By Sneha S K
(Reuters) -Gene therapy maker bluebird bio on Friday agreed to be taken private by Carlyle Group and SK Capital Partners at a discount, after a prolonged struggle to survive a cash crunch due to a difficult market environment for gene therapies.
The company first raised going concern doubts three years ago and laid off a quarter of its workforce last year to focus on launching its three gene therapies, including Lyfgenia for sickle cell disease, which has seen slow uptake, partly due to a lengthy treatment process.
Shares of the company declined 42% after bluebird accepted a $3 per share cash offer – a discount of 57.4% to their last close and implying an equity value of $29.16 million.
Before bluebird’s troubles started, its shares had traded at about $150 in 2018. The stock fell 70% last year.
The go-private deal will now provide the “primary capital” required to scale bluebird’s commercialization efforts for gene therapies.
Baird analyst Jack Allen said it was encouraging to see financiers trying to keep the business alive as the “therapies are truly transformative for patients.”
But also expressed concerns over the company’s ability to secure the contingent payment that the investors have offered.
The investment firms have offered an additional $6.84 per share, representing about $66.48 million, contingent upon bluebird achieving certain sales milestones.
As of November, 57 patients had started treatment on all three bluebird therapies, including 17 on Lyfgenia. Its other two commercial products are Zynteglo and Skysona, both approved in the U.S. in 2022.
Skysona is approved to treat a rare neurological disorder, and Zynteglo for a blood disorder called beta-thalassemia.
Bluebird reported a cash balance of about $118.7 million, including restricted cash of about $48 million, as of September 30, 2024 – which was expected to fund operations into the first quarter of 2025.
(Reporting by Sneha S K and Bhanvi Satija; Editing by Shinjini Ganguli)
