With a better upfront offer on the table, enough bluebird bio investors have tendered their shares for the company's sale to go through early next week.
On Friday, private equity firms Carlyle and SK Capital revealed that they expect to complete the acquisition of bluebird on Monday. With an amended buyout agreement—bumping up their per-share offer from $3.00 to $5.00—Carlyle and SK have won the support of enough investors for the transaction to proceed.
When Carlyle and SK’s offer expired on Thursday, 59.8% of bluebird’s common stock had been tendered, versus the 25.6% figure two weeks earlier under the original deal structure. To close the deal, the parties needed 50% of the shares, plus one, to be tendered.
In the original offer, on top of paying $3.00 per share, the investment firms offered a one-time contingent value right (CVR) of an additional $6.84 per share payable in the unlikely event that they could boost sales of bluebird’s three gene therapies to $600 million over any 12-month period by the end of 2027.
Sales for the highly touted and highly priced treatments—Lyfgenia for sickle cell disease, Zynteglo for transfusion-dependent beta-thalassemia and Skysona for cerebral adrenoleukodystrophy—came in at $84 million for 2024 and $39 million in the first quarter of this year.
While Carlyle and SK’s original offer—which was revealed on Feb. 21—valued bluebird at roughly $29 million upfront, the new deal is worth about $45 million upfront. Even after the updated offer, the $3-per-share/CVR option was still on the table for those investors who wanted that deal structure.
With the transaction, 15-year-old bluebird is slated to become a private company.
Over the last month, bluebird urged investors to agree to the deal as the cash-strapped company faced the prospect of defaulting on its loan agreements with Hercules Capital and potentially declaring bankruptcy.
The bargain basement buyout comes for a company that was once valued at more than $10 billion. It also casts a dark shadow over the gene therapy field, which is undergoing an industrywide reckoning.
Bluebird’s difficulties with commercializing its gene therapies began in Europe, where it was unable to reach a consensus with regulators on a fair price for Zynteglo. Bluebird eventually pulled up stakes there in 2021, with CEO Andy Obenshain calling the market “broken” and the situation “untenable for a small innovative company at this time.”
In the U.S., bluebird had expected sales to increase rapidly for Zynteglo and Skysona, which were approved by the FDA a month apart in 2022 and were priced at $2.8 million and $3 million, respectively.
Then in December of 2023, the nod for Lyfgenia was expected to be a game-changer as it was for a much larger patient population. But while bluebird priced Lyfgenia at $3.1 million, Vertex priced its rival CRISPR gene editing therapy Casgevy—which was approved the same day—at $2.2 million.