Yahoo Finance Video
Yahoo Finance's Julie Hyman discusses the reversal in Bluebird Bio shares after the FDA approved its second gene therapy.
Video Transcript
[AUDIO LOGO]
BRAD SMITH: Before we go to break here, checking in on some of the trending tickers. One particular, let's check out Bluebird. Shares of Bluebird Bio, ticker symbol BLUE, now, you're seeing that move lower by about 11.3%. This is after the Food and Drug Administration approved the company's gene therapy for a rare and lethal brain disease in male children ages 4 to 17. The drug will be marketed under the name Skysona.
[MUSIC PLAYING]
JULIE HYMAN: The stock was actually rallying in premarket trading. So interesting now to see it come lower initially. That was seen as good news, by the market. But now seeing this drop. Not sure exactly what's going on here, if there's just-- if it's a sell the news kind of situation. I'm not sure.
This is a very volatile stock, we should mention, Bluebird Bio, as are many of the biotech stocks that tend to move quite sharply on these various announcements, expectations for what approval is gonna look like and what various developments are gonna look like from a clinical perspective. So we'll continue to track this and try and figure out, why it's now lower--
BRAD SMITH: Yeah.
JULIE HYMAN: --after rising on that news.
BRAD SMITH: Indeed. Typically, a sign, at least an FDA approval would be something enough to move a company like this higher over the trading session.
As a seasoned expert in the field of biotechnology and gene therapies, I bring forth a wealth of knowledge to dissect the intricacies of the Bluebird Bio situation mentioned in the Yahoo Finance video from September 19, 2022. My expertise is grounded in a comprehensive understanding of gene therapy, FDA approval processes, and the dynamics of biotech stocks.
The video discusses the reversal in Bluebird Bio shares following the FDA's approval of its second gene therapy. Bluebird Bio is a biotechnology company, and its shares, traded under the ticker symbol BLUE, experienced an 11.3% decline after the FDA granted approval for the company's gene therapy designed to address a rare and lethal brain disease affecting male children aged 4 to 17. The approved gene therapy is to be marketed under the name Skysona.
The initial reaction to the news was a rally in the stock during premarket trading. However, the unexpected subsequent drop puzzled market observers, including Julie Hyman from Yahoo Finance. This volatility is characteristic of many biotech stocks, and Bluebird Bio is no exception. Biotech stocks often exhibit sharp movements in response to announcements, especially those related to regulatory approvals and clinical developments.
The hosts, Julie Hyman and Brad Smith, speculate on the reasons behind the stock's decline. Julie suggests the possibility of a "sell the news" scenario, where investors might be reacting to the FDA approval by selling their positions. This phenomenon is not uncommon in the stock market, where traders anticipate certain events and take action once those events materialize.
Brad Smith notes that it's typically expected that an FDA approval would lead to a positive movement in a company's stock. The fact that Bluebird Bio experienced a decline instead prompts further investigation into the specific factors driving this unexpected market behavior.
In summary, the Bluebird Bio case underscores the complexity of biotech stocks and the unpredictable nature of market reactions to regulatory approvals. Understanding the interplay between clinical developments, investor expectations, and market dynamics is crucial in comprehending the fluctuations in stock prices, particularly in the biotechnology sector.
