NEW YORK – Bluebird Bio on Friday said it will be purchased by funds managed by investment firms Carlyle and SK Capital Partners, after which it will become a privately held company.
Under the terms of the acquisition deal, Bluebird stockholders will receive $3.00 per share in cash and a contingent value right (CVR) per share that entitles them to $6.84 in cash per CVR if the company's current product portfolio of three gene therapy products reaches $600 million in net sales in any 12-month period before the end of 2027.
Bluebird's stock price hit a 52-week low on Friday morning after the announcement, dropping to $4.12 per share after closing at $7.04 on Thursday. The company's share price has significantly fallen since a 52-week high of $38.40 per share last February.
Bluebird's board of directors unanimously approved the sale after a review of strategic alternatives, including meeting with more than 70 possible investors and partners, the company said.
"For more than a decade, Bluebird has been at the forefront of gene therapy, delivering groundbreaking treatments to patients facing life-threatening genetic diseases," Bluebird CEO Andrew Obenshain said in a statement. "However, as our financial challenges mounted, it became clear that securing the right strategic partner was critical to maximizing value for our stockholders and ensuring the long-term future of our therapies."
Bluebird sells multiple gene therapies, including one of the first gene therapies for sickle cell disease to be approved by the US Food and Drug Administration, Lyfgenia (lovotibeglogene autotemcel). However, in November, the company said it was looking to secure additional cash as its existing runway only would enable it to fund operations into Q1 2025.
The company has faced financial challenges in recent years. In conjunction with Lyfgenia's approval, Bluebird had expected to be awarded a rare pediatric disease priority review voucher, even entering into an advance agreement to sell it for $103 million. However, the FDA denied the voucher request, determining that the product didn't qualify since it has an active ingredient in a previously approved product from the company. Bluebird appealed the FDA's decision, but the regulator has continued to deny it.
"The Bluebird board determined that, absent a significant infusion of capital, Bluebird is at risk of defaulting on its loan covenants," the company said in a statement announcing the sale. "The Bluebird board has decided that this transaction is the only viable solution to generate value for stockholders."
Carlyle and SK Capital, in collaboration with a team of biotech executives, will provide Bluebird with primary capital to scale its commercial gene therapies for patients with sickle cell disease, beta-thalassemia, and cerebral adrenoleukodystrophy. The firms will install David Meek, former CEO of Mirati Therapeutics and Ipsen, as the company's CEO after the transaction closes.
The transaction is expected to close in the first half of 2025. In the meantime, Somerville, Massachusetts-based Bluebird has entered into amendments to its loan agreement with Hercules Capital, which it inked last year, to provide the company with adequate liquidity to maintain operations until the transaction closes.