I have always been puzzled that biotech companies can go public without revenues.
I realize that some investors can’t resist buying in to the story of a team of brilliant scientists getting close to winning FDA approval for a new drug that will cure a horrible disease.
But having spent about a year consulting to a company going through that process, I know two things that make it a very risky investment: there are so many things that can go wrong during that journey and the capital required to jump over all the hurdles is enormous.
Since early 2021, the plunge in biotech stocks has scared investors from throwing their money at such bets. And that means public biotech companies are under the microscope. It could make sense to bet that some of them will run out of money.
Cambridge, Mass.-based Bluebird Bio — a biotechnology company that develops gene therapies for severe genetic disorders and cancer — could suffer that fate. Even though the company could be acquired or receive a capital infusion in some other way, I see three reasons for pessimism:
Investment climate for publicly-traded biotech stocks poor
Despite recent layoffs, Bluebird Bio’s cash position is weak
(I have no financial interest in the securities mentioned in this post).
Biotech Stocks Are Way Down
If a greater fool is willing to buy something you are trying to sell, financial markets will become highly liquid. Should those greater fools suddenly wise up, financial markets will freeze.
That is what has happened to the market for publicly-traded biotech stocks. According to the Boston Globe, the XBIXBI, a popular biotech index, was down 27% since the beginning of 2022 and off about 50% from its February 2021 high while the S&P 500 rose around 13%.
Experts argue that biotech stocks have slumped more than ever. Andre Perold, chief investment officer and cofounder of the Boston investment firm HighVista Strategies, told the Globe “It is arguably the worst slump in the space relative to the S&P that we have ever seen.”
After lauding the biotech innovation renaissance, Barbara Ryan, senior adviser of life sciences at the consulting firm Ernst & Young, argued, “We are living through the deepest and longest [stock market] correction that we’ve seen in the biotech indexes since their inception.”
This brings us to the greater fool theory. When public stock investors are enjoying rapid wealth creation, they are eager to take advantage of the opportunities for high returns that come from investing in companies before they go public.
This is what happened at the beginning of the pandemic as investors became interested in funding potential vaccines and therapies for COVID-19. Between early 2020 and February 2021, that interest sent the XBI up 78%.
When the greater fools abandon ship, those pre-IPO companies are likely to lose access to private capital — or to pay a much higher price for the badly-needed capital. This problem is particularly acute for biotech companies that went public without revenues and still lack sufficient incoming cash to finance their operations long-term.
Recently some Boston-area biotech firms have bitten that bullet. As Perold said, “Some of these biotech firms will not survive. They won’t be able to raise money, or if they do, it will be very diluted.”
Indeed, this February and March, Akebia Therapeutics, Bluebird Bio, and Yumanity Therapeutics announced plans to cut employment by 30% to 60%, while in early April “microbiome firm Kaleido Biosciences shut down altogether,” reported the Globe.
Bluebird Bio’s Weak Cash Position
Bluebird Bio’s stock trades a whopping 98% below its March 2018 peak and has lost 80% of its value since going public in June 2013. The company was incorporated 30 years ago this month as Genetix Pharmaceuticals and in September 2010, changed its name to bluebird bio, according to its IPO prospectus.
In 2012, Bluebird reported $340,000 in revenue, down 61% from the year before, reported a net loss of $23.7 million and held cash of around $132 million at the end of 2012.
Nine years later, Bluebird’s finances remained grim. To be sure, it had increased its revenue but nowhere near enough to offset its costs. According to its 2021 10K, Bluebird generated $3.7 million in revenue and a loss of $819 million — after reporting no revenue in 2020 and a loss of about $619 million.
Prospects for the company were not good at the end of 2021. Bluebird burned through $167 million in cash last year, leaving the company with $161 million in cash. According to its 2021 10K, “the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.”
Last November, Nick Leschly, who had presided over the company since October 2010, left the company to run 2seventy bio — Bluebird’s “oncology programs and portfolio” — which went public after as a tax-free spin-off in November 2021. 2seventy bio’s stock has lost 54% of its value since then with a market capitalization of $579 million.
Under a new CEO, Andrew Obenshain, Bluebird announced April 5 that it was taking steps to lower its cash burn rate. According to a press release, the cost cutting initiative will reduce its cash burn rate in 2022 below $340 million, cut 30% of its 518 employee workforce, lower operating costs between 35% and 40%, and “extend the Company’s cash runway into the first half of 2023.”
Uncertain Revenue Prospects
Investors have not reacted enthusiastically to Bluebird’s performance and prospects. On March 31, short interest in Bluebird shares spiked nearly 44% sending its short interest up to 16.6%.
