Cash-strapped bluebird proposes public offering of stock

Dec. 19, 2023

In an effort to raise cash, bluebird bio announced that it has commenced an underwritten public offering of $150 million of shares of its common stock. 

The move comes following the FDA's December 8 approval of bluebird's one-time gene therapy, Lyfgenia, for the treatment of sickle cell disease (SCD) in patients ages 12 and older.

The FDA nod came on the same day that the agency approved Vertex Pharmaceuticals and CRISPR Therapeutics' CRISPR/Cas9 genome-edited cell therapy, exa-cel (branded Casgevy), for SCD patients. The timing did not work in bluebird's favor, as shares for the company fell after Lyfgenia received a black-box warning and was announced at a higher price point than the Vertex/CRISPR treatment.

In addition to the $150 million worth of shares, bluebird also intends to grant underwriters a 30-day option to purchase up to an additional $22,500,000 of shares of its common stock to be sold in the offering. The biotech says it will use the net proceeds of the offering primarily to support commercialization and manufacturing for its three approved gene therapies, Zynteglo, Skysona and Lyfgenia.

The market reacted negatively to the news, with bluebird's stock falling.

This isn't bluebird's first effort to raise money. Last week, the biotech disclosed an agreement with finance company Alterna Capital Solutions in an SEC filing. Per the deal, bluebird will sell certain trade accounts receivable to Alterna "from time to time." This agreement, says bluebird, will enable the company to collect cash earlier as part of its invoicing process, giving the company access to up to $100 million.

bluebird was also counting on receiving a Rare Pediatric Disease Priority Review Voucher following the approval of Lyfgenia, and struck a deal in October to sell it for $103 million. But the FDA did not end up rewarding bluebird with the voucher.

Trying to get ahead of the issues, the biotech had let go of 30% of its workforce last year in an effort to stretch out its cash runway until 2023.