bluebird bio(US:BLUE)2023-11-07 16:18Financial Data and Key Metrics Changes - In Q3 2023, bluebird bio reported total revenue of $12.4 million, primarily driven by product revenue from ZYNTEGLO and SKYSONA, indicating strong linear growth [18][19] - The company has a cash position of $227 million as of September 30, 2023, with a cash burn guidance for the full year 2023 in the range of $270 million to $300 million [20][18] - The company anticipates a potential $63 million in gross revenue from 22 combined patient starts for ZYNTEGLO and SKYSONA [18][19] Business Line Data and Key Metrics Changes - ZYNTEGLO has seen 16 patient starts since launch, with a significant increase in Qualified Treatment Centers (QTCs) activated, now totaling 29 across 16 states [11][12] - SKYSONA has completed six patient starts and activated four QTCs, maintaining a guidance of five to ten patient starts for the year [15] - The company has signed outcomes-based agreements for ZYNTEGLO with Michigan and Massachusetts state Medicaid agencies, demonstrating payer support [13][14] Market Data and Key Metrics Changes - The company estimates that approximately 50% of sickle cell disease patients are covered by Medicaid, with ongoing negotiations for outcomes-based agreements with national payers [33][17] - The potential market for lovo-cel is significantly larger, with about 20,000 severe sickle cell patients in the U.S. compared to approximately 1,500 for beta-thalassemia [75] Company Strategy and Development Direction - bluebird bio aims to leverage its unique position as a standalone commercial gene and cell therapy company to drive growth and profitability, particularly with the anticipated approval of lovo-cel [7][8] - The company plans to expand its QTC network to reach 95% of sickle cell patients within 200 miles of a planned QTC [16][66] - The focus is on ensuring timely and equitable access to lovo-cel at launch, with innovative contracting approaches being negotiated with payers [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming FDA approval of lovo-cel, viewing it as a significant milestone for the sickle cell disease community and a key driver of profitability [8][21] - The company is optimistic about the demand for gene therapy, with over 70% of patients indicating they would consider gene therapy if recommended by their doctor [15][16] - Management highlighted the importance of long-term follow-up data in differentiating their products in the market [44][45] Other Important Information - The company has entered into an advanced agreement to sell a priority review voucher for $103 million, which could strengthen its financial position ahead of the lovo-cel launch [19] - bluebird bio is applying learnings from ZYNTEGLO to optimize commercial manufacturing processes for lovo-cel [17] Q&A Session Summary Question: Can you provide details on patients infused and revenue recognition? - The company has infused 22 patients across ZYNTEGLO and SKYSONA, translating to about $63 million in gross revenue, with $8.5 million of deferred revenue expected to be recognized before year-end [23][25] Question: What are the expectations for R&D burn related to lovo-cel? - R&D expenses are expected to decrease post-approval of lovo-cel, but there will still be costs associated with long-term follow-up and optional patient registry [27][28] Question: How will Medicaid reimbursement dynamics affect revenue recognition? - The company anticipates that Medicaid patients may take longer to process compared to commercial patients, but expects fair coverage based on past experiences with ZYNTEGLO [30][33] Question: What is the expected capacity at Qualified Treatment Centers? - Capacity at QTCs is not expected to be an issue, as hospitals have built significant capabilities for gene therapy [38] Question: How will outcomes-based agreements impact revenue recognition? - Revenue will be constrained based on estimated patient flow and outcomes, with conservative estimates to avoid significant reversals of revenue [40][41] Question: What is the plan for pricing lovo-cel? - The company will consider clinical benefits and cost savings when pricing lovo-cel, but will not comment on competitor pricing [80] Question: What is the status of the two patients who developed AML in trials? - There have been no cases of insertional oncogenesis with lovo-cel, but safety events related to the procedure will likely be mentioned in the label [81]