Bluebird (BLUE) Down 47.8% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Bluebird Bio (BLUE). Shares have lost about 47.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Bluebird due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

bluebird Q4 Earnings Miss Estimates, Revenues In Line

bluebird reported a loss of $4.04 per share in fourth-quarter 2019, wider than the Zacks Consensus Estimate of a loss of $3.81 and the year-ago loss of $2.72.

Revenues of $10 million were in line with the Zacks Consensus Estimate. The figure was down from $19.2 million in the year-ago quarter. The decrease mainly resulted from lower collaboration revenues under the company’s arrangement with Bristol-Myers Squibb (NYSE:BMY).

Quarter in Detail

R&D expenses increased to $161.8 million in fourth-quarter 2019 from $119.7 million a year ago due to costs incurred by the company to advance and expand the pipeline.

Selling, general and administrative (SG&A) expenses of $76.2 million were up 42.4% from the year-ago quarter to support its operations, overall growth of the pipeline, and commercial-readiness activities.

2019 Results

The company’s loss per share was $14.31, wider than a loss of $10.68 in 2018.

It generated revenues of $44.7 million, down 18.2% year over year

Pipeline Development

During the quarter, the European Commission granted conditional marketing authorization to LentiGlobin for β-thalassemia, to be marketed as Zynteglo (autologous CD34+ cells encoding β^A-T87Q-globin gene) gene therapy, for patients 12 years or older with TDT, who do not have a β⁰/β⁰ genotype, for whom hematopoietic stem cell (HSC) transplantation is appropriate but a human leukocyte antigen (HLA)-matched related HSC donor is not available.

bluebird initiated its rolling Biologics License Application (BLA) submission of LentiGlobin for β-thalassemia for approval in the United States. The company is currently planning to complete the BLA submission in second-half 2020.

In December 2019, the company announced positive top-line data from the pivotal phase II KarMMa study of ide-cel in relapsed and refractory multiple myeloma.

The company plans to submit a BLA to the FDA for ide-cel in patients with relapsed and refractory multiple myeloma in first-half 2020, in partnership with Bristol-Myers Squibb.

It also expects to submit a BLA to the FDA and a marketing authorization application to the European Medicines Agency for Lenti-D in patients with cerebral adrenoleukodystrophy by 2020-end.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -5.54% due to these changes.

VGM Scores

Currently, Bluebird has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Bluebird has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.