If you invested $1,000 in Bluebird Bio in 2019, this is how much you would have today.

gene editing expert Bluebird Bio (blue -5.36%) Since 2019, beta-thalassemia (TDT) treatment Zynteglo, one of the groundbreaking treatments, has generated a lot of buzz since it received marketing approval for the first time in Europe. A lot has happened since then. Although it gained further regulatory approval in Europe and the United States, it had to withdraw from the European market.

However, Bluebird stock has not been a particularly good investment during this period. Let’s take a look at how many people who bought $1,000 worth of the company’s stock in early 2019 would now own, and what this means for investors going forward.

BLUE total return level data from YCharts.

disastrous performance

Bluebird has made some progress over the past five years, but it has been slow. The expression “progress is a slow process” certainly applies here. Moreover, biotech faces a series of headwinds. In particular, some products have come under scrutiny by regulators due to suspected side effects, leading to clinical holds.

The reason Bluebird left the European market is also worth highlighting. The high price of gene-editing treatments (Zynteglo costs €1.58 million in the Old Continent) has made it difficult to close deals with third-party payers. The combination of these problems (and others) caused Bluebird’s stock price to plummet. As can be seen in the graph, biotech has recorded a negative compound annual growth rate of 53.58% over the past five years.

So how much would an investor who invested $1,000 in a company in 2019 have now? The answer is approximately $21.55. That same $1,000 would have turned into around $1,948.32 if invested in an ETF that tracks: S&P 500This takes into account the index’s CAGR of 14.3% over the past 50 years.

Is there hope for Bluebird?

Bluebird achieved a major milestone late last year when it won approval for Lyfgenia, a gene-editing treatment for sickle cell disease (SCD). This is the most promising of the three products approved by the company. Lyfgenia’s target market in the United States is approximately 20,000 patients. Bluebird’s other gene-editing treatments target up to 1,540 people, less than 10 times the number of patients eligible for Lyfgenia.

This new SCD treatment costs $3.1 million per course of treatment, so the company is looking at a potential opportunity worth $62 billion. But there is a problem. There is actually more than one.

First, Lyfgenia has a warning about blood cancer. The risk is small but real.

Second, it will compete with Casgevy, another newly approved SCD treatment developed by a team from the School of Medicine. CRISPR therapeutics and Vertex Pharmaceuticals. Casgevy will be priced at $2.2 million in the US, has no box warnings, and is being sold by a company with significantly more funding than Bluebird: Vertex Pharmaceuticals.

Still, given that there are few treatment options for SCD, we can expect Lyfgenia to find some success in the market, but will it be enough to revive Bluebird’s hopes? My view is that the risks are too high.

Yes, Bluebird’s stock price could soar if Lyfgenia fully executes its commercialization plans and captures a significant share of the U.S. SCD market within the next five years. But in biotechnology there is no room for error. Any significant headwinds at this point could lead to bankruptcy or worse.

This is why Bluebird Bio appears to be too risky a stock to invest in right now. It’s not clear whether we’ll do much better in the coming years than we did over the past five years. Fortunately, there are other great biotech stocks to consider buying.