Janney Upgrades bluebird bio Ahead Of Sickle Cell Presentation

Shares of bluebird bio Inc. BLUE surged over 13 percent last week as the company announced plans to release abstracts at the American Society of Hematology meeting in December.

The Analyst

Janney analyst Yun Zhong upgraded bluebird from Neutral to Buy and maintained a $170 price target.

The Thesis

Zhong does not see any company-specific reason for bluebird's stock weakness in the past few months. The stock is trading below Janney's price target. (See his track record here.)

“We believe last week's strong performance was partially due to the released ASH abstracts, which reported overall positive updates from key programs. And we expect more detailed data after longer follow-ups, to be provided at the conference, to drive further stock outperformance.”

The abstracts reported data from the clinical program for the treatment of severe sickle cell disease, the analyst said.

Since June 15, eight patients have received treatment in the Phase 1 study.

“The ASH abstract contains the same data set that has already been presented at EHA in June, and we expect the conference presentation in December to show continued increases or stabilization," Zhong said. 

Based on information provided by bluebird on its most recent conference call, the analyst said he expects Phase III to be initiated immediately. While bluebird has yet to reveal guidance on the upcoming study, Zhong remains optimistic.

“The ASH abstract reported a 90-percent reduction in BCL11A protein and encouraging changes in hematologic markers in one patient who received treatment. We believe the data, although from only one patient, demonstrates strong proof-of-concept.”

Price Action

Bluebird shares were up 2.97 percent at $136.63 at the time of publication Monday. 

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