Bluebird Bio Reaffirms Commitment to Carlyle and SK Capital Deal Amid Failed Rival Bid

Bluebird bio, the gene therapy developer, has reaffirmed its commitment to a takeover deal with private equity firms Carlyle and SK Capital Partners, following the failure of a rival bid from Ayrmid Ltd. The decision comes after weeks of speculation and due diligence, highlighting the ongoing challenges faced by the once-promising biotech company.

Original Deal Stands as Rival Bid Falters

Bluebird's board of directors has reiterated its recommendation for shareholders to accept the offer from Carlyle and SK Capital, which values the company at approximately $29 million upfront. The deal, initially announced in February, offers $3 per share in cash, along with a contingent value right (CVR) payment of $6.84 per share based on future sales milestones.

The reaffirmation comes after Ayrmid Ltd., an Ireland-based investment firm, failed to produce a binding offer by the extended deadline of April 15. Ayrmid had previously submitted a non-binding proposal of $4.50 per share, representing a 50% premium over the Carlyle and SK Capital offer, with the same CVR structure.

Mark Vachon, Bluebird's board chair, stated, "Ayrmid's proposal remains highly conditional, despite an extension to the previously agreed-upon timeline to complete confirmatory diligence and submit a binding offer." The company revealed that Ayrmid was unable to secure committed financing, despite two separate engagements with Bluebird.

Financial Pressures and Strategic Review

The decision to pursue a sale comes amidst significant financial pressures for Bluebird. The company's market valuation has plummeted by approximately 80% over the past year, with its share price falling an additional 7% following the announcement of Ayrmid's failure to produce a binding offer.

Bluebird's accumulated deficit reached $4.5 billion as of December 31, 2024, with losses of $240 million in the previous year alone. The company's cash runway is expected to end in the first quarter of 2025, raising concerns about its ability to reach a revenue break-even point later this year.

The gene therapy developer had conducted an extensive strategic review prior to the Carlyle and SK Capital deal, engaging with over 70 potential investors over several months. The company views the current deal as "the only viable solution to generate value for stockholders," given its precarious financial position and the risk of defaulting on its loans.

Implications for Bluebird's Gene Therapy Portfolio

Despite securing FDA approvals for three groundbreaking gene therapies – Lyfgenia for sickle cell disease, Zynteglo for beta-thalassemia, and Skysona for cerebral adrenoleukodystrophy – Bluebird has struggled to establish sustainable markets for its products. The company generated just $10.6 million in revenue during the third quarter of 2024, with expectations of approximately $25 million for the final quarter.

Under the terms of the Carlyle and SK Capital agreement, former Ipsen and Mirati Therapeutics CEO David Meek is set to take over as head of Bluebird. Meek expressed commitment to unlocking the company's full potential, stating, "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."

The deadline for Bluebird shareholders to tender their stock to the Carlyle and SK Capital offer has been extended to May 2, 2025. If the company were to back out of the deal, it could face termination fees of up to $1.5 million or $300,000 in expense reimbursement.