Bluebird Bio Retains Gene Therapy and Spins Out Oncology into Separate Company

Rare Daily Staff

Bluebird bio said it intends to separate its severe genetic disease and oncology businesses into differentiated and independent publicly traded companies with Bluebird retaining its focus on severe genetic disease and the oncology business becoming a new entity—Oncology Newco.

The company expects the separation to be completed by the end of 2021.

“After careful strategic review, it is clear to us that the two businesses are best served by independent leadership and teams to drive distinct strategic and operational objectives,” said Nick Leschly, CEO of Bluebird. “Specifically, we believe it is the right time to double down on the respective businesses to fully enable and optimize the continued innovation, development and deployment of transformative gene and cell therapies for the patients we serve.”

While Bluebird Bio has pioneered the development of gene and cell therapies for severe genetic diseases and oncology to deliver transformative outcomes for patients, it has struggled with manufacturing and commercialization issues. Its gene therapy Zynteglo was approved in Europe for the treatment of beta thalassemia in mid-2019 with a $1.8 million price tag, but manufacturing issues and the coronavirus epidemic impeded its commercialization. The company had not yet sold a single dose as of their 2020 third quarter filing. And its cell therapy for multiple myeloma, originally partnered with Celgene and now with Bristol-Myers Squibb, has been troubled by regulatory setbacks, first over manufacturing issues and more recently with a delay in approval that wiped out a $6.4 billion contingent value rights payout to Celgene shareholders at the beginning of 2021.

Shares of the company have languished after peaking in 2011 and after assessing its options, management and the board of Bluebird decided that separating the businesses “is in the best interest of patients, employees, investors and other stakeholders.”

The company says separating the divisions will enhance resource allocation and capital considerations for each company; allow for more effective therapeutic focus, streamline and simplify operations, tailor investment theses to attract appropriate shareholders, increase strategic flexibility, sustain a “patients first” culture, and better deliver on goals.

Bluebird Bio will focus on severe genetic diseases in three core areas: β-thalassemia, cerebral adrenoleukodystrophy and sickle cell disease, in the United States and Europe. The company plans to expand access and reimbursement for Zynteglo in Europe, increase addressable patient populations, and build on its expertise in gene therapy manufacturing through commercialization, significant process enhancements, and next generation technologies.

The Oncology Newco will support commercial success of its partnered cell therapy, ide-cel, in multiple myeloma and focus on advancing its pipeline of cellular therapies with a focus on non-Hodgkin’s lymphoma, acute myeloid leukemia, next-generation multiple myeloma and solid tumors, with a goal of 1-2 investigational new drugs in each of 2021 and 2022.

Upon completion of the separation, current Bluebird CEO Nick Leschly, will lead Oncology Newco as CEO and will take on the role of executive chair for Bluebird bio. Current president of the severe genetic disease business, Andrew Obenshain, the current head of the severe genetic disease division will continue his leadership as CEO of Bluebird bio. The Bluebird’s current Chairman of the Board of Directors Daniel Lynch will become chairman of the board for Oncology Newco.

Photo: Bluebird CEO Nick Leschly