Grizzly Research has placed a short bet on BlueBird Bio, saying the gene therapy-focused biotechnology company is likely heading toward a liquidation or dissolution amid dwindling drug prospects and a shrinking cash balance.
‘‘The company’s valuation relies on dubious future revenue projections, and present-day dilutive financings to keep the game going forward,’’ said Grizzly in a short report Wednesday.
BlueBird recently commercialized two gene therapy treatments in the U.S, but as of May 9, only a single injection of each treatment was administered, the short report claimed, adding that the company likely ‘‘overstated and inflated its presented projections and total addressable market numbers to portray an exciting economic outlook for the next few years.’’
Despite Grizzly’s attack, BlueBird shares were up 1% at $3.34 each as of 10:10 a.m. EDT Wednesday. However, this is a far cry from the $8 they were quoted at in January and more than $120 five years ago.
Grizzly believes BlueBird’s previous executives and directors were aware of the company’s dim prospects and decided to leave en masse when the company spun off its oncology department in late 2021.
The short seller also argued that BlueBird’s technology is outdated compared to competitors and noted that the company is in the middle of a ‘‘fierce’’ legal battle against San Rocco Therapeutics alleging fraud, unfair competition, and unjust enrichment.
Insightia’s Vulnerability module profiled Bluebird Bio in 2020 citing red flags favorable to an activist investor such as lagging shareholder returns.