blue-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

__________________________________________________________________

FORM 10-Q

__________________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35966

__________________________________________________________________

bluebird bio, Inc.

(Exact Name of Registrant as Specified in Its Charter)

__________________________________________________________________


Delaware						13-3680878
(State or Other Jurisdiction of Incorporation or Organization)						(IRS Employer Identification No.)

455 Grand Union Boulevard

Somerville

Massachusetts

02145

(Address of Principal Executive Offices)

(Zip Code)

(339) 499-9300

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

__________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	BLUE	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2023, there were 106,952,739 shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.

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FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•the initiation, timing, progress and results of our preclinical and clinical studies, and our research and development programs;

•our ability to advance product candidates into, and successfully complete, clinical studies;

•our ability to obtain adequate financing to fund our operations and to execute on our strategy;

•our expectations and projections regarding the sufficiency of our cash, cash equivalents, marketable securities and restricted cash to fund our operations;

•our ability to establish and scale commercial viral vector and drug product manufacturing capabilities, and to ensure adequate supply of our viral vectors and drug products, and our plans and expectations regarding our manufacturing activities;

•the timing or likelihood of regulatory filings and marketing approvals for our product candidates and our plans and expectations relating thereto;

•our plans and expectations regarding our commercialization activities for any approved products and the timing or success thereof, including expectations regarding our network of qualified treatment centers;

•our ability to obtain adequate pricing and reimbursement of any approved products;

•the implementation of our business model, strategic plans for our business, product candidates and technology;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

•estimates of our expenses, future revenues, capital requirements and our needs for additional financing;

•the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;

•our ability to maintain and establish collaborations and licenses;

•developments relating to our competitors and our industry;

•the impact of the general economic conditions and uncertainties, including as a result of the COVID-19 pandemic; and

•other risks and uncertainties, including those listed under Part II, Item 1A. Risk Factors.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

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Summary of the Material and Other Risks Associated with Our Business

Below is a summary of the material risks to our business, operations and the investment in our common stock. This summary does not address all of the risks that we face. Risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q in its entirety before making investment decisions regarding our common stock.

•We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

•There is substantial doubt regarding our ability to continue as a going concern. We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our commercial programs, product development efforts or other operations.

•Among other potential adverse events, insertional oncogenesis is a significant risk of gene therapies using viral vectors that can integrate into the genome. Any such adverse events may require us to halt or delay further clinical development of our product candidates or to suspend or cease commercialization following marketing approval, and the commercial potential of our products and product candidates may be materially and negatively impacted.

•We rely on complex, single-source supply chains for SKYSONA, ZYNTEGLO, and lovo-cel, respectively. The manufacture, testing and delivery of LVV and drug products present significant challenges for us, and we may not be able to produce our vector and drug products at the quality, quantities, or timing needed to support our clinical programs and commercialization.

•Changes in our manufacturing processes may cause delays in our clinical development and commercialization plans.

•We cannot predict when or if we will obtain marketing approval to commercialize lovo-cel, and the marketing approval of our product candidates may ultimately be for more narrow indications than we expect. If lovo-cel or other candidates are not approved in a timely manner or at all for any reason, our business prospects, results of operations, and financial condition would be adversely affected.

•We have limited experience as a commercial company and the marketing and sale of ZYNTEGLO, SKYSONA and of lovo-cel following marketing approval (if and when obtained), may be unsuccessful or less successful than anticipated.

•The commercial success of ZYNTEGLO, SKYSONA and of lovo-cel following marketing approval (if and when obtained), will depend upon the degree of market acceptance by physicians, patients, payers and other stakeholders.

•If the market opportunities for our product candidates are smaller than we believe they are, and if we are not able to successfully identify patients and achieve significant market share, our revenues may be adversely affected and our business may suffer.

