BMS - Better Buy: bluebird bio vs. Exelixis
Exelixis (NASDAQ: EXEL) and bluebird bio (NASDAQ: BLUE) are two biotech companies that have been moving in opposite directions on the stock market this year. While Exelixis has provided healthy gains -- its stock is up by 52.1% year to date -- Bluebird's shares have slid by 35.2% since the beginning of the year. Meanwhile, the S&P 500 is down by 10.9% year to date, so Bluebird's performance has been significantly worse than that of the broader market.
With this backdrop in mind, it might be tempting to pick Exelixis as the better stock to buy. But before counting out Bluebird, let's look into both companies' businesses -- as well as their most recent earnings reports -- and decide which is the better stock pick right now.
In my view, the best reason to consider buying shares of Bluebird is Zynteglo, a treatment for transfusion-dependent beta thalassemia (TDT) that was approved by the European Medicines Agency (EMA) in June 2019. This was a big deal, since before the approval of Zynteglo, TDT patients could only survive by receiving regular blood transfusions. Zynteglo is a one-time treatment that can cure TDT patients of this rare genetic blood disorder. This factor explains Zynteglo's exorbitant price tag: The treatment will cost 1.58 million Euros ($1.8 million) over five years.