Goldman Hopes Biotech Investors Keep Singing About These Blues

Biotechnology investors are seeing double Tuesday as two Cambridge, Massachusetts-based firms whose names start with "Blue" head to the equity market to raise cash for promising treatments in blood disorders.
 
Bluebird Bio Inc. and Blueprint Medicines Corp. launched secondary offerings Monday after data presented at the American Society of Hematology meeting in Atlanta spurred their shares to record high closes. The similarities don’t end there as Goldman Sachs is among banks leading both offerings and gave both stocks their highest 12-month price targets among analysts surveyed by Bloomberg. Both offerings are slated to price Tuesday night.

“The decision to raise money at a 52-week high is not a surprise as biotechs need a lot of capital,” Wedbush’s David Nierengarten, one of the few analysts who covers both companies, said in a telephone interview. “If you know you need to raise money, you should take advantage of the high stock prices.”

Nierengarten said he’d recommend Blueprint if forced to choose between the two offerings, though both may present discounted entry points for the stocks. While rating both stocks at outperform, he sees Blueprint as having a “large opportunity in advanced systemic mastocytosis that is less well appreciated” by investors.

— With assistance by Drew Singer

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