Bluebird Bio, a company that steered three gene therapies to FDA approval but struggled to commercialize them, has found the cash it needs to put those therapies on stronger financial footing by reaching a deal to sell itself to two private equity firms for about $29 million.
Carlyle and SK Capital Partners have agreed to pay $3 in cash for each share of Bluebird, the biotech announced Friday. That price is a 57% discount to the company’s closing stock price Thursday. The deal is heavily backloaded. Bluebird shareholders could receive $66.8 million more, but only if the company’s gene therapies achieve a specified sales goal.
When the deal closes, Bluebird will be led by new CEO David Meek, whose industry experience includes the chief executive roles at Mirati Therapeutics and Ipsen. Bluebird said Carlyle and SK Capital will provide the biotech with the primary capital to scale the commercial delivery of its gene therapies, pricey one-time treatments that offer patients a potential cure.
While Bluebird has been generating revenue from its FDA-approved gene therapies, it has also relied heavily on a particular financial vehicle to cover expenses, such as the manufacturing of these complex therapies. The 2022 FDA approvals of Zynteglo, for the rare blood disorder beta thalassemia, and Skysona, for the ultra-rare neurological disease cerebral adrenoleukodystrophy, each came with a priority review voucher. These vouchers are typically awarded to a new therapy that is first to treat a rare disease. The voucher program was intended to encourage more rare disease drug R&D, and companies awarded PRVs may apply them toward speedier FDA review of a future rare disease therapy. However, biotechs typically view these vouchers as non-dilutive financing that’s monetized by selling them to big pharma companies at prices topping $100 million.
Bluebird found buyers for the PRVs awarded for the Zynteglo and Skysona approvals. But the 2023 FDA approval of Lyfgenia in sickle cell disease did not come with a voucher. That approval was announced concurrent with the regulatory nod for Casgevy, a Vertex Pharmaceuticals gene therapy for the same indication. Casgevy’s approval did come with a PRV. Financial analysts who follow Bluebird noted that lacking a voucher to monetize would make commercialization of Lyfgenia challenging.
In 2024, Bluebird entered a series of debt agreements to support its operations. The company also appealed the FDA denial of a PRV for Lyfgenia. The agency denied the biotech’s appeals three times. Last September, Bluebird implemented a restructuring that cut 94 employees, representing about 25% of its workforce. As of the end of the third quarter of 2024, Bluebird reported its cash position was $70.7 million. The company projected it would have enough money to last into the first quarter of 2025. The dwindling cash put the company at risk of defaulting on its loans.
Bluebird said Friday that the sale agreement follows a comprehensive review that included meeting with more than 70 potential investors and partners over the course of five months. The board of directors determined that without a significant infusion of capital, Bluebird was at risk of loan default, leaving acquisition by Carlyle and SK Capital as “the only viable solution to generate value for stockholders.”
“After an extensive review process, this acquisition represents the best path forward — maximizing value for stockholders and bringing significant capital, commercial expertise, and a commitment to provide more patients the opportunity to benefit from potentially transformative gene therapies,” current Bluebird CEO Andrew Obenshain said in a prepared statement.
Beyond the upfront payment, Bluebird shareholders could receive $6.84 more per share under a contingent value right (CVR) included in the agreement. Shareholders will get that cash if the company’s gene therapies achieve $600 million in net sales in any 12 consecutive month period up to the end of 2027.
To William Blair analyst Sami Corwin, the probability of Bluebird achieving the CVR revenue goal is low. In a note sent to investors, Corwin said her firm models Bluebird net sales of $282.9 million for this year, $409.4 million for 2026, and $546.4 million for 2027. She said Bluebird’s dwindling cash and distance from profitability made a transition away from the public markets likely inevitable. But she also noted the hefty discount of the acquisition price, which led to the stock trading down about 40% following the announcement of the deal.
The Bluebird acquisition, which still needs the customary approvals, is expected to close in the first half of this year. When the transaction is complete, Bluebird shares will no longer be publicly traded.
Pfizer’s Gene Therapy Pullback Continues With Termination of Beqvez
Bluebird Bio isn’t the only company with gene therapy commercialization challenges. Pfizer is discontinuing development and commercialization of hemophilia B gene therapy Beqvez less than a year after it landed FDA approval.
In a statement to Nikkei Asia, which was first to report the development Thursday, Pfizer cited limited interest from patients and physicians. That tracks with the experiences of CSL Behring, which markets the hemophilia B gene therapy Hemgenix, and BioMarin Pharmaceutical, maker of the hemophilia A gene therapy Roctavian. Pfizer’s discontinuation of Beqvez comes two months after the pharma giant gave Sangamo Therapeutics a termination notice for the partnership on a hemophilia A gene therapy that was being prepared for an FDA submission.
Pfizer has been culling gene therapy from its portfolio and pipeline. In 2023, the pharma giant sold its preclinical gene therapies to Alexion, the rare disease subsidiary of AstraZeneca. Last summer, Pfizer announced the discontinuation of its gene therapy for Duchenne muscular dystrophy, a move that followed a Phase 3 failure.
Hemophilia patients still have treatment options. Infusions of clotting proteins and regular dosing of certain drugs may be chronic therapies, but patients are familiar with them and apparently, comfortable continuing with them rather than opting for the expensive but one-time treatment from gene therapy. Despite Pfizer’s pullback from gene therapies for hemophilias, the company still has a presence in these blood disorders. Last October, the FDA approved Hympavzi, a once-weekly injectable antibody drug that Pfizer developed as a treatment for both hemophilia A and B.
Photo: crazydiva, Getty Images
