a paper was published in 2010 showing signs that its gene therapy might have a profound effect, in humans, on a rare disease known as adrenoleukodystrophy, or ALD.
“We decided, let’s look at it with a fresh pair of eyes—let’s look at it with Genzyme, they were the 800-pound gorilla in gene therapy at the time,” said Bluebird CEO Nick Leschly, who at the time was a Third Rock partner. “If they can get convinced that they can manufacture this virus, then we can get convinced that we could take that clinical data and go for it.”
Third Rock’s initial investment thesis was if the therapy could work for ALD alone, it was enough to take the risk, and “everything else was gravy,” according to Leschly. But it was very concerned about the manufacturing of the viral vector needed to perform the therapy. When Genzyme decided to co-invest and perform extensive due diligence on the company’s manufacturing process, Third Rock decided to move ahead.
“[That] gave us significant comfort in the deal,” said Third Rock partner Neil Exter.
—“It was a dark, gloomy place—you walked in, and you were depressed.” One of the initial challenges Third Rock faced was to change the culture of then-Genetix—it was barely surviving, and needed an overhaul. The firm let go all the employees except two. It then began to build it back up, and renamed it, of all things, Bluebird.
“It had nothing to do with gene therapy—nothing to do with anything other than ‘what’s that about?” Leschly said. “That was sort of the angle.”
Leschly spoke to trying to “reset the passion” for what newly-named Bluebird was trying to do. So he took the leap himself. A few months into his initial role as interim CEO, he left Third Rock to head the company, and instilled a culture giving employees the freedom, for example, to wear what makes them comfortable.
“Let people be themselves, they’re much more productive,” he said. “For me, it’s [about] being comfortable, and also to set a tone of let’s not take ourselves too seriously—because what we work on is extremely serious.”
—“The good news is, it was a catastrophic failure.” Leschly recounted that Bluebird’s first manufacturing run to create a viral vector was a complete bust—he got a call from his chief scientific officer, who told him it had produced no virus whatsoever.
“That was the best thing that ever happened to Bluebird,” he said.
Leschly, who had just traded a steady job in venture capital for a gamble on Bluebird, said that the near-death experience was a catalyst. He gathered every Bluebird employee into a room and told them, “we are toast until we figure out what’s wrong,” likening the company to Apollo 13 hurtling towards the Earth destined to crash. He says from that moment on, everyone stepped up, and the science and manufacturing behind the company shored up in kind.
“As painful as that was, it allowed us to get to another level,” he said.
—“Orphan is what got us in the room, and gene therapy was the explanation.” Given the failures of gene therapy in the past, how was Bluebird able to raise so much money from both public and private investors? Leschly notes that Bluebird had to be careful in the way it told its story to generate excitement rather than fear. To do so, it started with the rare disease it was going after, rather than the method it was using to do it.
“We needed to retrain peoples’ receptors from not running to the [other] side of the room when you heard the words gene therapy to, ‘just hold on, let us tell you the data,’” he says. “So it really became gene therapy at the intersection of orphan diseases very quickly.”
What Bluebird didn’t anticipate, however, was that gene therapy “all of a sudden got interesting.” Large pharmaceutical companies started investing in the field again, and it woke investors up, and buoyed Bluebird as it tried to raise more cash—ultimately carrying out one of the most successful biotech IPOs this year.
“I’d love to say it was planned. No, it was good timing I think with a good story, and that combination led to a successful IPO,” he said.
