third after temporarily and voluntarily suspending two clinical trials assessing its LentiGlobin gene therapy for sickle cell disease (SCD; bb1111), following reports that two participants in the earlier-phase study developed blood cancers—one of acute myeloid leukemia (AML), the other of myelodysplastic syndrome (MDS).

The temporary suspensions affect the Phase I/II HGB-206 trial (NCT02140554), an ongoing, open-label study designed to evaluate the efficacy and safety of LentiGlobin gene therapy for SCD; and the Phase III HGB-210 trial (NCT04293185), an ongoing single-arm open-label study designed to evaluate the efficacy and safety of LentiGlobin in patients between two years and 50 years of age with SCD.

Bluebird Bio said it placed the trials on temporary suspensions after receiving a report last week that a patient who was treated “more than five years ago” in Group A of HGB-206 was diagnosed with AML. The company said it was investigating the cause of the patient’s AML to determine if there is any relationship to the use of its BB305 lentiviral vector in manufacturing LentiGlobin gene therapy for SCD.

Bluebird also acknowledged that it is investigating a second Suspected Unexpected Serious Adverse Reactions (SUSAR) of MDS in a patient from Group C of HGB-206 that was reported last week to the company. The first occurred to a patent who was later found to carry a classic driver mutation that was believed to be the cause of the cancer—and whose unhealthy blood cells showed no sign of Bluebird’s vector.

In addition, Bluebird also temporarily suspended marketing of its authorized gene therapy Zynteglo™ (betibeglogene autotemcel) in Europe and the U.K., while the AML case is under review because it is also manufactured using the same BB305 lentiviral vector used in LentiGlobin gene therapy for SCD.

The company emphasized, however, that no cases of hematologic malignancy had been reported in any patient who has received treatment with Zynteglo for transfusion-dependent β-thalassemia.

“Key questions”

“The key questions we need to answer now are around the origin and drivers of each of these events. There are multiple possible explanations,” Nick Leschly, Bluebird Bio’s CEO or “chief bluebird,” told analysts on a conference call.

Among possible explanations offered by Leschly:

  • Spontaneous genetic mutation
  • The second MDS patient was shown to have trisomy 8, found in 10–15% of MDS patients; cytogenetic results for the AML patient were pending.
  • The nature of patients’ SCD or treatment history, and/or aspects of their treatment protocol.
  • Insertional oncogenesis or vector-mediated malignancy

LentiGlobin uses a self-inactivating (SIN) lentiviral vector with a lineage-specific promoter that according to Bluebird was specifically designed to minimize the risk of insertional oncogenesis.

“No evidence of insertional oncogenesis related to lentiviral vector-based hematopoietic stem cell gene therapy has been reported in any indication thus far. However, this remains an area of inquiry,” Leschly told analysts.

“For the MDS case, we do not yet know if the tumor cells are carrying a vector sequence. For the AML case, we have been able to detect vector in these cells, but do not yet have sufficient information to determine causality,” Leschly continued. “Specifically, is the BB305 lentiviral integration event a contributor to disease, or simply a pathogen to a cell that has acquired a malignant phenotype via means that remain to be determined? This is the question, and this is the heart of the research plan that is ongoing.”

Preliminary answers, he added, are expected within weeks.

Investors responded quickly to news of the clinical setbacks, with a stock selloff that sent Bluebird shares tumbling nearly 38% yesterday, to $28.44 from $45.76 at Monday’s close. But in after-hours trading last night, Bluebird shares inched up 3% to $29.40 as of 7:14 p.m.

“At the moment, it is pivotal for BLUE to prove insertional oncogenesis is irrelevant with Lentiviral Vector (LVV) used in the manufacture of LentiGlobin,” Biren Amin, equity analyst with Jefferies, commented last night in a research note.

“A positive” for competitors

Michael J. Yee, also an equity analyst with Jefferies, and four colleagues separately observed that at least one pair of competitors can expect to benefit from Bluebird Bio’s clinical setbacks—CRISPR Therapeutics and Vertex Pharmaceuticals, whose CRISPR-Cas9 gene-edited therapy candidate CTX001 last month showed positive results in a patient with SCD and a patient with transfusion-dependent β-thalassemia (TDT), according to data from a pair of Phase I/II trials that was published in The New England Journal of Medicine.

