Gene therapy maker bluebird bio has agreed to be taken private by private equity firm Carlyle Group and SK Capital Partners in a cut-rate deal, amid a prolonged cash crunch struggle stemming from a challenging market for its products, according to a report by Reuters.
The buyout values bluebird at $3 per share, a 57.4% discount to its last closing price, implying an equity valuation of just $29.16m. This marks a dramatic decline from its 2018 highs, when bluebird’s stock traded around $150 per share. The company’s shares plunged 42% on Friday following the announcement.
Despite bluebird’s financial struggles, Carlyle and SK Capital see potential in its three FDA-approved gene therapies, including Lyfgenia, a treatment for sickle cell disease that has faced slow uptake due to its complex treatment process.
The investment firms have also structured a contingent payment of $6.84 per share, worth approximately $66.48m, but only if bluebird meets certain sales milestones — a move that highlights private equity’s focus on performance-based payouts in high-risk biotech deals.
Bluebird has been struggling for years, first flagging going concern doubts in 2021 and cutting 25% of its workforce in 2023 to focus on commercialising its therapies.
As of November 2024, only 57 patients had started treatment across its three approved therapies: Lyfgenia (sickle cell disease) – 17 patients treated; ynteglo (beta-thalassemia) – approved in 2022; and Skysona (rare neurological disorder) – approved in 2022.
Bluebird reported a cash balance of $118.7m (including $48m in restricted cash) as of 30 September, 2024, which was expected to fund operations only until early 2025.
