Core Program Milestones - Bluebird bio aims for 3 U.S approvals by the end of 2023 [7] - The company plans a commercial launch for beti-cel in early Q4 2022, pending FDA decision [8, 11] - A BLA submission for lovo-cel is planned for Q1 2023 [8, 16, 21] - Potential therapy availability for eli-cel is anticipated in Q4 2022 [9, 23, 34] Beti-cel (Beta-thalassemia) - Approximately 1,500 patients in the U.S are potentially addressable [12] - 90% of patients achieved transfusion independence (TI) and normal or near-normal hemoglobin levels in the LTF-303 study [14] - Patients spent up to 170 hours a year managing transfusions [12] - The average lifetime medical care cost per patient is $6.4 million [12] Lovo-cel (Sickle Cell Disease) - Over 20,000 patients in the US may be addressed by gene therapy [7, 17] - 1 in 365 Black or African American babies is born with sickle cell disease [17] - Patients experienced complete resolution of severe vaso-occlusive events (VOEs) through up to 36 months of follow-up [20] Eli-cel (Cerebral Adrenoleukodystrophy) - Approximately 40 patients are diagnosed with CALD in the U.S each year [22] - 90.6% (29/32) MFD-free survival at 24 months (ALD-102) [29] Financial Status - Restructuring is expected to deliver up to $160 million in cost savings over the next two years [32] - The company anticipates a 35-40% reduction in operating costs by year-end 2022 [32] - As of March 31, 2022, the company had $312 million in cash, cash equivalents, and marketable securities [32]

Part I. Financial Information This section presents the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls for the reporting period [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents bluebird bio's unaudited financial statements, including balance sheets, statements of operations, equity, and cash flows, along with notes detailing business operations, restructuring, and going concern issues [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202022%20and%20December%2031%2C%202021) This chapter provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | |:---------------------------|:------------------------------|:---------------------------------| | Total assets | $491,071 | $593,795 | | Total liabilities | $227,812 | $219,518 | | Total stockholders' equity | $263,259 | $374,277 | | Cash and cash equivalents | $106,260 | $161,160 | | Marketable securities | $105,328 | $138,343 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) This chapter outlines the company's financial performance over a period, presenting revenues, expenses, and net loss Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | |:--------------------------------------------|:-------------------------------------------------|:-------------------------------------------------| | Total revenues | $1,945 | $894 | | Total operating expenses | $122,291 | $146,988 | | Loss from operations | $(120,346) | $(146,094) | | Net loss from continuing operations | $(122,152) | $(121,504) | | Net loss from discontinued operations | $— | $(84,304) | | Net loss | $(122,152) | $(205,808) | | Net loss per share - basic and diluted | $(1.66) | $(3.07) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) This chapter details changes in stockholders' equity, reflecting net loss and stock-based compensation impacts Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | As of December 31, 2021 (in thousands) | As of March 31, 2022 (in thousands) | |:-------------------------------------|:---------------------------------------|:------------------------------------|\n| Total stockholders' equity | $374,277 | $263,259 | | Net loss for the period | N/A | $(122,152) | | Stock-based compensation | N/A | $12,681 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) This chapter summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | |:--------------------------------------------------------------------|:-------------------------------------------------|:-------------------------------------------------|\n| Net cash used in operating activities | $(125,296) | $(203,327) | | Net cash provided by investing activities | $69,926 | $321,352 | | Net cash provided by financing activities | $9 | $3,796 | | (Decrease) increase in cash, cash equivalents and restricted cash | $(55,361) | $121,821 | | Cash, cash equivalents and restricted cash at end of period | $151,332 | $495,549 | [Notes to Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This chapter provides detailed explanations and additional information supporting the condensed consolidated financial statements - bluebird bio is a biotechnology company focused on researching, developing, and commercializing gene therapies for severe genetic diseases, including β-thalassemia (beti-cel), sickle cell disease (lovo-cel), and cerebral adrenoleukodystrophy (eli-cel)[25](index=25&type=chunk)[26](index=26&type=chunk) - The company is focusing its severe genetic disease business on the U.S. market and has initiated an orderly wind-down of its European operations, which is expected to reduce selling, general, and administrative costs[26](index=26&type=chunk)[95](index=95&type=chunk) - In November 2021, bluebird bio completed the separation of its oncology programs into a new independent publicly traded company, 2seventy bio, Inc., retaining its severe genetic disease