Analyst Conference Summary

biotechnology

conference date: November 14, 2024 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2024 (third quarter, Q3)

Forward-looking statements

Overview: Slow growth of patient starts and revenue, rapid cash burn, needs to reverse-split stock.

Basic data (GAAP):

Revenue was $10.6 million, down sequentially from $16.1 million, and down 15% from $12.4 million year-earlier.

Net Income was negative $61 million, up from negative $87 million year-earlier.

EPS (Earnings per Share) were negative $0.31, up from negative $0.80 year-earlier.

Guidance:

Believes Q4 revenue at least $25 million. Cash should last into Q1 2025. Could reach cash-flow break even in 2H 2025.

Conference Highlights:

Andrew Obenshain, CEO, said "Patient starts more than doubled from our second to third quarter update, providing clear evidence that our commercial launches continued to accelerate. This momentum, coupled with steps we took in the third quarter to increase manufacturing capacity for Zynteglo and optimize our cost structure, is propelling bluebird forward on our path to becoming a sustainable commercial gene therapy company. We remain focused on securing additional cash resources to extend our runway, which we believe would enable us to achieve this vision and reach cash flow break-even in the second half of 2025" Continues to reduce expenses. Expects to reach cash flow break even in 2H 2025, but will also raise cash with Hercules.

Looking for authorization to reverse-split stock.

The dip in Q3 revenue was due to manufacturing delays. Plans to double Lyfgenia manufacturing capacity in 2026.

57 patient starts to date, up from 27 in August. Lyfgenia 17; Zynteglo 35; Skysona 5. Revenue from the first Lyfgenia infusion received in Q3 2024. Expects 17 more starts by end of 2024. Already scheduled 30 patient starts for 2025. It typically take two quarters between the start and drug delivery (and revenue).

Zynteglo is for beta-thalassemia.

Skysona is for cerebral adrenoleukodystrophy (CALD).

Bluebird continues to make progress arranging reimbursement for its therapies and centers for their administration. To date over 70 QTCs (qualified treatment centers) activated for Lyfgenia and Zynteglo and 6 for Skysona. Multiple outcomes-based agreements have been reached for Lyfgenia. More than half of States completed prior authorization for Lyfgenia. Zero ultimate denials to date.

Expects gross-to-net discounts across all three products to be in the range of 20% to 25% of gross revenue in 2024 and expects fluctuation based on product, payer mix, and outcomes-based agreements.

Patients under the age of 12 are in study of lovo-cel, with enrollment completion expected in Q4 2024.

Cash and equivalents ended near $119 million, down sequentially from $193 million.

Financial statements for 2022 and 2023 were be restated on 10-Ks. Q1 and Q2 2024 issued on 10-Qs.

Operating expenses of $66 million consisted of: $40 million SG&A; $23 million R&D; $3 million restructuring. Loss from operations $67 million. Interest expense net $4 million. Other income $10 million.

Q&A selective summary:

Revenue sequentially down? Drop outs? We are getting 100% pull through. Differences are in patient scheduling. Patients almost always convert to collections, sometimes delay to reschedule.

Manufacturing success rate? We sometimes have to collect more than once for a patient. Nearly 100% of patients go on to infusion.

Patients typically schedule one to two months out. But variability on collections.

30 patients in 2025? Seeing sustained demand. Most are in Q1, some are in Q2.

Cash runway, partnership with Hercules is key.

40 product deliveries per quarter would be needed for cash-flow break even. We have adequate manufacturing capacity. We see strong demand for Zynteglo, strong ramp for Lyfgenia, our QTC network is has many getting ready to start their first patient, there is a lot of unmet medical need.

The only example of a patient not converting to revenue is if we give it to them for free.

Because of high fixed manufacturing costs, as we up the patient rate, cost per should go down.

Q4 holiday impact? Tracking infusions closely, gives us confidence on $25 million revenue.

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