bluebird bio upgraded to ‘buy’ at BofA, stock jumps 27%

bluebird bio Inc (NASDAQ:) shares surged more than 27% intra-day today after BofA Securities upgraded the company to Buy from Neutral and raised its price target to $10.00 from $6.00, noting that the company’s sickle cell disease (SCD) gene therapy product, lovo-cel, is underappreciated.

The bank expects timely approval from the FDA on the expected December action date. Despite some setbacks along the path to lovo-cel approval, BofA believes that the data for the drug are on par with or even more robust than those of its closest competitor. As a result, they project peak sales to approach $1 billion.

Furthermore, the firm mentioned that the recent acceptance of the biologics license application (BLA) for lovo-cel mitigates further timeline risks.

With the anticipation of lovo-cel being available on the market for SCD, BofA forecasts that bluebird bio will achieve profitability by 2026, assuming one additional financing event.

The firm believes that investors understand the revenue opportunity in SCD, as evidenced by valuations of comparable companies. Therefore, they view the launch of lovo-cel as a crucial event that will contribute to bluebird bio’s share price appreciation.