•The insurance coverage and reimbursement status of newly-approved products in the United States is uncertain. Due to the novel nature of our technology and the potential for our product to offer lifetime therapeutic benefit in a single administration, we face unique and additional challenges in obtaining adequate pricing and reimbursement for our products. Failure to obtain or maintain adequate coverage and reimbursement for any new or current product could limit our ability to market those products and decrease our ability to generate revenue.

•We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are more advanced, safer or more effective than ours, which may adversely affect our financial condition and our ability to successfully develop and commercialize ZYNTEGLO, SKYSONA and lovo-cel.

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bluebird bio, Inc.

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		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets as of J une 3 0 , 2023 and December 31, 2022	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 3 0 , 2023 and 2022	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 3 0 , 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	26
Item 4.	Controls and Procedures	26

PART II. OTHER INFORMATION		27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities , Use of Proceeds, and Issuer Purchases of Equity Securities	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66
Item 6.	Exhibits	66

SIGNATURES		68

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

bluebird bio, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except par value amounts)


	As of June 30, 2023		As of December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	172,872	$	113,006
Marketable securities	72,431		67,321
Prepaid expenses	13,597		8,374
Inventory	13,642		—
Receivables and other current assets	15,435		10,787
Total current assets	287,977		199,488
Marketable securities	—		1,414
Property, plant and equipment, net	10,227		9,362
Goodwill	5,646		5,646
Intangible Assets	5,490		4,868
Operating lease right-of-use assets	302,849		281,996
Restricted cash and other non-current assets	51,204		52,128
Total assets	$	663,393	$	554,902
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,894	$	25,092
Accrued expenses and other current liabilities	56,531		51,985
Operating lease liability, current portion	67,591		51,160
Total current liabilities	135,016		128,237
Operating lease liability, net of current portion	239,266		230,230
Other non-current liabilities	92		92
Total liabilities	374,374		358,559
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000 shares authorized; 0 shares issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock, $0.01 par value, 250,000 shares authorized; 106,454 and 82,923 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	1,065		830
Additional paid-in capital	4,328,489		4,186,086
Accumulated other comprehensive loss	(2,364)		(4,070)
Accumulated deficit	(4,038,171)		(3,986,503)
Total stockholders’ equity	289,019		196,343
Total liabilities and stockholders’ equity	$	663,393	$	554,902

See accompanying notes to unaudited condensed consolidated financial statements.

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bluebird bio, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except per share data)


	For the three months ended June 30,				For the six months ended June 30,
	2023		2022		2023		2022
Revenue:
Product revenue, net	$	6,837	$	1,331	$	9,133	$	2,739
Other revenue	53		188		138		725
Total revenues	6,890		1,519		9,271		3,464
Cost of product revenue	9,564		1,745		12,940		10,055
Gross margin	(2,674)		(226)		(3,669)		(6,591)
Operating expenses:
Selling, general and administrative	40,349		36,694		77,703		72,800
Research and development	42,274		63,841		88,418		141,716
Restructuring expenses	—		6,639		—		6,639
Total operating expenses	82,623		107,174		166,121		221,155
Gain from sale of priority review voucher, net	—		—		92,930		—
Income (loss) from operations	(85,297)		(107,400)		(76,860)		(227,746)
Interest income, net	2,679		174		5,504		280
Other income (expense), net	9,630		7,088		19,608		5,176
Income (loss) before income taxes	(72,988)		(100,138)		(51,748)		(222,290)
Income tax (expense) benefit	80		—		80		—
Net income (loss)	$	(72,908)	$	(100,138)	$	(51,668)	$	(222,290)
Net income (loss) per share - basic	$	(0.67)	$	(1.36)	$	(0.49)	$	(3.02)
Net income (loss) per share - diluted	$	(0.67)	$	(1.36)	$	(0.49)	$	(3.02)
Weighted-average number of common shares used in computing net income (loss) per share - basic:	108,685		73,767		105,819

SEC Form 10-Q filed by bluebird bio Inc.