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BLUE: For Long-Term Investors Only

By Matt McCallAug 06, 2018


Right now, scientists are working in a cutting-edge field of medicine and health that is poised to mark a major demarcation point in human evolution. I’m talking about gene editing and gene therapy – incredible innovations that have the potential to save, lengthen and improve the quality of billions of lives through a new approach to curing diseases. Of course, there are enormous financial implications involved, and I have no doubt it will create incredible wealth for investors who get in early.

One of my favorite picks in this field is bluebird bio (BLUE), a leader in the gene therapy revolution. It’s a standout because it encompasses gene therapy, cancer immunotherapy and gene editing in an effort to treat and cure a broad range of diseases.

While the company is still in the early stages of its lifecycle, it has one of the most impressive and advanced pipelines of gene therapy drugs in the entire sector. Its most promising treatment getting attention right now is LentiGlobin, a drug that has shown impressive FDA trial results in patients suffering from the blood disease beta-thalassemia.

Last week, BLUE was granted an accelerated assessment by the Committee for Medicinal Products for Human Use of the European Medicines Agency for LentiGlobin, and management said they intend to file for a marketing authorization application (MAA) with the European Union later this year. This would cut down the drug’s review time and move it closer to full approval.

Early Bird, Big Worm

The good news surrounding its pipeline paints a strong future outlook for BLUE, but in the short term it has faced an uphill battle against selling in the biotech sector. More specifically, gene therapy stocks have been hurt by some negative press. However, the action has only served to create bargain buying opportunities.

The biggest issues most investors have with small-cap biotechs is that they require great patience. In order to log big gains, you have to get in early – even before FDA approval becomes a possibility – and that means weathering the growing pains along the way.

That’s where we are with BLUE right now, as it tests its 2018 lows while investors wait for more positive news regarding its pipeline and also deal with competition concerns. I believe those who can handle the up-and-down trading will be well rewarded once FDA approval comes through and initiates a huge rally.

In the meantime, we can use short-term pullbacks like the ones we’re experiencing now as a chance to get in for the long haul with this innovative biotech. As a leader in CAR-T therapies, I believe BLUE will see great success in the future with at least one of the potential blockbusters currently in its pipeline.

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