Bluebird Bio sees road to revival after gene-therapy misfires

Bloomberg: Bluebird Bio Inc was supposed to be different.

The Boston-area company aimed to develop gene therapies for rare conditions that traditionally require extensive, continual treatment, including brain-wasting cerebral adrenoleukodystrophy, which kills young boys, and the blood disorder beta thalassemia. Bluebird promised one-time cures.

Yet Bluebird didn’t set itself apart through science alone. The company became a buzzword in its biotech-rich hometown with help from a charismatic chief executive, Nick Leschly, who railed against pharmaceutical-industry excesses, including prices.

“We gotta all behave appropriately,” Leschly said at the 2017 Forbes Healthcare Summit. “Just because we have lifesaving treatments does not mean you can abuse the system.”

That idealism, and early success in the clinic, lured scientists to work in its labs and investors to back what looked like a sure thing. Soon, though, patients in Bluebird trials fell ill, raising questions about some of its drugs, while a clash over pricing starved it of sales.

Today, Bluebird is on the cusp of running out of money.

Chief Executive Officer Andrew Obenshain, who took over from Leschly in November, said in an interview that Bluebird’s story isn’t over. He said its issues aren’t dissimilar to challenges every drugmaker faces when going from researching medicines to trying to sell them.

“It’s not only Bluebird,” Obenshain said. “This is pretty much every biotech I’ve ever seen.”

Nonetheless, Bluebird’s recent struggles are coming to a head at a turbulent moment. A broader downturn in biotech stocks has unnerved investors, as has a knockdown pricing battle over Biogen Inc.’s controversial Alzheimer’s drug. When Bluebird warned in March that it could soon run out of cash to keep operating, it deepened a yearslong slump in its shares, which have fallen 98% from a 2018 peak. It is generating little revenue and its ranks have dwindled after numerous layoffs.

The company got some new momentum when the staff of the US Food and Drug Administration backed Bluebird’s beta thalassemia treatment in a report this week and FDA advisers gave their support to the cerebral adrenoleukodystrophy drug. The panel of advisers will review the blood disorder drug.

People who’ve watched the company’s struggle are disappointed. John Maraganore, the former CEO of Alnylam Pharmaceuticals Inc. and a onetime Bluebird board member, recalled that when data from its earliest trials was first shared, “it was one of these moments where you looked at these results and pinched yourself.”

“That’s what’s sad here: You have these remarkable scientific clinical results, and it’s been a struggle to bring them to reality,” Maraganore said in an interview.

Bluebird’s journey shows how even the most celebrated, well-funded companies can be burned by biotech’s brutal reality.

After climbing to a split-adjusted high of more than $150 in March 2018, from about $55 a year earlier, Bluebird shares began to fall. Later that year, the company was studying a gene therapy for sickle-cell disease when a patient in its trial developed myelodysplasia syndrome, or MDS, a cancer of the bone marrow. The case later progressed to acute myeloid leukemia. Bluebird concluded its treatment didn’t cause the condition.

In June 2019, European regulators authorized Bluebird’s Zynteglo for beta thalassemia, its first gene therapy to gain clearance. It looked like vindication. Leschly got the word “fly” tattooed on his wrist, and dozens of employees marked the occasion with tattoos of their own.

Then Bluebird unveiled Zynteglo’s price: $1.8 million.

Bluebird started out in 1992, amid an early wave of enthusiasm for gene therapy, under the name Genetix Pharmaceuticals. In 2010, after encouraging early trial data, it raised $35 million from well-known Boston investment firm Third Rock Ventures and other backers. Genetix soon changed its name to Bluebird and chose Leschly, a Third Rock partner, as its top executive.

Leschly, fond of jeans and sneakers, shaped Bluebird’s image. Avian language was used to refer to everything from employees — “birds” in a “flock” — to Bluebird’s Kendall Square office, dubbed the “nest.” Leschly, who declined an interview request for this article, took the title Chief Bluebird. When Bluebird shares debuted on the Nasdaq in 2013, raising $116 million, they went up 58% on their first day.