Why Bluebird Bio stock plummeted into the red on Tuesday

Investors were clearly feeling depressed. Bluebird Bio (blue -9.15%) On Tuesday. Collectively, they sent the commercial-stage biotech stock down more than 9% in Tuesday trading, not long after an analyst lowered his price target on the stock. That price drop was much more dramatic than a 1% drop. S&P 500 Jisoo of that day.

HSBC makes major price cuts

After the market closes on Monday, HSBCMorten Herholt reduced Bluebird Bio’s fair value assessment to $1.02 per share. This is a 56% reduction from the previous level of $2.31. Herholt has been generally bearish on the company for some time, maintaining a reduce (i.e. sell) recommendation on the biotech company’s stock.

It was not immediately clear why Herholt cut prices so drastically. But he’s not the only analyst or investor who has pushed the stock lower.

Although Bluebird has had some significant successes, business progress has not been great. The company, which specializes in gene-editing therapies, scored a major regulatory victory when its Zynteglo transfusion-dependent beta thalassemia (TDT) drug won marketing approval in the European Union in 2019.

But getting the expensive drug to market proved quite difficult, and less than three years later European authorities withdrew approval.

I need a bigger win

Biotech stocks tend to be highly volatile investments because they depend so much on what happens in the lab. While Bluebird has proven that it can successfully bring products to market, it has yet to demonstrate that it can achieve meaningful long-tail success with one of its drugs. Despite the company’s potential, investors will continue to sit on the fence until that happens.