Goldman Sachs Sees 115% Potental Return in bluebird bio (BLUE) and Adds Stock to Conviction Buy List
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(Updated - September 15, 2016 8:43 AM EDT)
Goldman Sachs upgraded bluebird bio (NASDAQ: BLUE) from Buy to Conviction Buy with a price target of $135, implying upside of 115%. Analyst Salveen Richter thinks the stock is at a value-inflection point and he sees a "slew of catalysts."
"BLUE is entering a value-inflection point given: (1) a more potent gene therapy (Gen2) is in the clinic and we expect Gen1 vs. Gen2 data at the R&D day (Oct 13), with a full LentiGlobin update at ASH (Dec 3-6); (2) the CAR T/gene editing programs are to be unveiled; and (3) two pivotal readouts in mid-17+ result in a transition to commercial focus," said Richter.
Listing catalysts, the analyst said, "First, at the R&D day, we will see a comparison of the existing drug (Gen1) vs. Gen2 in same patient cells. We expect higher transduction efficiency (~80%-90% vs. ~40% prior) and vector copy number (2x-4x higher) to drive substantial efficacy improvements, which may be underappreciated by the Street. At ASH (December 3-6), we expect the following LentiGlobin updates: (1) betathal data from the US (204) and EU (205) studies; (2) Gen2 in-drug VCN data (207/206); and (3) SCD data (206/205), with clarity on the pivotal strategy in 2017."
Richter added, "Initial data from lead CAR T bb2121 (BCMA, a validated target, CELGpartnered) is slated for 1H17, although it could be presented at ASH. We like the megaTAL gene editing platform and expect partnerships to emerge. Pivotal gene therapies Lenti-D (CCALD) and LentiGlobin (beta-thal) are on track for mid-2017/1Q18 data with commercial preparations underway."
Shares of bluebird bio closed at $62.89 yesterday.
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