Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- bluebird bio Inc (BLUE, Financial) has built an extensive network of over 70 qualified treatment centers, surpassing their initial goal of 40-50 centers.
- Strong demand for ZYNTEGLO and LYFGENIA with 27 patient starts in 2024, including 19 for ZYNTEGLO, 4 for LYFGENIA, and 4 for SKYSONA.
- Successful renegotiation of the agreement with Hercules Capital, providing potential access to additional funding tranches totaling $50 million.
- Significant progress in securing reimbursement, with more than half of sickle cell patients insured by Medicaid living in states that have affirmed coverage for LYFGENIA.
- Reported $16.1 million in total revenue for Q2 2024, up from $6.9 million in the prior year period, indicating strong financial growth.
Negative Points
- The process from cell collection to infusion is taking about a month longer than initially anticipated, impacting revenue recognition timelines.
- The cash runway is expected to take the company only into Q2 of 2025, with further constraints due to minimum cash requirements by Hercules.
- The company is still undergoing a restatement process, which has not yet been completed, adding uncertainty to financial reporting.
- Revenue is expected to fluctuate quarter-to-quarter due to varying manufacturing cycle times, which could impact financial stability.
- The OIG released an unfavorable opinion on providing fertility preservation services for patients insured through Medicaid, potentially affecting patient access.
Q & A Highlights
Q: Could you speak to the historical experience regarding patients scheduled for cell collection? Have you seen anyone drop out of the process?
A: Historically, we haven't given guidance around how many have fallen out of the funnel. Generally, it's more of a timing issue rather than a decision not to get treatment. The number of patients rescheduling their collection is very small, so we feel confident in the 40 patients scheduled for treatment.
Q: Do you expect the 20% to 25% net price discount to apply to both ZYNTEGLO and SKYSONA?
A: Yes, you can apply that percentage estimated range to all three products, including LYFGENIA.
Q: How should we think about revenue recognition for the incremental three LYFGENIA patients that have started collections this past cycle?
A: We expect revenue recognition to come within six months, or two quarters, from cell collection to infusion.
Q: Can you talk about the number of states where prior authorization for LYFGENIA has been completed and where that might go with additional patient starts?
A: Currently, 20% of Medicaid-insured sickle cell patients live in a state where prior authorization has been completed. We expect this to grow as we work on targeted states where people living with sickle cell disease reside.
Q: What is driving your anticipation for an acceleration of LYFGENIA patient starts in the second half of the year?
A: LYFGENIA has a longer path to patient starts due to payer approval processes and steps to clinical readiness. Patients are scheduling many months in advance, often around life events. Demand is strong, and it's simply a timing issue.
Q: Are you seeing any competitive dynamics in terms of how prescribers are making decisions on which sickle cell gene therapy to prescribe?
A: We have over 70 qualified treatment centers, about three times that of our closest competitor. Market research shows that QTCs prefer LYFGENIA and bluebird, indicating we maintain a strong leadership position.
Q: What makes you confident that you will have approximately 85 patient starts rather than potentially more?
A: We have 27 patients who have already gone through cell collection and more than 30 scheduled for the rest of the year. As we get into the second half, some patients will start scheduling into 2025. Demand is strong, but we expect to come in closer to approximately 85 starts.
Q: How should we think about the relative market share between you and Vertex for sickle cell disease?
A: We see it differently. We reported 23 starts in beta-thalassemia and sickle cell disease in the US alone this year, compared to Vertex's 20 global starts. We believe we are securing the lead position in the market.
Q: Could you provide additional color on the renegotiated terms of your debt financing agreement with Hercules?
A: The second tranche becomes available if we secure at least $75 million in gross proceeds from additional financing by December 20, and at least 50 LYFGENIA starts by March 31 or 70 by June 30. The third tranche becomes available if we receive at least $100 million in gross proceeds by December 20 or $125 million by June 30, and complete at least 70 drug product deliveries within a six-month period by December 31 next year.
Q: Has the negative opinion by HHS on fertility treatment impacted LYFGENIA?
A: Fertility preservation is a consideration for patients. Bluebird offers fertility preservation for eligible, commercially-insured patients. We are engaged with stakeholders to encourage change and help patients navigate the coverage process.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
