Bluebird Bio goes private in US $29M deal with Carlyle, SK Capital

USA – After 12 years as a publicly traded company, gene therapy firm Bluebird Bio is being sold to private equity firms Carlyle and SK Capital Partners for US $29 million.

This is less than half of its current value and only a small fraction of its former US $9 billion peak market capitalization.

The US $3-per-share deal follows the company’s struggle to stay financially stable, with default risks looming. Bluebird called the sale “the only viable solution to generate value for stockholders.”

Hope for future payouts?

Although the deal seems like a major loss, shareholders might still get additional payouts in the future.

The agreement includes a contingent value right (CVR) worth US $6.84 per share, linked to the company’s gene therapy treatments for sickle cell disease, beta-thalassemia, and cerebral adrenoleukodystrophy (CALD).

However, these payouts will only be triggered if the therapies reach US $600 million in sales before December 2027—a goal that appears difficult to achieve.

For now, Bluebird expects its 2024 revenue to be around US $70 million, which highlights the challenges gene therapy companies face in securing insurance reimbursements for their expensive, one-time treatments.

Struggles with commercial sales

In its third-quarter results, Bluebird revealed that only 57 patients had started treatment with its therapies:

• 35 patients received Zynteglo (betibeglogene autotemcel) for beta-thalassemia
• 17 patients were treated with Lyfgenia (lovotibeglogene autotemcel) for sickle cell disease
• 5 patients received Skysona (elivaldogene autotemcel) for CALD

Given the slow adoption rate, analysts at William Blair predict that the three therapies will generate less than US $550 million in sales by 2027, making it unlikely that shareholders will benefit from the CVR contingency.

New leadership and future plans

With Bluebird going private, David Meek will take over as CEO. Meek, who previously led Mirati Therapeutics before its US $5.8 billion acquisition by Bristol Myers Squibb, has also served as CEO of Ipsen.

Bluebird stated that Carlyle and SK Capital will provide the necessary funding to expand the commercial reach of its gene therapies.

The private equity firms are expected to offer both financial backing and commercial expertise to help boost patient access. The deal is set to finalize in the first half of this year.

FDA setback contributed to Bluebird’s downfall

One of the key factors that pushed Bluebird toward this sale was its failed attempt to secure a priority review voucher (PRV) from the FDA for Lyfgenia.

The company had previously sold two PRVs for US $100 million each and had already lined up a buyer for a third—only for the FDA to reject its request.

This setback eliminated a crucial source of potential funding, adding to the company’s financial struggles.

Despite these challenges, David Meek remains optimistic about the company’s future. He stated,
“Bluebird is built on an extraordinary legacy of scientific breakthroughs, and we are committed to unlocking its full potential for patients.”