“This may be a positive for VRTX/CRSP because it may open up a broader commercial opportunity based on better efficacy, durability, and safety for gene editing vs. lentivirus approaches,” Yee and colleagues wrote.

That was not apparent from the companies’ stock prices. Shares of CRISPR Therapeutics fell about 4% yesterday, to $155.32 from $161.05 at Monday’s close. Vertex shares dipped nearly 2% to $210.27 a share from $213.98 on Monday.

Yee and colleagues countered that the CRISPR/Vertex gene editing technology offered a key advantage over Bluebird’s lentiviral approach: “In the big picture, the key differentiation for gene editing vs. lentivirus approaches is that with gene editing, the edit (or change) is targeted to an exact location vs. lentiviral approaches, where the integration is more random.”

“On balance, safety issues with new innovative therapies like gene therapy could cause some consternation in the patient community,” Yee and colleagues added. “To be clear, issues with lentivirus-based gene therapies have the potential to be disruptive for the entire field of gene therapy/gene editing, as it may cause patients to be more cautious about trying new therapies.”

Another competing SCD drug developer is Global Blood Therapeutics, which has yet to report fourth-quarter and full-year 2020 results. During Q3 2020, GBT reported $36.9 million in quarterly revenue for its Oxbryta® (voxelotor) tablets, falling short of a Wall Street consensus forecast of $44 million, with more than 1,000 new patient prescriptions, just above the under-1,000 mark of Q2, as COVID-19 reduced patient interactions with physicians.

“While there appears to be a lot of variability as the pandemic continues, we anticipate this trend to continue in Q4 and into 2021, though we still estimate continued NRxs [new patient prescriptions] and strong refill trends will result in some growth in Q4 Oxbryta sales relative to Q3,” Ritu Baral, managing director, health care-biotechnology at Cowen, wrote in a November research note.

“Incremental commercial risk”

Mani Foroohar, MD, managing director, genetic medicines and a senior research analyst with SVB Leerink, wrote in a research note that the clinical setbacks will also likely delay Bluebird’s development and commercialization plans for LentiGlobin in SCD.

“Given the seriousness of these reported events, we believe it is likely commercialization timelines will be extended beyond our currently modeled 2022 for β-thalassemia and 2024 for SCD, and we see incremental commercial risk as clinicians, patients, and regulators digest the uncertainty introduced by today’s tragic news,” Foroohar wrote.

Citing regulatory uncertainty wrought by the clinical setbacks, SVB Leerink pushed back its projected commercialization date by one year for both sickle cell disease and beta-thalassemia: “We now project first commercial Zynteglo β-thalassemia revenue from Germany in 2022, US β-thalassemia commercialization in 2023, and US SCD commercialization in 2025.”

The firm also lowered its projected penetration for LentiGlobin by 25% across all indications to account for an increase in perceived risk from malignancies, and decreased the probability of success in β-thalassemia and SCD from 90% to 75% to reflect uncertainty regarding feedback from regulators.

SVB Leerink has lowered its one-year price target for Bluebird shares by 30%, from $99 to $69 a share—the firm’s second cut in its price target for Bluebird in three months. Back on November 5, SVB Leerink cut its price target from $133 a share.

Also cutting their price targets for Bluebird Bio:

  • Mizuho—from $123 to $34, down 72%, remaining at “neutral.”
  • Wedbush—from $73 to $29, down 60%, with a downgrade from “outperform” to “neutral.”
  • Bank of America—from $79 to $40, down 49%, with a downgrade from “buy” to “neutral.”
  • Piper Sandler—from $55 to $35, down 36%, with a downgrade from “buy” to “neutral.”

Also downgrading Bluebird Bio shares were Oppenheimer (from “outperform” to “perform”), and William Blair (from “outperform” to “market perform”).

Bluebird’s LentiGlobin gene therapy for SCD is in a clinical development program that consists of three studies: HGB-206, HGB-210, and another Phase I/II study, HGB-205 study (NCT02151526). Bluebird is also conducting a long-term safety and efficacy follow-up study (LTF-307; NCT04628585) for people who have participated in Bluebird Bio-sponsored clinical studies of LentiGlobin for SCD.

Addressing analysts yesterday, Leschly urged them and others to “resist the temptation to draw premature conclusions, and let the rapidly emerging data lead the way.

“This is about the lives of patients,” Leschly said. “There’s nothing more important to us than the safety of each and every one of the patients who have been involved in our clinical studies, and received our gene therapies.”

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