With the pricing situation 'untenable' in Europe, Bluebird will wind down its operations in the 'broken' market

Bluebird Bio CEO snares $24 million pay package as gene therapy advance
In April, Bluebird stopped marketing its blood disorder treatment Zynteglo in Germany, unable to come to an agreement on its price. Four months later, the company announced its plan to wind down operations in Europe. (Bluebird Bio)

Unable to reach a consensus with authorities in Europe around fair gene therapy pricing, bluebird bio will “wind down” its operations there to focus on business in the United States.

Citing the challenges of “achieving appropriate value recognition and market access” for its blood disorder treatment Zynteglo, bluebird president Andrew Obenshain called the situation “untenable for a small innovative company at this time.”

“European players have not yet evolved their approach to gene therapy in a way that can recognize the innovation and the expected life-long benefit of these products,” Obenshain said in a release.

Bluebird said the wind down will be complete by the end of the year.

“There is an element of the European system that’s frankly broken,” CEO Nick Leschly said in a conference call with analysts on Monday. “At this point, we had to make this move for the company.”

In April, bluebird said that it had pulled Zynteglo from the German market after failing to come to an agreement on its price. After winning approval for the drug in Europe in June 2019, the company set a price of $1.8 million on the one-time treatment for beta-thalassemia. Manufacturing problems pushed the launch for Zynteglo back to January of this year. 

“There wasn’t one smoking gun from one country,” Obenshain said in the conference call. “There were multiple conversations going on across Europe. We had gotten far enough in multiple countries to see that the value recognition we were achieving in those countries was not going to be sufficient overall.”

While bluebird has decided it's in its best interest to leave Europe, another gene therapy player is seeing some success there. Novartis reported $315 million in second-quarter sales for its spinal muscular atrophy gene therapy Zolgensma, a 48% increase at constant currencies. The company attributed the growth in part to "expanding access in Europe." 

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The European setback wasn't bluebird's only piece of bad news on Monday. Less than three weeks after gaining approval in Europe for Skysona, the first gene therapy for the rare neuromuscular disease cerebral adrenoleukodystrophy (CALD), the FDA has put testing of the treatment on hold for safety concerns.

Bluebird received a report of myelodysplastic syndrome (MDS) in a patient who was treated with the product more than a year ago in a phase 3 study. MDS is a blood disorder that can lead to leukemia. 

Bluebird said the condition was likely brought on by Lenti-D lentiviral vector (LVV) insertion and that design features of the LVV likely contributed to the event.

As a result of all the news, the company’s shares tumbled 25% on Monday morning.

Bluebird said that it doesn’t expect the FDA hold to impact its other programs. Pending resolution of the pause, the company said it expects to submit its rolling application for the treatment, also known as eli-cel, to the FDA by the end of this year.

The safety setback comes after bluebird worked through a blood cancer scare for Zynteglo, which emerged in testing for the drug against sickle cell. After an investigation of the viral vector used to produce Zynteglo, the drug was exonerated and relaunched in Europe.      

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Bluebird’s chief scientific officer Philip Gregory said that the company hopes for a similar finding for Skysona, though he said there are key differences between the vectors.

“The promoter used in the ALD program was designed for broad-tissue expression and high levels of expression across all cell types,” Gregory said. “By contrast the (sickle cell) vector is designed for tissue-specific expression only in those cells that will drive towards red blood cells. And that’s a very important distinction.”