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bluebird bio: Mizuho Analysts Stick to “Buy” Despite Looming Vector Shortages

bluebird bio, Inc. (BLUE) is a clinical-stage biotechnology company, which is dedicated to developing gene therapies for severe genetic diseases and cancer. Notably, gene therapy has a major advantage over other therapies, especially for incurable diseases like SCD and cancer. Currently, one of the biggest chunks of the gene-therapy market pie lies with bluebird bio. (See bluebird Dividend Date and History on TipRanks)

A slew of positive proceedings lifted the spirits of bluebird on July 28. Impressive sales of its idecabtagenevicleucel treatment for relapsed or refractory multiple myeloma — Abecma— developed in collaboration with Bristol Myers (BMY), was the highlight of the day. Moreover, the company also announced an alliance with a biopharmaceutical manufacturing and technology company, Resilience, to accelerate the development of next-generation cell therapies.

These developments come in close heels of the approval of bluebird’s gene therapy Skysona by the European Commission on July 21. Notably, Skysona is a breakthrough treatment for a rare and potentially fatal neurological disorder called adrenoleukodystrophy.

The proceedings also encouraged Mizuho managing director and analyst Difei Yang, and her associates, who reiterated a Buy rating on the stock with a price target of $70. Notably, the price target implies an upside potential of 168.8%. They discussed the data points impacting bluebird’s prospects and zeroed down on three major takeaways.

Firstly, strong demand for Abecma was reflected in the $24 million sales reported by Bristol Myers in its second-quarter 2021 results. Notably, Abecma is the only FDA approved CAR-T therapy for multiple myeloma. Interestingly, the production of Abecma has a lot of room to run once the issue of global shortage of vector is solved. This crunch is affecting the production of various multiple cell therapy products, including Abecma, creating a bottleneck due to demand surpassing supply.

Secondly, Yang is also encouraged by bluebird’s partnership with Resilience, which will bring preferred access to lentiviral vector manufacturing and considerably reduced operational expenses over the forthcoming years.

Moreover, the company will also sell its clinical and commercial suspension lentiviral vector manufacturing facility in North Carolina to Resilience, and receive an upfront payment of $110 million.

Nonetheless, the analyst also makes a note of the risks of investing in the company. She says, “Investing in clinical stage companies in the biotech and pharmaceuticals industry is speculative in nature and is only appropriate for those that have high tolerance for price volatility.”

Consensus among analysts for bluebird bio is a Moderate Buy based on 3 Buys and 8 Holds. The average bluebird price target of $50.86 implies 94% upside potential.

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.