bluebird bio (BLUE) is a good biotech to look into, especially in 2021. For starters, it has already received conditional approval to sell its gene therapy treatment ZYNTEGLO in the European Union. There is a goal to treat the first patient in Germany soon and then additional patients in other European countries by the end of 2020. There is a plan to expand the European approval to include pediatric patients and those who have the β00 genotype as well.

Besides this program, there are a few other potential regulatory filings expected in 2021. This lines up several catalyst opportunities for the company and its investors. One of the potential regulatory filings include the possibility of obtaining approval for ZYNTEGLO in transfusion dependent beta-thalassemia patients in the United States. Such a filing is expected by mid 2021 (roughly Q2/Q3 of 2021). With so many catalysts and a large pipeline full of gene therapies and cell therapies, I believe it is a good buy.

ZYNTEGLO Has Several Areas Of Expansion

The European Medicines Agency (EMA) had approved ZYNTEGLO under a conditional approval for the treatment of patients 12 years of age and older with transfusion-dependent beta-thalassemia who don’t have the β00 genotype and where a hematopoietic stem cell (HSC) transplant is appropriate by a human leukocyte antigen (HLA) matched related HSC donor is not available. What makes this approval a special one? Well, it was the first regulatory-approved product from bluebird bio.

However, there are several areas whereby the company can expand to. For starters, there are ongoing talks with several other payers from other countries whereby an expansion of gene therapy treatment could be sold in. This is expected to happen more towards the end of 2020 and then leading into early 2021. The last part of the EMA expansion is to eventually incorporate additional population for ZYNTEGLO.

These include patients who have the β00 genotype and pediatric patients. Another expansion opportunity exists in targeting patients in the United States. That is, bluebird bio is seeking FDA approval of ZYNTEGLO for transfusion-dependent beta-thalassemia patients of all genotypes by mid-2021. The current projection is to possibly submit an application for FDA approval of the gene therapy for this patient population by Q2/Q3 of 2021. This sets up a crucial catalyst for investors and eventually expands ZYNTEGLO to another market.

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Two Other Regulatory Filings Provide For Additional Stock Upside

Besides ZYNTEGLO, there are two other products whereby bluebird bio expects to submit regulatory approvals for. The first involves a regulatory submission of a BLA to the FDA of Lenti-D for the treatment of patients with Cerebral Adrenoleukodystrophy (CALD). This submission is expected by mid-2021. A marketing authorization application (MAA) submission of Lenti-D for this indication is being submitted to the EMA by the end of 2020.

The other product in the pipeline that will have a regulatory filing in 2021 is Lentiglobin for the treatment of patients with sickle cell disease (SCD). Specifically, the BLA for this therapy is expected to be filed in the 2nd half of 2021. That’s because there is an ongoing study using Lentiglobin gene therapy for patients with SCD. The primary endpoint is looking at complete resolution of severe vaso-occlusive crisis (VOC) and at least 18 months of follow-up post-treatment. This is an important endpoint for the study because SCD patients experience this pain known as vaso-occlusive crisis.

Some patients may only experience VOC once a year while others can experience it every few weeks throughout the year. It is one of the key reasons why an SCD patient visits the hospital. VOC is severe because it causes patients a sharp pain. SCD involves sickle-shaped red blood cells (RBCs). The problem is that at certain times a circulation blockage occurs, which in turn causes massive pain for the patient.

If the study meets the primary endpoint then bluebird bio will be good to go in filing the BLA of Lentiglobin for SCD. There is massive potential for this product, because even the European Medicines Agency (EMA) recognizes the data generated to date with it. So much so, that the EMA granted Lentiglobin the Priority Medicines (PRIME) program. This designation is only given to companies that target an unmet medical need and the therapy has provided benefit upon early clinical data. This will speed up the review time for Lentiglobin treating patients with SCD for the European territory.

Additional Catalyst Expected Next Year

Besides a few BLA filings expected in 2021 highlighted directly above, the FDA just the other day accepted the application for review of ide-cel for the treatment of patients with multiple myeloma (MM). These are MM patients who are in dire need of a new therapy. That’s because these are patients who had gone through and failed on 3 prior therapies. This includes treatment with:

  • Immunomodulatory agent
  • Proteasome inhibitor
  • Anti-CD38 antibody

Ide-cel is a B-cell maturation antigen (BCMA) directed CAR-T. This is a win for bluebird bio and Bristol-Myers Squibb (BMY) who had difficulty at the beginning of the year with the BLA filing. The FDA declined to review the application of ide-cel for the treatment of patients with MM back in May of this year. It should be good now, because the latest submission includes additional information for the Chemistry, Manufacturing and Controls (CMC) modules outlined by the FDA back then.

This should address those issues and the FDA has guided a PDUFA date of March 27, 2021. There is a high chance for marketing approval from the FDA, not just because of the CMC issues being addressed. The highest dose of ide-cel given to MM patients resulted in a 73% overall response rate (ORR). That’s quite impressive for patients who have gone through and failed to respond to 3 prior therapies.

Financials

According to the 10-Q SEC Filing, bluebird bio had cash, cash equivalents and marketable securities of $1.60 billion. A big reason why there is so much cash on hand was because it had enacted a public offering of its common stock. It sold 9.09 million shares of its common stock at a public offering price of $55 per share. In addition, the underwriters had a 30-day option to purchase an additional 1.36 million shares of common stock at the same price. When all was said and done, bluebird bio had raised $541.5 million in net proceeds. This is a large amount of cash and it will help fund the pipeline and potentially move several programs towards commercialization. With the current pipeline, it is expected that there is more than enough cash on hand to fund operations into 2023.

Risks to Business

There are a few risks as it relates to bluebird bio. The first risk to take note of is that the expectation is to treat the first patient in Germany with ZYNTEGLO in the 2nd half of 2020. It was supposed to happen earlier this year, but because of the impact on Covid-19, this was delayed. The plan is to treat the first patient soon, but a risk to consider is that the launch may be delayed again if there are issues.

Another big risk is the latest submission of ide-cel for the treatment of patients with MM. Additional CMC information was submitted for the U.S. BLA of ide-cel for possible approval for this indication, however, there is no guarantee that it will be enough to satisfy the FDA. That’s a problem because one of the last stipulations for the Contingent Value rights for Celgene’s shareholders is that ide-cel for MM must be approved by March 31, 2021. Otherwise, none of the CVR will be received for Celgene shareholders.

Conclusion

bluebird bio offers a lot of potential as a biotech, especially in 2021 with several regulatory filings expected. Of course, any delays could cause some catalysts to be pushed up. Still, it has been able to achieve pretty good results when it comes to several of its products in the pipeline. By that, I mean the fact that it has a gene therapy pipeline dealing with rare genetic diseases on the one hand and then another type of technology dealing with cell therapy (CAR-T) against several other diseases. I think that several of the catalysts next year could provide shareholders with significant upside in the stock. With all the reasons listed above, plus several catalysts approaching in coming months, I view bluebird bio as a good buy.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I’m currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.