Private Equity Firms Acquire Struggling Gene Therapy Pioneer bluebird bio for $29 Million

In a surprising turn of events for the biotechnology industry, once-celebrated gene therapy developer bluebird bio has been acquired by private equity firms Carlyle and SK Capital for a mere $29 million. The deal, announced on Friday, marks a dramatic fall for a company that was once valued at over $10 billion.

The Rise and Fall of bluebird bio

Bluebird bio, founded 15 years ago in Massachusetts, was once at the forefront of gene therapy development. In early 2018, the company's share price reached an astounding $2,300, reflecting high hopes for its innovative treatments. However, the biotech has struggled to commercialize its three gene therapies, leading to a steep decline in its market value.

The acquisition price of $3.00 per share represents a significant discount from bluebird's closing price of $7.04 on Thursday, when its market capitalization stood at $68 million. The deal includes a contingent value right (CVR) that could add an additional $6.84 per share if sales of bluebird's gene therapies reach $600 million over any 12-month period by the end of 2027.

Challenges in Commercialization and Market Access

Bluebird bio's difficulties began in Europe, where the company failed to reach agreements with regulators on pricing for its spinal muscular atrophy gene therapy Zynteglo and beta-thalassemia treatment Skysona. In August 2021, the company withdrew from the European market, with CEO Andrew Obenshain describing it as "broken" and "untenable for a small innovative company."

Despite more favorable conditions in the U.S. market, where Zynteglo and Skysona were approved by the FDA in 2022 with price tags of $2.8 million and $3 million respectively, bluebird struggled to gain traction. The company's third gene therapy, Lyfgenia for sickle cell disease, was approved in December 2023 and priced at $3.1 million. However, patient uptake has been slow, with only 57 patient starts reported across all three therapies as of November.

Future Prospects and New Leadership

The acquisition by Carlyle and SK Capital aims to revitalize bluebird bio's operations and expand patient access to its gene therapies. David Meek, former CEO of Mirati and Ipsen, has been appointed to lead the company upon the deal's closure, expected in the first half of this year.

"Bluebird is built on an extraordinary legacy of scientific breakthroughs, and we are committed to unlocking its full potential for patients," Meek stated. "With the backing of Carlyle and SK Capital, we will bring the capital and commercial capabilities needed to accelerate and expand patient access to bluebird's life-changing gene therapies."

As bluebird bio transitions to private ownership, the pharmaceutical industry will be watching closely to see if this acquisition can breathe new life into a company that once symbolized the promise of gene therapy.