December 6, 2019 | Equity Research
BLUE : Releases Positive KarMMa Results For bb2121
Sector Rating: Biotechnology, Overweight
We are reiterating our OUTPERFORM rating on shares of bluebird bio (BLUE) following release of positive data from the pivotal phase 2 KarMMa study of BCMA CART therapeutic idecel (bb2121) In relapsed/refractory myeloma. We believe that breadth, depth and duration of response are at the high end of expectations, unprecedented in patients triple refractory to iMID/PI/antiCD38 and supportive of a significant commercial opportunity. Relative to approved CART therapeutics we believe that safety compares favorably, in terms of severe cytokine release syndrome (CRS) and neurotoxicity (NT), with only 1 patient death, inline with that seen with YESCARTA in fewer treated patients. We believe that BLUE is undervalued relative to opportunity from its LentiGlobin gene therapy and estimate an incremental NPV of $64/share for idecel. Bluebird bio (BLUE) and partner BristolMyers Squibb (BMY) announces positive phase 2 KarMMa results for BCMA CART therapeutic idecel (bb2121) In relapsed/refractory myeloma. With 140 patients enrolled and 128 treated across 3 dose groups of 150MM cells, 300MM cells and 450MM cells the study met its primary and key secondary endpoints. Key efficacy results included overall response rate (ORR) of 73.4% and complete response rate (CR) of 31.3%, with ORR of 81.5% and CR rate of 35.2% at the highest target dose. Median duration of response (DOR) of 10.6 months, and 11.3 months at the highest dose, was inline with prior phase 1 CRB401 results, with PFS of 11.3 months at the highest dose. Safety was inline with prior CRB401 results with 5.5% grade 3/4 CRS and 3.1% grade 3/4 NT with no grade 4 NT. Only 1 fatal CRS advent occurred. Based on these results BMY and BLUE are preparing regulatory submissions for approval in US and other territories.
bluebird bio, Inc. (BLUE)/Outperform (1)
Price as of 12/6/2019: $79.42
FY 19 EPS: $13.86
FY 20 EPS: $8.77
Shares Out.: 55.3 MM
Market Cap.: $4,391.93 MM
Rating Basis Information:
BLUE Thesis: Lentiglobin gene therapy opportunities in Beta Thalassemia and
Sickle Cell Disease (SCD) should be realized as profound patient benefits seen
with earlier patients are maintained and broadened to more patients. While
concerns have emerged regarding individual patient variability we believe that
more patients than not will benefit from LentiGlobin gene therapy.