Biotechnology company Bluebird Bio, Inc. (NASDAQ: BLUE) received FDA approval for its gene therapy, called Zynteglo, for the treatment of beta-thalassemia in adult and pediatric patients. The treatment is possibly a cure for a rare drug disorder. In response to the FDA approval, the stock price has been climbing.
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Subsequently, the company revealed elaborate plans to enable rapid and affordable access to Zynteglo across the country.
One-Time and Cost-Effective Gene Therapy for Thalassemia Patients
Unlike standard norms, where patients with transfusion-dependent beta-thalassemia require red blood cell (RBC) transfusions every two to five weeks, Zynteglo is a one-time therapy. Although the treatment costs of $2.8 million a pop, this is a much lower cost than the bill of about $6.4 million required for standard treatments.
Additionally, to make the availability of the treatment more attractive for payers, Bluebird has come up with an outcomes-based agreement. Under this agreement, Bluebird will reimburse contracted commercial and government payers up to 80% of the cost of the therapy if a patient fails to achieve and maintain transfusion independence up to two years following infusion.
Hedge Funds Remain Confident About the Stock
Hedge funds have been optimistic about the company’s stock lately.
TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in BLUE is currently Very Positive. Moreover, the cumulative change in holdings across the five hedge funds that were active in the last quarter was an increase of 968,700 shares.
Is BLUE a Good Investment?
Overall, the consensus among analysts for Bluebird Bio stock is a Hold, based on one Buy, four Holds, and two Sells. The average BLUE stock price prediction of $6 implies a downside potential of 11.5% from current levels. Shares have declined 42.1% over the past year, but this is likely to drastically change upon the FDA news.
Final Thoughts
Gaining approval for its gene therapy gives Bluebird status of producing the only FDA-approved gene therapy for people with beta-thalassemia. Although a patient size of about 1,300-1,500 may not be much, Bluebird can build upon this success to address its declining topline and profitability issues.
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