Bluebird Prices New Shares At $55, Seeks To Raise $500 Million

Bluebird Bio (BLUE) priced an offering of 9.09 million shares of its common stock at $55 each, the company said late on Monday.

The gene therapy company, which expects the offering to close on May 21, seeks to raise gross proceeds of about $500 million from the sale. Shares in Bluebird were down 0.2% at $57 in Tuesday’s pre-market trading in the U.S. after plunging 34% year-to-date.

Bluebird is also giving the underwriters a 30-day option to buy up to an additional 1.36 million shares in common stock. Goldman Sachs, BofA Securities and Cowen are acting as joint book-running managers of the offering.

Last week, Bluebird announced that its partner Bristol-Myers Squibb Co. (BMY) will pay the company $200 million to buy out future royalty obligations of its two jointly developed cancer therapies ide-cel and bb21217.

Five-star analyst Mark Breidenbach at Oppenheimer, maintained a Buy rating on the stock with a $111 price target, after meeting with Bluebird’s management.

“FDA approval of ide-cel remains a top priority for both Bluebird and its partner Bristol-Myers Squibb, especially given BMY’s investment in trials aimed at future label expansions,” Breidenbach wrote in a note to investors. “We believe bb2121 has potential for rapid development in r/r MM, and we project its commercial approval in 2021.”

Overall, Wall Street analysts are cautiously optimistic on the company’s stock. Out of 13 analysts, 10 have Buy ratings and 3 have issued Hold ratings adding up to a Moderate Buy consensus. The $99.73 average price target provides investors with 75% upside potential should the target be met in the next 12 months. (See Bluebird stock analysis on TipRanks)