Investors did not react enthusiastically to Bluebird’s announcement of its cost reduction program. Since April 4, when they traded at $5.23 apiece, its shares have fallen 24%.
Is there any hope for new revenue at the company? Bluebird expects to receive FDA approval for two gene therapies this year and to apply for a biologics license application (BLA) for a third one by March 2023.
How so? According to the press release, Bluebird “anticipates FDA approvals for its gene therapies for beta-thalassemia and cerebral adrenoleukodystrophy in 2022, and the potential submission of a BLA for lovotibeglogene autotemcel (lovo-cel) gene therapy for sickle cell disease planned in the first quarter of 2023.”
But there is a fundamental problem with Bluebird’s business strategy of trying to treat so-called orphan diseases — with too few patients to attract investment from large pharmaceutical companies — for which drug makers offer high-priced treatments.
The problem is that regulators are casting a jaundiced eye at reimbursing them. According to InvestorPlace, “European officials [refuse] reimbursem*nt for drugs deemed unaffordable. American regulators, who must allow payment for anything available for sale, are slow-walking approvals...Genetic therapies, which are expensive to develop, don’t always work and often carry high price tags” are the most vulnerable to this regulatory stance.
What’s more, due to concerns about clinical trial participants developing cancer, according to BiopharmaDive, the FDA is wary about the safety of cell and gene therapies — putting many of their trials on hold.
According to a February 27 note from analysts at Jefferies, “cell and gene therapy holds accounted for approximately 40% of those ordered by the [FDA in 2021], despite representing well below that proportion of trials,” reported BiopharmaDive.
Could Bluebird raise enough capital to keep it going? The company says that it “continues to evaluate additional financing options, including public or private equity financings and monetizing any priority review vouchers that may be issued upon approval of beti-cel or eli-cel.”
Bluebird is proud of its achievements and its cost reduction initiative. As Obenshain said in the press release, “...We are taking decisive action to extend our cash runway, and put bluebird in a stronger position to execute on our strategic priorities and ultimately bring potentially curative gene therapies to patients and their families.”
If you think Obenshain will succeed, Bluebird Bio stock is cheap at around $4 a share. Otherwise you could profit by joining the short sellers.
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.
Bluebird bio cuts 30% of its workforce as gene therapy dreams dashed in Europe, delayed in US. The multiple R&D, regulatory and commercialization setbacks have hit home for bluebird bio. Hoping to keep the business afloat, the gene therapy specialist has brought out the cost-cutting ax.
Valuation metrics show that bluebird bio, Inc. may be overvalued. Its Value Score of F indicates it would be a bad pick for value investors. The financial health and growth prospects of BLUE, demonstrate its potential to underperform the market.
Net Loss: Net loss was $216.8 million for the three months ended September 30, 2021 , compared to $194.7 million for the three months ended September 30, 2020 . Net loss was $664.3 million for the nine months ended September 30, 2021 , compared to $418.8 million for the nine months ended September 30, 2020 .
This lovely species has made a heartening comeback since the early 20th century, when introduced species, habitat loss, and pesticides caused alarming population declines.
Eastern Bluebird numbers declined throughout the late 1800s and much of the twentieth century, suffering an almost 90% decline in population. Among many other reasons, competition for nesting space from invasive species such as House Sparrows and European Starlings contributed to this century-long decline.
Blue Bird has received a consensus rating of Buy. The company's average rating score is 3.00, and is based on 2 buy ratings, no hold ratings, and no sell ratings.
The financial health and growth prospects of BIO, demonstrate its potential to outperform the market. It currently has a Growth Score of D. Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of B.
Allbirds has received a consensus rating of Buy. The company's average rating score is 2.54, and is based on 7 buy ratings, 6 hold ratings, and no sell ratings.
The 11 analysts offering 12-month price forecasts for Allbirds Inc have a median target of 5.00, with a high estimate of 9.00 and a low estimate of 3.00. The median estimate represents a +76.37% increase from the last price of 2.84.
We want to know if, from the current price levels, a stock will go up or down. The best indicator of this is stock's fair price. When fair price of a stock is below its current price, the stock has good possibility to go up in times to come.
Blue Owl Capital Inc has been paying out quarterly dividends to its shareholders since September 08, 2021. As of November 22, 2022, Blue Owl Capital Inc had a relative dividend yield of 4.0% compared to the Investment Management & Fund Operators industry median of 3.3%.
Our Ai stock analyst implies that there will be a positive trend in the future and the HPNN shares might be good for investing for making money. Since this share has a positive outlook we recommend it as a part in your portfolio.
Once you receive and activate your personalized Bluebird card and set up a PIN, you can use your personalized card at the following ATMs: Use your Bluebird® American Express® Prepaid Debit Card at ATMs that permit American Express transactions within the United States and Puerto Rico, including ATMs at Walmart stores.