programs[27](index=27&type=chunk)[106](index=106&type=chunk) - A comprehensive restructuring plan was approved in April 2022, aiming to reduce operating expenses by up to **$160 million** over the next two years, primarily through a 30% workforce reduction and deprioritizing certain research investments[28](index=28&type=chunk)[86](index=86&type=chunk)[102](index=102&type=chunk) - As of March 31, 2022, the company had **$266.6 million** in cash, cash equivalents, and marketable securities, but an accumulated deficit of **$3.84 billion**; it incurred a **$122.2 million** loss and used **$125.3 million** in cash from operations during Q1 2022[29](index=29&type=chunk)[98](index=98&type=chunk)[103](index=103&type=chunk) - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern for at least 12 months from the financial statement issuance date, as plans to obtain sufficient funding or reduce expenditures are less than probable[32](index=32&type=chunk)[104](index=104&type=chunk) - The FDA has placed a partial clinical hold on the lovo-cel program for patients under 18 and a clinical hold on eli-cel due to myelodysplastic syndrome (MDS) diagnoses in CALD patients, likely mediated by Lenti-D lentiviral vector insertion[5](index=5&type=chunk)[150](index=150&type=chunk) Stock-Based Compensation Expense (Q1 2022 vs. Q1 2021) (in thousands) | Category | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | |:----------------------------------------|:-------------------------------------------------|:-------------------------------------------------|\n| Stock options | $5,260 | $16,420 | | Restricted stock units | $7,034 | $10,210 | | Employee stock purchase plan and other | $96 | $4,650 | | **Total Stock-based compensation expense** | **$12,390** | **$31,294** | - Unrecognized stock-based compensation expense totaled approximately **$97.5 million** as of March 31, 2022, expected to be recognized over a weighted-average period of 2.2 years[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, gene therapy program updates, ongoing losses, and strategic operational changes aimed at expense reduction and addressing going concern issues - BLA for beti-cel (β-thalassemia) accepted for priority review with a PDUFA goal date of August 19, 2022[93](index=93&type=chunk) - BLA for eli-cel (CALD) accepted for priority review with a PDUFA goal date of September 16, 2022[93](index=93&type=chunk) - The lovo-cel program for sickle cell disease is on partial clinical hold for patients under 18, impacting the timing of its planned BLA submission[94](index=94&type=chunk)[163](index=163&type=chunk) Key Financial Results (Three Months Ended March 31, 2022 vs. 2021) (in thousands) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | |:--------------------------------------|:--------------------|:--------------------|:----------------------|\n| Total revenues | $1,945 | $894 | +$1,051 | | Research and development expenses | $77,875 | $82,843 | -$4,968 | | Selling, general and administrative expenses | $36,106 | $63,569 | -$27,463 | | Cost of product revenue | $8,310 | $576 | +$7,734 | | Net loss | $(122,152) | $(205,808) | +$83,656 | - The decrease in R&D expenses was primarily due to lower employee compensation, stock-based compensation, clinical trial costs, and facility-related costs, partially offset by a **$15.6 million** increase in material production fees[125](index=125&type=chunk) - SG&A expenses decreased significantly due to reduced employee compensation, stock-based compensation, and commercial readiness activities following the decision to focus on the U.S. market[126](index=126&type=chunk)[127](index=127&type=chunk) - Cost of product revenue increased primarily due to reserves for excess inventory recognized in Q1 2022, based on revised sales forecasts[127](index=127&type=chunk) Cash Flow Activity (Three Months Ended March 31, 2022 vs. 2021) (in thousands) | Metric | 2022 (in thousands) | 2021 (in thousands) | |:--------------------------------------------------------------------|:--------------------|:--------------------|\n| Net cash used in operating activities | $(125,296) | $(203,327) | | Net cash provided by investing activities | $69,926 | $321,352 | | Net cash provided by financing activities | $9 | $3,796 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(55,361) | $121,821 | - The decrease in cash provided by investing activities was mainly due to lower proceeds from maturities and sales of marketable securities, partially offset by decreased purchases of marketable securities[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company's primary market risk exposure is interest rate sensitivity, affecting its short-term securities and potentially their fair value - The company's primary market risk exposure is interest rate sensitivity, affecting its short-term securities[137](index=137&type=chunk) - A hypothetical 100 basis point increase in interest rates would lead to an approximate **$1.3 million** decline in the net fair value of interest-sensitive marketable securities as of March 31, 2022[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of March 31, 2022[139](index=139&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2022[140](index=140&type=chunk) Part II. Other Information This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings as of March 31, 2022, with a class action dismissed and a patent