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Bluebird Bio has ‘doubts’ about continuing to do business through 2022, announces CFO resignation

With two of its prized gene therapies on clinical hold and another, Zynteglo, pulled from the market in Europe seven months ago after it was approved for use, these are not the best of times for bluebird bio.

So after updating the status of lovo-cel, eli-cel and beti-cel (Zynteglo) in its fourth quarter and 2021 earnings report, bluebird illuminated its dire financial situation, saying that its cash needs “raise substantial doubt regarding its ability to continue as a going concern.”

“The company is exploring multiple financing opportunities including plans for the sale of priority review vouchers, which the company would be eligible to receive upon potential approval of beti-cel and eli-cel in 2022, while focusing on further cost efficiencies,” it added.

Additionally, in an SEC filing on Friday, bluebird disclosed the departure of chief financial officer and treasurer Gina Consylman, who will resign effective April 3. The company expects to appoint Jason Cole, bluebird’s chief business officer, to take over her duties. Cole was appointed chief business officer in November after serving as the legal chief since 2016.

The future of the company rests on the approval of these treatments, says analysts at SVB Leerink. Beti-cel is for the blood disorder beta thalassemias, while eli-cel treats the rare metabolic disorder cerebral adrenoleukodystrophy (CALD).

“Approvals of beti-cel and eli-cel are absolutely critical for bluebird’s business lifeline as sales of priority review voucher from these approvals can extend its (one-year) cash runway,” SVB’s Mani Foroohar wrote.

Bluebird said it expects its 2022 cash burn runway to be less than $400 million. It comes after reported net losses of $563 million in 2021 and $561 million in 2020.

Bluebird’s approval applications for beti-cel and eli-cel are ongoing, with target dates set for Aug. 19 and Sept. 16 of this year. The company expects FDA advisory committee discussions on both on June 9-10

“We think approval of CALD has more risk than BT given three prior cases of myelodysplastic syndrome, but we also acknowledge that the large unmet medical need may skew risk/benefit more favorably,” wrote Luca Issi of RBC Capital Markets.

As for lovo-cel, which is a treatment for sickle-cell anemia and was put on hold for patients under age 18 by the FDA in December, bluebird said it is still on track to submit an approval application in the first quarter of 2023.

Bluebird finds itself in an unusual position, according to RBC.

“We cannot think of many biotech stocks below cash with three BLAs filed/to be filed,” Issi wrote. “Execution is needed to rebuild confidence, and the balance sheet remains weak.”