Update: New Patient Receiving BlueBird Gene Therapy Responding More Slowly

Updated from 10:28 am ET with analyst defense of BlueBird and stock reaction.

CAMBRIDGE, Mass. (TheStreet) -- BlueBird Bio (BLUE) shares surged higher in June on excitement over stellar responses in two patients treated with the company's experimental gene therapy for beta-thalassemia, a rare, inherited blood disorder. But on Thursday, investors learned about a third beta-thal patient treated with Bluebird's gene therapy who wasn't improving as quickly.

Bluebird shares were down 6% in early trading but have since rebounded and are now trading up over 3% to $40. The new clinical data on Bluebird's gene therapy are contained in a just-released abstract ahead of next month's American Society of Hematology (ASH) annual meeting

Beta-thalassemia (B-thal) is a disease caused by a missing or defective gene that prevents oxygen-carrying hemoglobin from functioning properly. The BlueBird therapy, known as LentiGlobin, replaces the defective gene with one that is fully functional. 

Beta-thalassemia patients suffer from chronic anemia and typically require regular and lifelong blood transfusions. Last June, Bluebird reported that following a single infusion of LentiGlobin gene therapy, two B-thal patients started producing functional hemoglobin and within 10 and 12 days, respectively, were able to halt blood transfusions. On Thursday, Bluebird said these two patients, part of a LentiGlobin study being conducted in France, remain transfusion independent. Updated information on the patients from the French study will be presented at the ASH meeting next month. 

BlueBird is also conducting a separate study of Lentiglobin in U.S. beta-thal patients. In the abstract describing this study released Thursday, treatment with a single infusion of Lentiglobin has yielded increases in functional hemoglobin over three months, but the patient still requires red blood cell transfusions. At the ASH meeting, Bluebird will present updated results on this patient plus new data on other patients starting lentiglobin therapy.

JPMorgan analyst Cory Kasimov called the initial selling of BlueBird shares this morning a "knee-jerk reaction."

"We understand that expectations are high (ok, very high), but our first read (of this VERY IMMATURE update) isn't nearly as negative as what's implied by today's early trading," Kasimov wrote to clients in a research note. "This update is really early, and the ASH data should be much more meaningful/robust. Based on our prior investor conversations, there are people hoping that LentiGlobin can almost immediately cure B-Thal pts, which just isn't realistic on a broader level. So people are selling the news today based on very high expectations, but the real event still comes in December (Mon Dec 8 th @ 3pm PT to be precise)."

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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