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Bluebird up 75% YTD; BTIG cuts to neutral

July 1, 2017

Shares of bluebird bio Inc
BLUE 2.96%
have gained 75 percent since the start of 2017, which prompted analysts at BTIG to downgrade the biotech company at the forefront of fighting against cancer.

BTIG’s Dane Leone downgrades Bluebird’s stock rating from Buy to Neutral as many of the bullish catalysts are now fully factored into the stock. For instance, the stock’s valuation has “generally captured” data updates from ASCO and EHA.

Positive On Outlook But Not Enough To Remain Bullish

Meanwhile, Bluebird has a “good lead” over the competition in drugs targeting anti-BCMA and a Phase 1 study of bb21217 will commence in the bottom half of 2017. But at the same time competitive efforts from rivals will also ramp up, including Kite Pharma Inc
KITE 0.84%
, which will begin a study of a fully-human anti-BCMA CAR T therapy in the third quarter.

The analyst remains “more optimistic than most” regarding the LentiGlobin program for Beta-thalassemia and Sickle-cell disease. Also, the company’s broadening of its oncology efforts may be a source of concern among some investors but early success in bb2121 is indeed supportive of a “broader effort in larger markets with better defined patient populations.”

Bottom line, Bluebird will issue new updates from key programs in the coming months, but the stock’s valuation implies many of the positive events are reflected in the stock at current levels.

Latest Ratings for BLUE

Date Firm Action From To
Jun 2017 BTIG Research Downgrades Buy Neutral
Jun 2017 Standpoint Research Downgrades Buy Reduce
Jun 2017 BMO Capital Upgrades Market Perform Outperform

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