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Bluebird (BLUE) Up 48.2% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Bluebird Bio (BLUE). Shares have added about 48.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Bluebird due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

bluebird Q3 Earnings Top; Zynteglo, Skysona Fuel Sales

bluebird delivered a loss of 66 cents per share in the third quarter, narrower than the Zacks Consensus Estimate of a loss of 69 cents per share. The company delivered a loss of $92 per share in the year-ago quarter (excluding restructuring expenses).

The company reported revenues of $12.4 million in the third quarter, up from $0.1 million in the year-ago quarter, beating the Zacks Consensus Estimate of $11 million. The increase of $5.4 million was primarily due to product revenues from Skysona (elivaldogene autotemcel) and Zynteglo (betibeglogene autotemcel).

The FDA approved Zynteglo for the treatment of beta-thalassemia in adult and pediatric patients requiring regular red blood cell transfusions on Aug 17, 2022 and Skysona for treating early, active cerebral adrenoleukodystrophy on Sept 16, 2022.

Quarter in Detail

Research and development expenses declined 14.4% to $45.5 million due to manufacturing costs related to Skysona and Zynteglo (now included in inventory and cost of product revenues), reduced employee compensation, benefit and other headcount-related expenses and a decrease in information technology and facility-related costs in 2023.

Selling, general and administrative expenses increased 21.9% to $40.7 million in the year-ago quarter due to commercial costs driven by marketing activities for Skysona and Zynteglo in the United States.

As of Sep 30, 2023, bluebird had cash and cash equivalents, marketable securities and a restricted cash balance of approximately $227 million, down from $291 million at the end of the previous quarter. Based on current operating plans, bluebird expects its cash, cash equivalents and marketable securities, including anticipated cash flows from operations and excluding $53 million of restricted cash, to be sufficient for its planned operating expenses and capital expenditure requirements into the second quarter of 2024.

Other Updates

In June 2023, bluebird bio announced that the FDA accepted for priority review the company’s biologics license application seeking approval for gene therapy lovotibeglogene autotemcel (lovo-cel) for patients with sickle cell disease ages 12 and older. In August, the FDA communicated that an advisory committee meeting would not be scheduled for lovo-cel. The regulatory body has set a target action date of Dec 20, 2023.

In October 2023, bluebird entered into an agreement to sell a Rare Pediatric Disease Priority Review Voucher (“PRV”), if received, in connection with the potential approval of lovo-cel for sickle cell disease. Under the terms of the agreement, bluebird will receive $103 million upon closing of the sale, which is contingent upon the FDA’s approval of lovo-cel and granting of the PRV.

The priority review will shorten the FDA’s review of the application to six months from the time of filing versus a standard review timeline of 10 months. The company continues to anticipate a commercial launch in early 2024.

bluebird has made significant progress in the launch of Zynteglo with 16 patient starts (cell collections) for individuals suffering from beta-thalassemia.
The first commercial infusion for Syksona was completed in March 2023. Cell collection has been completed for six patients to be treated with Skysona. bluebird continues to anticipate 5-10 patient starts this year.   


How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted 16.23% due to these changes.

VGM Scores

Currently, Bluebird has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Bluebird has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Bluebird belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Deciphera Pharmaceuticals, Inc. (DCPH), has gained 14.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.

Deciphera Pharmaceuticals, Inc. reported revenues of $43.31 million in the last reported quarter, representing a year-over-year change of +20.4%. EPS of -$0.58 for the same period compares with -$0.55 a year ago.

Deciphera Pharmaceuticals, Inc. is expected to post a loss of $0.59 per share for the current quarter, representing a year-over-year change of +1.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.

Deciphera Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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