Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- bluebird bio Inc (BLUE, Financial) more than doubled patient starts from 27 to 57 since the last quarter, indicating strong demand for their therapies.
- The company has a robust qualified treatment center (QTC) network with over 70 centers, providing broad access to their therapies.
- bluebird bio Inc (BLUE) has initiated steps to reduce cash operating expenses by 20% in Q3 2025, aiming for financial stability.
- The company reported its first LYFGENIA revenue, marking a significant milestone in their commercial operations.
- There have been zero ultimate denials for their therapies across both Medicaid and commercial payers, indicating strong reimbursement support.
Negative Points
- Total revenue for the third quarter was $10.6 million, down from $16.1 million in Q2, reflecting variability in manufacturing timelines.
- The company anticipates a cash gap in the second quarter of 2025, requiring additional financing to extend their runway.
- There is a need for a reverse stock split to regain compliance with Nasdaq's minimum bid price, indicating potential financial challenges.
- The cost of goods remains higher than revenue, resulting in negative margins due to high fixed costs associated with manufacturing.
- bluebird bio Inc (BLUE) faces variability in patient scheduling and manufacturing timelines, which can impact revenue recognition.
Q & A Highlights
Q: What are the dynamics around the administration of cells after delivery to treatment centers, and is there any dropout from cell manufacturing to administration?
A: We still see 100% pull-through once we deliver cells to a patient being treated. There is variability in patient scheduling, but once we deliver the final drug product to the QTC, it's in their hands. We have seen 100% pull-through once delivered.
Q: Are you seeing 100% manufacturing success rate, and how far out are you scheduling slots into 2025?
A: Recollections are a natural part of the process, and sometimes we need to collect more than once for a patient. Nearly 100% of patients go on to eventual delivery. Patients are being scheduled one to two months out, and we have over 30 patients scheduled for 2025.
Q: Regarding the 30 patients scheduled in 2025, are these mainly in the first quarter? What is the average cell collection cycle for LYFGENIA patients?
A: The vast majority of the 30 patients are scheduled for Q1, with some in Q2. For LYFGENIA, 85% of patients in clinical trials completed in one or two cycles, and we anticipate similar results commercially.
Q: What is your internal assumption on the conversion rate of scheduled new starts to actual cell collection? Are new starts for LYFGENIA concentrated in a few centers?
A: The conversion rate is very high, essentially 100%, with rescheduling being the only variable. The start activity is well spread out among centers, with about 30 QTCs having initiated for one of our therapies.
Q: Have you figured out how to accelerate the process from cell collection to completion of manufacturing and testing?
A: We are seeing consistent timelines with some variability. For LYFGENIA, the first patient was delivered slightly less than the expected timeframe. We are pleased with the quality and timeliness of our manufacturing.
Q: What drives your confidence in scaling to 40 product deliveries per quarter by the second half of 2025?
A: We see strong demand for ZYNTEGLO and LYFGENIA, with expanded manufacturing capacity and a robust QTC network. Over 30 patients are already scheduled for next year, indicating strong market demand.
Q: Can you speak to the shareholder vote against the reverse stock split and how many shares are authorized to be issued?
A: We have about 35 million shares available to issue under current authority. The reverse stock split would increase the number of authorized shares on a relative basis, depending on the Board's decision.
Q: What is driving the high cost of goods, and what levers can you pull to reduce expenses?
A: High fixed costs are associated with manufacturing contracts and FTEs. We expect costs to decrease as volumes increase, with positive gross profit anticipated in 2025. LYFGENIA's suspension vector is lower cost than ZYNTEGLO's, which should help reduce expenses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
