Bluebird Bio announced on Friday that it will sell itself to private equity firms Carlyle and SK Capital for about $30 million, marking the end of its journey from a high-flying biotech firm to a company on the brink of insolvency.
Details of the Acquisition
Shareholders will receive $3 per share with the potential of earning an additional $6.84 per share if Bluebird’s gene therapies reach $600 million in sales within any 12-month period by the end of 2027. Bluebird’s shares closed at $7.04 on Thursday but plunged 40% following the announcement of the sale.
Rise and Fall of Bluebird Bio
For over three decades, Bluebird Bio was at the forefront of developing one-time treatments for genetic diseases. At its peak, the company’s market cap reached $9 billion, fueled by investor confidence in its innovative gene therapies. However, today its valuation has dropped below $41 million due to scientific setbacks, financial difficulties, and the spin-off of its cancer treatment division into a separate company, 2Seventy Bio.
Challenges and Setbacks
The turning point for Bluebird came in 2018 when it reported that a patient treated with its sickle-cell disease gene therapy developed cancer. Although Bluebird concluded that its treatment was not the cause, safety concerns about DNA-altering therapies grew.
Additionally, the company faced pricing pushback in Europe for its beta thalassemia treatment, Zynteglo, priced at $1.8 million per patient. This led to its withdrawal from the European market in 2021, with the company focusing solely on the U.S. market.
Regulatory Approvals but Financial Woes
Bluebird secured U.S. approval for three gene therapies: Zynteglo for beta thalassemia, Lyfgenia for sickle cell disease, and Skysona for cerebral adrenoleukodystrophy. Despite these regulatory wins, the company struggled financially, spending hundreds of millions annually without adequate revenue streams.
Divesting its cancer treatments to 2Seventy Bio also cut off a significant source of income. In its last financial update, Bluebird reported enough cash to fund operations only through Q1 2025, underscoring its financial instability.
Gene Therapy Industry Challenges
The broader gene therapy industry faces similar hurdles in turning revolutionary treatments into profitable businesses. Vertex’s competing sickle cell therapy, Casgevy, has seen slow adoption, while Pfizer recently ceased sales of a hemophilia gene therapy due to weak demand.
The End of an Era
Bluebird’s sale for $30 million is a stark contrast to its once lofty valuation and the $80 million that former CEO Nick Leschly made from selling his shares. Despite the company’s financial collapse, its gene therapies continue to offer transformative benefits to patients, highlighting the potential of its groundbreaking work even as the company’s business model falters.