infringement lawsuit ongoing - No material legal or arbitration proceedings were pending against the company as of March 31, 2022[142](index=142&type=chunk) - A class action complaint, Leung v. bluebird bio, Inc., was dismissed by the Court on April 21, 2022[142](index=142&type=chunk) - A patent infringement lawsuit, San Rocco Therapeutics, LLC v. bluebird bio, Inc., related to the BB305 lentiviral vector in the beti-cel program, is ongoing[142](index=142&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks including going concern doubts, financing needs, insertional oncogenesis, regulatory and commercialization challenges, COVID-19 impacts, intellectual property, and post-separation operational risks - The company has incurred significant losses since inception, with a net loss of **$122.2 million** for Q1 2022 and an accumulated deficit of **$3.84 billion**, and anticipates continued losses, raising substantial doubt about its ability to continue as a going concern[144](index=144&type=chunk)[147](index=147&type=chunk) - Insertional oncogenesis is a significant risk for gene therapies using viral vectors; several CALD patients treated with eli-cel have been diagnosed with myelodysplastic syndrome (MDS), leading to an FDA clinical hold on eli-cel studies[150](index=150&type=chunk) - The company has limited commercial experience and faces challenges in obtaining market acceptance, adequate pricing, and reimbursement for its gene therapies, as demonstrated by its withdrawal of ZYNTEGLO from the German market[151](index=151&type=chunk)[153](index=153&type=chunk)[161](index=161&type=chunk) - Uncertainty surrounds the timing and success of marketing approvals for product candidates (beti-cel, eli-cel, lovo-cel), with potential for regulatory delays, clinical holds, and approval for narrower indications[162](index=162&type=chunk)[163](index=163&type=chunk) - The company relies heavily on third parties for manufacturing, testing, and clinical studies, which introduces risks related to control, compliance, supply chain disruptions, and the potential for delays or failures[169](index=169&type=chunk)[171](index=171&type=chunk)[173](index=173&type=chunk) - The ongoing COVID-19 pandemic has materially and adversely affected various aspects of the business, including clinical study enrollment, manufacturing, and regulatory review timelines, and continues to pose significant uncertainty[183](index=183&type=chunk)[184](index=184&type=chunk) - The separation of oncology programs into 2seventy bio introduces risks such as potential operational difficulties, claims and liabilities, failure to realize anticipated benefits, and disruptions to business relationships[196](index=196&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk) - The company's ability to protect its intellectual property rights through patents and trade secrets is subject to various challenges, including the uncertainty of patent issuance, third-party infringement claims, and changes in patent law[202](index=202&type=chunk)[204](index=204&type=chunk)[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Uses of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Uses%20of%20Proceeds) No unregistered sales of equity securities or uses of proceeds were reported during the period - No unregistered sales of equity securities or uses of proceeds were reported[231](index=231&type=chunk) [Item 3. Defaults Upon Senior Securities](index=57&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[231](index=231&type=chunk) [Item 4. Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported during the period - No mine safety disclosures were reported[231](index=231&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) The company's policy allows Rule 10b5-1 trading plans for insiders, with no officers having entered such plans covering periods after this report date - The company's policy allows officers, directors, and employees to use Rule 10b5-1 trading plans for securities transactions[233](index=233&type=chunk) - No officers had entered into trading plans covering periods after the date of this Quarterly Report on Form 10-Q[233](index=233&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including separation agreements, corporate governance documents, and certifications - The exhibit index includes the Separation Agreement with 2seventy bio, Inc., amended corporate governance documents, certifications from principal officers, and Inline XBRL documents[236](index=236&type=chunk) SIGNATURES This section contains the official signatures of the company's principal executive and financial officers, certifying the report's accuracy - The report is signed by Andrew Obenshain, President, Chief Executive Officer and Director, and Jason Cole, Chief Strategy & Financial Officer, Principal Accounting Officer[238](index=238&type=chunk)

Bluebird Bio, Inc. (NASDAQ:BLUE) Q2 2021 Earnings Conference Call August 9, 2021 8:00 AM ET Company Participants Nick Leschly – Chief Executive Officer Elizabeth Pingpank – Direct Investor Relations Andrew Obenshain – President Severe Genetic Diseases Philip Gregory – Chief Scientific Officer William Denise Baird – Chief Financial Officer Conference Call Participants Salvesen Richter – Goldman Sachs Mani Foroohar – SVB Yaron Werber – Cowen Difei Yang – Mizuho Securities Charlie Ang – Morgan Stanley Dane Leo ...