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Understanding bluebird bio’s Operational Performance

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Dec. 19 2018, Updated 9:53 a.m. ET

Revenue forecast

In 2018 and 2019, bluebird bio (BLUE) is expected to generate revenues of $43.62 million and $67.0 million, respectively, compared to its revenue of $35.43 million in 2017. Meanwhile, peers Amgen (AMGN), Sarepta Therapeutics (SRPT), and Vertex Pharmaceuticals (VRTX) are expected to generate revenues of $23.36 billion, $301.13 million, and $2.99 billion, respectively, in 2018.

bluebird’s cash per share is $31.45, while Amgen, Sarepta, and Vertex have cash per share of $45.66, $11.62, and $11.73, respectively.

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Operating expenses

In the latest quarter of this year, bluebird bio’s general and administrative expenses rose YoY (year-over-year) to $44.53 million from $22.98 million due to higher compensation expenses and professional and consulting fees. Meanwhile, its R&D (research and development) expenses rose YoY to $116.74 million from $61.54 million due to higher employee expenses and research costs. Its R&D expenses are expected to be $449.71 million and $492.95 million, respectively, in 2018 and 2019 compared to $273.04 million in 2017.

In comparison, peers Amgen (AMGN), Sarepta Therapeutics (SRPT), and Vertex Pharmaceuticals (VRTX) are expected to incur 2018 R&D expenses of $3.52 billion, $310.49 million, and $1.21 billion, respectively. In the third quarter, bluebird’s total operating expenses rose YoY to $161.35 million from $85.37 million, and its operating loss widened YoY to $149.82 million from $77.66 million.

Valuation metrics

bluebird’s EV (enterprise value) is $4.11 billion, and its EV-to-revenue ratio is 104.16x. Its price-to-sales ratio is 142.72x, and its price-to-book ratio is 2.78x. Amgen’s, Sarepta’s, and Vertex’s price-to-book ratios are 8.54x, 11.98x, and 14.58x, respectively.

Next, we’ll look at analysts’ views on bluebird stock.

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