NEW YORK – Bluebird Bio on Monday said it has entered into a $175 million five-year term loan facility with Hercules Capital, which it will use to broaden access to its US Food and Drug Administration-approved gene therapies.
Somerville, Massachusetts-based Bluebird sells three gene therapies: Lyfgenia (lovotibeglogene autotemcel) for treating sickle cell disease, Zynteglo (betibeglogene autotemcel) for beta-thalassemia, and Skysona (elivaldogene autotemcel) for cerebral adrenoleukodystrophy. The company can borrow the $175 million to market these products in four tranches if it meets certain milestones.
According to the loan terms, Bluebird was allowed to draw $75 million as an initial loan in the first tranche once the transaction closed. In the second tranche, the company can access $25 million if it has started at least 35 sickle cell disease patients on Lyfgenia by Sept. 30 or started 55 patients on the gene therapy by Dec. 31. The company can draw another $25 million in a third tranche if it has recorded a trailing three-month gross profit of at least $30 million by June 30, 2025. After it achieves this last milestone, Bluebird can access another $50 million at the sole discretion of Hercules Capital in a fourth tranche.
If Bluebird draws $125 million over the first three tranches, it will extend the firm's cash runway through Q1 2026, the company said.
In a business update in January, Bluebird estimated that it would be able to start between 85 and 105 patients on its three marketed gene therapies, with the first patient receiving Lyfgenia, its most recent FDA-approved product, in the first quarter of this year. As of Dec. 31, 2023, the company had $275 million in unaudited cash and cash equivalents and marketable securities, including restricted cash of around $53 million.
In its efforts to enable access to Lyfgenia, which has a list price of $3.1 million, Bluebird has inked outcomes-based coverage agreements with two unnamed payors that together cover 200 million lives. Last week, Michigan Medicaid became the first state Medicaid agency to ink an outcomes-based contracting agreement for the sickle cell disease gene therapy.
J. Wood Capital Advisors was Bluebird's financial adviser in the latest loan transaction, and Latham & Watkins was its legal counsel. DLA Piper was Hercules Capital's legal counsel.