bluebird bio (BLUE) PT Raised to $100 at Maxim Group
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Maxim Group analyst Jason McCarthy reiterated a Buy rating and boosted his price target on bluebird bio (NASDAQ: BLUE) to $100.00 (from $85.00), saying gene therapy may be the best option in sickle cell.
- With the only drug closing in on approval for sickle cell now off the table (Mast's vepoloxamer [MSTX - $0.11 - Hold]), we questioned what the best option is for sickle cell patients: drug therapy or a cure with gene therapy with blue's LentiGlobin (even at the cost and risk of a Bone Marrow Transplant [BMT])?
- Our initial assumption, given the perceived risk, was that LentiGlobin may be an option for only a small percentage of patients (~3%). However, we now assume that number could be much higher, closer to 10%. We spent time with patients, several of whom had undergone allogeneic stem cell transplant, and transplant doctors, and learned that the technology and safety for an allo BMT have improved so much that it's a viable option for more and more patients. These patients and doctors appear more open to gene therapy than we had originally believed, and we now see a potentially larger market opportunity in sickle cell for LentiGobin.
- Modeling changes. Our model assumes LentiGlobin may be accessible to up to 10% of sickle cell patients, an increase from our prior estimate of 3.5%. Given the larger opportunity, we have also walked pricing down to $500K, from $750K. A risk adjustment of 50% was also factored into the sickle cell model. We have also adjusted pricing in beta thalassemia to $500K, from $750K, as well as pushed out our assumptions around CAR-T to 2021, from 2019. The net result is an increase in our price target to $100, from $85.
- Drug therapy or gene therapy? Sickle cell drug development continues to struggle with only one drug approved. While many drugs are in development that may ultimately get to approval (or fail), we believe more and more patients may turn to gene therapy as a remedy.
Shares of bluebird bio closed at $69.11 yesterday.
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