The Bluebird card, offered by American Express, is an FDIC-insured prepaid debit card with virtually no fees. It functions almost like a checking account, making it a useful substitute for consumers who don't have a bank account.
The funds subject to the hold will not be available until the transaction has fully completed or after the hold time expires (typically 7 days but could be up to 30 days with rental car agencies).
Tell the cashier that you want to add money to your Bluebird account. For Bluebird® American Express® Prepaid Debit Accounts, when you purchase a temporary card at Walmart, you can add between $1-$500. Once you have email verified and activated your personalized card, you can add between $20-$1,999.
Bluebird's long list of treasured snack food brands includes Bluebird Potato Chips, Twisties, Cheezels, CC's and Burger Rings. In 2010, Bluebird consolidated its corn chip brands in New Zealand with the introduction of the major US brand Doritos.
Today, Blue Bird has more than 1,500 employees, Georgia-based manufacturing facilities and an extensive network of Dealers and Parts & Service facilities throughout North America.
Place nest boxes in the sunniest, most open area possible, away from your house or deep shade. Bluebirds prefer large expanses of short grass with a clear flight path, ideally facing a field. Try not to place the house too close to feeders. Make sure it is mounted 5 to 10 feet off the ground.
Studies: Some studies show that about 11-15% of fledged Eastern Bluebirds come back to the area where they were born (Fiedler 1974, Plissner and Gowaty 1996). Out of the birds that do return, one study showed that <1% bred in the box where they were born, and <2% bred near the box where they were born.
Bluebird eggs and nestlings cannot survive temperatures exceeding 107 °F (41° C) (Conley Black). Prolonged excessive heat can severely impact nestling health due to dehydration and heat stress.
During the breeding season, a few populations of bluebirds migrate from the southern and middle states to northern states and Canada, returning to the south in the winter. Other bluebirds, however, reside on or near their territories throughout the year.
With rich blue, white, and rust plumage, the eastern bluebird is one of the most beautiful backyard birds. Its melodious song, insectivorous diet, and willingness to occupy birdhouses and nesting boxes also make this member of the Turdidae bird family a favorite visitor for many backyard birders.
Not just for closets, cedar is the ideal choice for a bluebird house for the same reasons why it's used to protect your wardrobe. Numerous bluebird societies recommend cedar because it's both decay and insect-resistant. It has a longer lifespan than most other woods.
Best Biotech Penny Stock With The Best Fundamentals – BioDelivery Sciences International Inc. (NASDAQ: BDSI) BioDelivery Sciences International Inc. is a US-based biotech penny stock with a share price under $5 and a relatively reliable income stream generated by its flagship product BELBUCA.
What Is Considered to Be a Good PEG Ratio? In general, a good PEG ratio has a value lower than 1.0. PEG ratios greater than 1.0 are generally considered unfavorable, suggesting a stock is overvalued. Meanwhile, PEG ratios lower than 1.0 are considered better, indicating a stock is relatively undervalued.
BioLife Solutions has received a consensus rating of Buy. The company's average rating score is 3.00, and is based on 1 buy rating, no hold ratings, and no sell ratings.
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.
Briefly, in order to be eligible for payment of stock dividends, you must buy the stock (or already own it) at least two days before the date of record and still own the shares at the close of trading one business day before the ex-date.
Shares of Allbirds (BIRD) were down 6% as of 11:22 a.m. ET on Wednesday after the company reported better-than-expected revenue and earnings for the third quarter. However, management's fourth-quarter revenue guidance was lower than the consensus estimate, which sent the stock down.
Analysts are downgrading their outlook on American Eagle in part due to retailers like Walmart cutting prices to move inventory. The clothing retailer had already announced price cuts of its own and could see profits struggle unless consumer demand picks up.
Stocks are falling because the Fed has put forward a string of aggressive interest rate hikes in recent months. The policy approach aims to slash price increases by slowing the economy and choking off demand. But the move risks tipping the U.S. into a recession and putting millions out of work.
2022 hasn't been a great year for the stock markets, especially for tech stocks. The tech-heavy Nasdaq index has fallen more than 30% since Jan 2022 and falling into a bear market due to interest rate hikes, rising inflation, macroeconomic uncertainty, global pressures and the strong US dollar.
Based on the latest financial disclosure, American Eagle Outfitters has a Probability Of Bankruptcy of 6.0%. This is 85.5% lower than that of the Specialty Retail sector and significantly higher than that of the Consumer Discretionary industry.
Introduction: My name is Margart Wisoky, I am a gorgeous, shiny, successful, beautiful, adventurous, excited, pleasant person who loves writing and wants to share my knowledge and understanding with you.
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