Just weeks after two unexpected cases of blood cancer landed trials of its investigational gene therapies for sickle cell disease (SCD) and beta-thalassemia on FDA-issued clinical holds, Bluebird Bio Inc. said it's talking to regulators about their resumption after what RBC analyst Luca Issi called a "partial exoneration" of the BB-305 lentiviral vector (LLV) shared between the medicines.

The FDA's clinical hold applies to four studies overall, including the HGB-206 and HGB-210 studies of Lentiglobin for SCD (BB-1111) and the HGB-207 and HGB-212 studies of betibeglogene autotemcel for beta-thalassemia – a medicine conditionally authorized in the EU in June 2019 for certain patients 12 and older with transfusion-dependent beta-thalassemia.

Based on analyses to date, Bluebird said it's "very unlikely" that a case of acute myeloid leukemia (AML) reported in its phase I/II HGB-206 study of Lentiglobin was related to the BB-305 vector, but that it's still investigating a case of myelodysplastic syndrome (MDS) in another SCD trial participant. Company shares (NASDAQ:BLUE) rose 8.1% to $32.48 on March 10.

In addition to earlier findings of "several well-known genetic mutations and gross chromosomal abnormalities commonly observed in AML" in the SCD patient who developed it, Bluebird’s latest analysis identified the integration site for the vector within a gene called VAMP4, said Philip Gregory, Bluebird's chief scientific officer.

"VAMP4 has no known association with the development of AML nor with processes such as cellular proliferation or genome stability. Moreover, we see no significant gene misregulation attributable to the insertion event," he said.

"BB-305 LVV was present in the AML blast cells, but there was not sufficient information to determine causality," the company concluded.

RBC's Issi called the update "incrementally positive given no obvious evidence of insertional oncogenesis," though he said he expects an "uphill battle" with regulators and commercial adoption, a story that is already playing out in Europe.

The EMA, which earlier granted the beta-thalassemia therapy Zynteglo (betibeglogene autotemcel) a conditional marketing authorization, has now paused the renewal procedure for that grant while its Pharmacovigilance Risk Assessment Committee reviews the risks and benefits of the product. The committee will determine whether any additional pharmacovigilance measures are necessary. Meanwhile, Bluebird itself has temporarily suspended marketing of Zynteglo in Europe since it's manufactured using BB-305, just like Lentiglobin for SCD.

The case of the MDS that arose in another patient in the HGB-206 SCD study remains under investigation, Bluebird said. The focus of that investigation appears to be reaching a determination about whether clinical findings even meet the standard for MDS and, if so, if Lentiglobin for SCD had any role. The MDS diagnosis was based on prolonged anemia following an infusion of the medicine coupled with an observation of trisomy 8 in a small percentage of the patient's bone marrow cells, Bluebird said.

"However, no blasts or dysplastic cells were seen in an examination of the patient’s bone marrow, and while trisomy 8 is associated with myeloid malignancies, this finding is not sufficient for a diagnosis of MDS in the absence of blasts or dysplastic cells," it said March 10.

The evidence and Bluebird's arguments for their import appeared to land well not just with RBC, but with Mizuho Securities and J.P. Morgan analysts as well. Mizuho's team raised its estimated probability of success for the SCD and beta-thalassemia programs to 80% – a far cry from having written them off altogether earlier, assigning a 0% probability – while J.P. Morgan suggested "Lentiglobin’s path forward appears improved."

Still, Bluebird's share price, which fell 37.8% to $28.44 on Feb. 16 when the AML and MDS cases were first announced, is unlikely to fully rebound to levels seen before those disclosures, J.P. Morgan's Cory Kasimov wrote. That's partly due to the outstanding questions on the MDS case "as well as a lack of meaningful catalysts," he wrote.

Next on Bluebird's list of upcoming milestones is the March 27 PDUFA date for idecabtagene vicleucel (ide-cel, also known as BB-2121) in multiple myeloma. The B-cell maturation antigen-directed chimeric antigen receptor T-cell therapy, developed with Bristol Myers Squibb Co., is widely expected to win FDA approval, suggesting that success is already baked into Bluebird’s story on Wall Street. That puts the focus instead on "on commercial traction/competition," Kasimov wrote, news of which will unfold in the months to come.