By Sriparna Roy and Leroy Leo
(Reuters) – Bluebird bio said on Thursday a large insurer had agreed to cover its newly approved sickle cell disease gene therapy, easing some investor worries about resistance from other payers over the high price of the treatment.
Bluebird’s treatment, Lyfgenia, was approved along with another gene therapy Casgevy from partners Vertex Pharmaceuticals and CRISPR Therapeutics.
Bluebird’s price of $3.1 million is nearly $1 million higher than its rival, despite Lyfgenia having a serious safety warning about blood cancer risk. That had raised concerns over whether it would get enough coverage from insurers versus its rival.
“We believe their ability to rapidly reach an agreement with a major commercial payer should help to start to quell any concerns that the high price of Lyfgenia would restrict access,” Baird analyst Jack Allen said.
The company reached an agreement with an insurer covering about 100 million people in United States and is also in advanced talks with many large insurers and Medicaid agencies.
Shares of bluebird were up 15% at $3.49 in morning trade.
However, concerns remain over the company’s ability to finance operations.
Bluebird’s shares have fallen about 50% so far this year, on track to fall for the sixth consecutive year in a row, making it difficult for the drugmaker to raise equity, said RBC Capital Markets analyst Luca Issi.
Adding to its woes, Bluebird had said on Friday it had not received an expected voucher from the U.S. drugs regulator after approval. It had preemptively sold rights to the voucher for $103 million in October.
Bluebird’s cash reserves are insufficient to run operations beyond June and it flagged ‘going concern’ doubts last month.
Some analysts have said the company would need to explore options such as a sale to launch the therapies.
“They need to take money however they can, or sell the entire company instead,” Wedbush analyst David Nierengarten told Reuters this week.
(Reporting by Sriparna Roy and Leroy Leo in Bengaluru; Editing by Krishna Chandra Eluri)
