bluebird bio Inc (NASDAQ:BLUE) currently is working on an improved production process transition for its pipeline LentiGlobin BB305, a product candidate aimed to treat thalassemia, a rare and potentially debilitating blood disorder, as well as severe sickle cell disease (SCD). In light of this enhanced pipeline development, Piper Jaffray analyst Joshua Schimmer provides a 2H16 outlook, reiterating an Overweight rating on shares of BLUE, while reducing the price target from $117 to $95, in light of the competitive landscape in sickle cell/beta thal.

The biotech firm recently stumbled upon the critical discovery that by adding specific compounds to the transfection process, the percentage of cells successfully modified amplifies. It is a crucial milestone revelation to the program, as modified cells are the ones with the power to ‘cure’ patients suffering from sickle-cell or beta-thal. Schimmer believes, “These changes are likely to be incorporated in 2H16 and lead to preliminary clinical results in 1H17, at which point we believe investors will have a much greater appreciation for the power of the product.”

Technically, LentiGlobin remains an “old” product for BLUE, regardless of designs for transformation. Further data updates on continued improvement in corrected Hb production are expected at the American Society of Hematology (ASH). The question awaits as to whether the improved production process will be enough to cure severely affected hemoglobinopathy patients. Schimmer notes, “That said, we’re squarely focused on “new/improved” LentiGlobin so any encouraging updates from the old version would be upside.”

Schimmer concludes, “We hope BLUE will further build out its pipeline focusing on genetic Orphan diseases that can leverage its gene therapy and gene editing capabilities.”

As usual, we advise taking analyst notes with a grain of salt. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer is ranked #3,977 out of 4,124 analysts. Schimmer has a 40% success rate and loses 6.3% in his yearly returns. When recommending BLUE, Schimmer faces a loss of 24.3% in average profits on the stock.

TipRanks analytics exhibit BLUE as a Buy. Based on 7 analysts polled in the last 3 months, 5 rate a Buy on BLUE, while 2 maintain a Hold. The consensus price target stands at $73.50, marking a 31% upside from where the stock is currently trading.

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Piper Jaffray Provides 2H16 Outlook for bluebird bio Inc (BLUE); Cuts Price Target