A proposed class action lawsuit filed Thursday in a Massachusetts district court accuses Massachusetts-based biotechnology company Bluebird Bio Inc. of misleading investors by downplaying safety concerns regarding its gene therapy for sickle cell disease, resulting in significant damages when stock prices plummeted.
False Representations and Investor Deception
The suit alleges that Bluebird Bio deliberately made false and misleading statements concerning its product candidate, Lyfgenia, before FDA approval, in a bid to inflate expectations and bolster share prices. Led by Garry Gill, investors claim the company misrepresented the likelihood of obtaining a priority review voucher from the FDA and subsequently selling it to fortify their financial standing ahead of the therapy’s market launch.
Concealed Risks and Market Deception
According to the complaint, Bluebird Bio also gave investors a false impression that the FDA would approve the therapy without a “black box” warning – the most severe type – regarding the risks of developing blood cancer. However, upon FDA approval of Lyfgenia on December 8, 2023, it was revealed that the regulator added a black box warning highlighting the risk of blood cancer development, causing a substantial drop in stock prices from $4.81 per share on December 7, 2023, to $2.86 on December 8, 2023.
Biotech Co Inflated Gene Therapy Prospects : Market Fallout and Legal Action
The investors, represented by Shannon Hopkins and Adam Apton of Lexi & Korsinsky LLP, assert that Bluebird Bio engaged in a deliberate scheme to deceive the market. The proposed class includes all investors who purchased or acquired Bluebird stock between April 24, 2023, and December 8, 2023, seeking compensation for their losses.
Company Response and Legal Proceedings
Bluebird Bio, along with its CEO Andrew Obenshain, CFO Christoper Krawtschuk, and CMO Richard Colvin, faces legal action. However, attorneys for the stockholders were unavailable for immediate comment, and a press representative for Bluebird did not respond to requests for comment.
