Bluebird Bio (BLUE) said Monday the Food and Drug Administration paused one of its gene therapy studies due to safety concerns, and BLUE stock collapsed.
The drug isn’t approved in the U.S., though sells in Europe under the name Skysona. It treats a rare metabolic disorder known as cerebral adrenoleukodystrophy, or CALD.
The biotech company also reported a wider-than-expected second-quarter loss and revenue that came in short of analysts’ expectations. The company reported a per-share loss of $3.58 and $7.5 million in sales. Losses widened year over year and sales tumbled.
On today’s stock market, BLUE stock plummeted 27.5% to 18.16.
BLUE Stock Plummets On Clinical Hold
A patient who received the Skysona gene therapy — also known as Lenti-D — was later diagnosed with a form of cancer called myelodysplastic syndrome.
Bluebird uses what’s known as a viral vector to insert the gene therapy into patients. A viral vector is an “empty” and non-harmful virus. Evidence suggests the design of the viral vector contributed to the patient’s cancer, Bluebird said in a news release.
“Given what we know, we remain confident that (Lenti-D) can offer hope for patients and families impacted by this devastating disease who have very few treatment options,” Chief Executive Nick Leschly said in a written statement.
The company said it expects to resolve the clinical hold “as soon as possible.” But BLUE stock fell in massive volume.
Bluebird To Exit Europe
Meanwhile, Bluebird confirmed its plans to separate into two distinct biotech companies: Bluebird and 2Seventy Bio. The separation will take place in the fourth quarter.
Then, Bluebird said it also plans to pull out of Europe. In addition to Skysona gene therapy for CALD, Bluebird also sells Zynteglo, a treatment for beta thalassemia, in Europe. Bluebird says it’s planning to focus on the U.S. But the U.S. is behind Europe in terms of gene therapy approvals.
“While European regulators have been innovative partners in supporting accelerated regulatory paths for these therapies, European payers have not yet evolved their approach to gene therapy in a way that can recognize the innovation and the expected lifelong benefit of these products,” Andrew Obenshain, Bluebird’s president of severe genetic diseases, said in a written statement.
The company said it’s hoping to find a potential partner in Europe to license its gene therapies.
The news Monday took BLUE stock to a seven-year low.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
YOU MAY ALSO LIKE: