Bluebird bio reported Wednesday that just four patients have started the process for receiving its sickle cell therapy Lyfgenia, endangering a $50 million loan that the pioneering yet cash-strapped company needs to fund its operations.
Because of the slower-than-expected uptake, bluebird said it has renegotiated terms of a loan from Hercules Capital, part of which was set up as two $25 million tranches that were accessible based on certain milestones.
Previously, bluebird could have accessed $25 million if it reached 35 starts on Lyfgenia by the end of September, or 55 by the end of the year. Under the new terms, it needs to receive additional financing by mid-December and to complete more than 50 Lyfgenia patient starts by the end of March, or 70 by the end of June 2025.
The terms for the next $25 million were revised as well. The $50 million is part of a larger $175 million loan agreement that bluebird announced in March, which includes another $50 million available at Hercules’ discretion.
“We are exploring all options to raise additional capital. This could include structures such as convertible debt, equity, royalty, or other alternatives,” a bluebird spokesperson said in an email.
Bluebird’s continued financial struggles speak to the challenge of making a successful business from cell and gene therapies. Despite the fact that bluebird has three commercial gene therapies — all of them a first in their disease — it has yet to find stable financial footing.
In May, bluebird said that with the Hercules loan, it had enough money to continue operating through early 2026. But the company has now shortened that substantially, saying it has the cash to last only into the first or second quarter of 2025.
Bluebird’s shares $BLUE fell 22% Wednesday to less than $1, and its stock is down 75% in the past 12 months. The update about the loan came alongside bluebird’s second-quarter earnings results, in which it said it generated about $16 million in revenue, well below Wall Street expectations of $26 million.
Gene therapy slowdown
Large pharma companies like Pfizer and Takeda have taken a step back from developing new gene therapies, and venture capital funding for cell and gene therapies has slowed to what could be the lowest year in the past decade, according to DealForma data published in Nature Biotechnology.
The process for Lyfgenia and similar treatments involve collecting a patient’s cells, engineering them in a lab, then treating the patient with chemotherapy and reinfusing the cells.
James SterlingSpeaking to investors Wednesday, bluebird CFO James Sterling said that process is taking approximately one month longer than expected, though the company expects that will improve over time. The first infusion of a patient with Lyfgenia is being scheduled.
In addition to the four patients who have started the process for Lyfgenia, another 19 began cell collections this year for Zynteglo, bluebird’s beta thalassemia therapy. Four have started Skysona, a gene therapy for certain boys with a rare neurological disease called CALD.
Bluebird said there are more than 40 additional patients scheduled for cell collections this year across its three commercial therapies, and it expects around 85 patient starts this year, down from a previous projection of 85 to 105 patients.
The 23 combined starts in sickle cell and beta thalassemia are comparable to bluebird’s competitor Vertex, which reported in early August that about 20 patients have started cell collections for Casgevy, a gene-edited therapy approved in both sickle cell disease and thalassemia. Vertex declined to break out patient starts by disease. Bluebird’s therapy is only approved in the US, while Vertex has approvals in other countries as well.
Zynteglo was approved in 2022, while Casgevy was approved for beta thalassemia in January. In 2023, 20 patients started cell collections for Zynteglo.