Bluebird Bio, an organization that steered three gene therapies to FDA approval however struggled to commercialize them, has discovered the money IT must put these therapies on stronger monetary footing by reaching a deal to promote itself to 2 personal fairness corporations for about $29 million.
Carlyle and SK Capital Companions have agreed to pay $3 in money for every share of Bluebird, the biotech introduced Friday. That value is a 57% low cost to the corporate’s closing inventory value Thursday. The deal is closely backloaded. Bluebird shareholders may obtain $66.8 million extra, however provided that the corporate’s gene therapies obtain a specified gross sales objective.
When the deal closes, Bluebird shall be led by new CEO David Meek, whose trade expertise contains the chief government roles at Mirati Therapeutics and Ipsen. Bluebird mentioned Carlyle and SK Capital will present the biotech with the first capital to scale the industrial supply of its gene therapies, dear one-time remedies that provide sufferers a possible treatment.
Whereas Bluebird has been producing income from its FDA-approved gene therapies, IT has additionally relied closely on a selected monetary car to cowl bills, such because the manufacturing of those complicated therapies. The 2022 FDA approvals of Zynteglo, for the rare blood disorder beta thalassemia, and Skysona, for the ultra-rare neurological disease cerebral adrenoleukodystrophy, every got here with a precedence overview voucher. These vouchers are usually awarded to a brand new remedy that’s first to deal with a uncommon illness. The voucher program was meant to encourage extra uncommon illness drug R&D, and corporations awarded PRVs could apply them towards speedier FDA overview of a future uncommon illness remedy. Nevertheless, biotechs usually view these vouchers as non-dilutive financing that’s monetized by promoting them to massive pharma firms at costs topping $100 million.
Bluebird discovered consumers for the PRVs awarded for the Zynteglo and Skysona approvals. However the 2023 FDA approval of Lyfgenia in sickle cell illness didn’t include a voucher. That approval was introduced concurrent with the regulatory nod for Casgevy, a Vertex Pharmaceuticals gene therapy for a similar indication. Casgevy’s approval did include a PRV. Monetary analysts who comply with Bluebird famous that missing a voucher to monetize would make commercialization of Lyfgenia difficult.
In 2024, Bluebird entered a sequence of debt agreements to assist its operations. The corporate additionally appealed the FDA denial of a PRV for Lyfgenia. The company denied the biotech’s appeals thrice. Final September, Bluebird applied a restructuring that reduce 94 staff, representing about 25% of its workforce. As of the tip of the third quarter of 2024, Bluebird reported its money place was $70.7 million. The corporate projected IT would manage to pay for to final into the primary quarter of 2025. The dwindling money put the corporate prone to defaulting on its loans.
Bluebird mentioned Friday that the sale settlement follows a complete overview that included assembly with greater than 70 potential traders and companions over the course of 5 months. The board of administrators decided that and not using a vital infusion of capital, Bluebird was prone to Loan default, leaving acquisition by Carlyle and SK Capital as “the one viable resolution to generate worth for stockholders.”
“After an intensive overview course of, this acquisition represents the very best path ahead — maximizing worth for stockholders and bringing vital capital, industrial experience, and a dedication to supply extra sufferers the chance to learn from probably transformative gene therapies,” present Bluebird CEO Andrew Obenshain mentioned in a ready assertion.
Past the upfront cost, Bluebird shareholders may obtain $6.84 extra per share beneath a contingent worth proper (CVR) included within the settlement. Shareholders will get that money if the corporate’s gene therapies obtain $600 million in internet gross sales in any 12 consecutive month interval as much as the tip of 2027.
To William Blair analyst Sami Corwin, the chance of Bluebird reaching the CVR income objective is low. In a word despatched to traders, Corwin mentioned her agency fashions Bluebird internet gross sales of $282.9 million for this yr, $409.4 million for 2026, and $546.4 million for 2027. She mentioned Bluebird’s dwindling money and distance from profitability made a transition away from the general public markets doubtless inevitable. However she additionally famous the hefty low cost of the acquisition value, which led to the inventory buying and selling down about 40% following the announcement of the deal.
The Bluebird acquisition, which nonetheless wants the customary approvals, is predicted to shut within the first half of this yr. When the transaction is full, Bluebird shares will now not be publicly traded.
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