With ASH approaching this weekend, Bluebird investors are focused on upcoming datasets in β-
thalassemia (TDT) and sickle cell disease (SCD) at ASH. A big point of emphasis will be looking at how Bluebird’s new manufacturing process will improve efficacy. Here is what Bluebird will be presenting at ASH.
TDT: HGB-204 (Northstar)
18 patients have been treated in this study, with a median follow-up of 26 months.
Of the 10 patients with the non-beta-0/beta-0 genotypes (left side of figure), 8 have been free from transfusions for median of 27.1 months. At the last study visit, these 8 patients had total hemoglobin ranging from 9.3 to 13.7 grams per deciliter with T87Q hemoglobin ranging from 3.6 to 9.6 grams per deciliter.
This data reinforces the clinical benefit from BLUE’s improved manufacturing process, which will be implemented in HB-207 (Northstar-2) study. As a result of their improved process, BLUE expects a higher proportion of patients to become free of transfusions and reach normal immunoglobulin levels.
At ASH, BLUE will provide updated Northstar-2 data on the 3 patients that were presented at EHA as well as new data on approximately 5 additional treated patients. This data will confirm how improved the new process will be.
Sickle Cell: HB- 206
Similarly, in the sickle cell indication, Bluebird will be presenting follow-up data on 2 patients on the new manufacturing and protocols.
The figure below shows the original manufacturing process (red lines) and new process (green lines).
The patients treated with new protocols (2 green lines in left graph) had higher peripheral VCN than all of the patients in original group (red lines).
On the right graph, at 3 months post-infusion, the first patient is producing 1.5 grams per deciliter of T87Q, which is higher than the results for any prior patient at that time point. At the time of the abstract submission, the T87Q value at 3 months was not available for the second patient.
The above graphs show that the modifications to the study protocol have improved drug product by improving in vivo and T87Q globin production, albeit it early and in a small sample of 2 patients. Bluebird will provide further follow-up data at ASH on the in vivo VCN and levels of T87 Q production in these 2 patients.
Bluebird’s CAR-T candidate targets B cell maturation antigen (BCMA) for relapsed multiple myeloma and is being developed together with Celgene. At ASCO, Bluebird showed that 100% of BB-2121 patients achieved an objective response. This was extremely impressive because patients were heavily pretreated (a median of 7 prior therapies) and BB-2121’s safety profile was clean.
BLUE will present follow-up data on the 21 MM patients presented at ASCO and give further updates on the initiation of a pivotal study, expected sometime in early 2018.
Although the focus on ASH will be on BB-204/206, we think BB-2121 candidate holds the most potential out of BLUE’s pipeline. We are particularly interested in seeing BLUE’s plans for non-refractory melanoma and other indications. Expect BCMA to be a post ASH value driver.
Takeaway: Although BLUE has reported promising data with new manufacturing process, valuation seems rich at $7B+.
The data Bluebird has presented in abstracts indicate that ASH should yield further positive developments. However, at $165/share, BLUE sports a $7.5B market cap. In our view, the risk/reward ratio is not compelling at these levels and the company has to present further data to grow into this valuation. We don’t suggesting buying.
In sickle cell, BLUE’s competitive threats coming from the likes of Global Blood Therapeutics (GBT) are being overlooked. Although GBT is slightly behind in development (expecting Phase 3 top-line readout 1H 2019), their promising data and lower pricing make GBT a real threat to Bluebird’s Lentiglobin. GBT’s drug will be priced significantly lower to Bluebird’s personalized gene therapy approach. Analysts are expecting GBT440 to be priced in and around $100,000, about 1/5th the price of Bluebird’s expected treatment costs.
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