Cash crunch: bluebird bio sold to PE firms for under $30mCash crunch: bluebird bio sold to PE firms for under $30m

After failing to successfully market its three approved gene therapies - Lyfgenia (lovotibeglogene autotemcel) for the treatment of sickle cell disease, Zynteglo (betibeglogene autotemcel) for beta-thalassemia, and cerebral adrenoleukodystrophy (CALD) treatment, Skysona (betibeglogene autotemcel) - bluebird has sold itself for just $3 per share.  

The deal currently sits at an equity value of around $29 million. However, there is the potential of securing an additional $6.84 per share in contingent value rights (CRV) if Carlyle and SK can increase sales of bluebird’s three gene therapies to $600 million in any 12-month period by the end of 2027.

“For private equity (PE) to be picking up an innovative biotech like bluebird is unusual, but it shows how little appetite there is for commercial-stage gene therapy companies among traditional large pharma buyers. It is somewhat reminiscent of Dendreon, which despite achieving scientific and clinical success with Provenge, was unable to become a profitable and investable company,” Daniel Chancellor, vice president of thought leadership at Norstella, told BioXconomy.

“The latest consensus forecasts from Evaluate suggest that bluebird will cross the $600 million revenue threshold with its gene therapy portfolio, albeit by 2029 and not in time for the CVR to be activated. Regardless of whether this is met or not, the purchase price is so low, and attention will be on whether these revenues can be delivered while managing costs of goods sold (COGS).”

Despite the low price tag attached to the deal, bluebird’s current CEO Andrew Obenshain said the decision to sell the firm “represents the best path forward.” He described how “as our financial challenges mounted, it became clear that securing the right strategic partner was critical to maximizing value for our stockholders and ensuring the long-term future of our therapies.”

Troublesome times

The firm has undergone a flurry of changes over the last few years in a bid to keep itself from sinking. In November last year,bluebird’s Q3 2024 earnings reported $10.6 million in net revenue, representing a decline of $12.3 million year-on-year. Moreover, in September 2024, the gene therapy developer announced its plans to cut around 25% of its workforce to reduce spending and extend its cash runway.

The firm also struggled in the European market due to pricing issues. In August 2021, bluebird announced its plans to stop operations in Europe. The company said it had encountered barriers to bringing patients therapies in Europe that have “proven to be insurmountable.”

The decision to end operations in the EU and UK came after discussions with reimbursement authorities in Europe for Zynteglo. Bluebird said it was abundantly clear that European authorities “were unwilling to recognize” the value of a potentially curative medicine.

In turn, bluebird could not continue with operations or find a partner to advance the commercialization of its gene therapies in the region. The firm also withdrew regulatory marketing authorization for Skysona from the EU and the Medicines and Healthcare products Regulatory Agency (MHRA) in the UK.

In October 2024, bluebird inked a deal with Novartis to sell the potential priority review voucher (PRV) for Lyfgenia, a sickle cell disease treatment, for $103 million. However, the US regulatory body did not grant the voucher.

The acquisition is anticipated to close in the first half of this year and upon completion of the deal, David Meek, former CEO of Mirati Therapeutics and Ipsen is expected to take the reigns as CEO of bluebird.

“Bluebird is built on an extraordinary legacy of scientific breakthroughs, and we are committed to unlocking its full potential for patients. With the backing of Carlyle and SK Capital, we will bring the capital and commercial capabilities needed to accelerate and expand patient access to bluebird’s life-changing gene therapies,” Meek said.

BioXconomy contacted bluebird for comment but was told the firm is not offering comment beyond the press release at this time.