Flying high as one of the world’s premier developers of gene therapies in early 2018, bluebird bio’s share price hit a dizzying $2,300 apiece.
But seven years later—after failing to build a market for its three innovative and expensive treatments—bluebird has sold itself for relative chicken feed, at just $3.00 per share.
That’s what Carlyle and SK Capital are paying for the 15-year-old Massachusetts biotech in a deal that was announced on Friday.
There is a catch. If the private equity firms can boost sales of bluebird’s three gene therapies to $600 million—over any 12-month period—by the end of 2027, it will pay an additional $6.84 per share in contingent value rights (CVR).
Carlyle and SK are taking what amounts to a $29 million gamble on a company that once was valued at more than $10 billion. If the CVR kicks in, Carlyle and SK’s purchase of bluebird works out to $96 million.
The $3.00 share price was a discount on bluebird’s $7.04 figure at market close on Thursday. Bluebird’s market cap on Thursday was $68 million. The deal will transform bluebird into a private company.
The companies said that David Meek, the former CEO at Mirati and Ipsen and currently chair of Sobi, will take the reins of bluebird upon close of the deal, which is expected in the first half of this year.
“Bluebird is built on an extraordinary legacy of scientific breakthroughs, and we are committed to unlocking its full potential for patients,” Meek said in a release. “With the backing of Carlyle and SK Capital, we will bring the capital and commercial capabilities needed to accelerate and expand patient access to bluebird’s life-changing gene therapies.”
The elements were in place for a selloff. Five months ago, bluebird revealed a plan to cut 25% of its staff. Then in November, the company said that its revenue for the third quarter was $10.6 million, which was down from $16.1 million sequentially and $12.3 million year over year.
“As our financial challenges mounted, it became clear that securing the right strategic partner was critical to maximizing value for our stockholders and ensuring the long-term future of our therapies,” bluebird CEO Andrew Obenshain said in a statement Friday. “After an extensive review process, this acquisition represents the best path forward.”
Bluebird landed the deal after meeting with more than 70 potential investors and partners over the last five months. The sale became more necessary when the FDA denied its third attempt to lasso a priority review voucher (PRV) for its sickle cell disease treatment Lyfgenia, the company said.
In October of 2023, bluebird announced that it had signed a deal with Novartis to sell the potential PRV for $103 million. But the voucher was never granted by the U.S. regulator despite providing one for Vertex and CRISPR Therapeutics’ development of their sickle cell disease gene therapy Casgevy.
Bluebird’s difficulties with commercializing its gene therapies began in Europe, where it was unable to reach a consensus with regulators on a fair price for treats transfusion-dependent beta-thalassemia treatment Zynteglo.
In August of 2021, the company pulled up its stakes in Europe, with Obenshain calling the market “broken” and the situation “untenable for a small innovative company at this time.”
With a more favorable market in the U.S., bluebird expected sales to increase rapidly for Zyntaglo and Skysona, which were approved by the FDA a month apart in 2022 and were priced at $2.8 million and $3 million respectively.
Then in December of 2023, the nod for Lyfgenia was expected to be a game-changer as it was for a much larger patient population. While bluebird priced Lyfgenia at $3.1 million, Vertex priced Casgevy at $2.2 million.
But the company struggled to build a market. In November, bluebird said it had just 57 patient starts, including 35 for Zynteglo, 17 for Lyfgenia and 5 for Skysona. Of the more than 70 treatment centers activated by bluebird, just 40% had initiated treatment for at least one patient.