Q2 2024 bluebird bio Inc Earnings Call

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Operator: music playing music playing Thank you for standing by. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bluebird Bio-second quarter 2024 results call. All lines have been placed on mute to prevent any background noise.

Pam: Thank you for standing by. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bluebird Bio second quarter 2024 results call.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Courtney O'Leary of Investor Relations. You may begin.

Pam: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

Pam: If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Pam: If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the conference over to Courtney O'Leary of Investor Relations. You may begin.

Courtney O'leary: Good morning, everyone, and thank you for joining our second quarter, 2024 results call today. My name is Courtney O'Leary, Director of Investor Relations at Bluebird Bio. Before we begin, let me review our safe harbor statement. Today's discussion contains statements that are forward-looking under the Private Securities Litigation Reform Act of 1995, including expectations regarding our future financial results and financial position, in addition to statements of the company's plans, expectations, or intentions regarding regulatory progress, commercialization plans, and business operations. Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from projected results.

Courtney O'leary: Good morning, everyone, and thank you for joining our second quarter, 2024 results call today. My name is Courtney O'Leary, director of investor relations at Bluebird Bio.

Courtney O'leary: Before I begin, let me review our Safe Harbor Statement.

Courtney O'leary: Today's discussion contains statements that are forward-looking under the Private Securities Litigation Reform Act of 1995.

Courtney O'leary: including expectations regarding our future financial results and financial position, in addition to statements of the company's plans, expectations, or intentions regarding regulatory progress, commercialization plans, and business operations.

Courtney O'leary: Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from projected results.

Courtney O'leary: A description of these risks is contained in our filings of the SEC, which are available on the investor relations section of our website, www.bluebirdbio.com.

Courtney O'leary: [inaudible] A description of these risks is contained in our filings with the SEC, which are available on the investor relations section of our website, www.bluebirdbio.com. On today's call, Andrew Obenshain, Bluebird Bio CEO, will provide opening remarks. Then, Tom Klima, Chief Commercial and Operating Officer, will provide updates on the commercial launches of Lithgenia, Centiglo, and Skisona. And lastly, Bluebird CFO, James Sterling, will provide a financial update before opening the call up for Q&A. With that, I will turn it over to Andrew. Thanks, Court

Courtney O'leary: On today's call, Andrew Obenshain, Bluebird Bio's CEO, will provide opening remarks.

Speaker Change: Then Tom Klima, Chief Commercial and Operating Officer, will provide updates on the commercial launches of Lufgenia, Zantaglo, and SkySona. And lastly, Bluebird CFO James Sterling will provide a financial update before opening the call up for Q&A. With that, I will turn it over to Andrew.

Courtney O'leary: And thank you everyone for joining our call this morning. Over the past year, Bluebird has built what we believe to be an unrivaled commercial gene therapy foundation with three ongoing launches. We've seen that translate into a robust network of qualified treatment centers, proven access to and reimbursement, and demonstrated demand for our therapies for both patients and providers. Today, we'll provide you with additional insight into our commercial performance, grounded in real-world experience that helps inform expectations and modeling for our launch. This morning, we announced that we've renegotiated our agreement with Eric Lee's capital.

Andrew Obenshain: Thanks, Courtney, and thank you, everyone, for joining our call this morning.

Tom Klima: Over the past year, Bluebird has built what we believe to be an unrivaled commercial gene therapy foundation with three ongoing launches. We've seen that translate into a robust network of qualified treatment centers, proven access and reimbursement, and demonstrated demand for our therapies for both patients and providers.

Tom Klima: Today, we'll provide you with additional insight into our commercial performance, grounded by a real-world experience that helps inform expectations and modeling for our launches.

Andrew Obenshain: And on today's call, we will also provide you with details of our business execution in the cash run. I'll now hand it over to Tom to discuss the progress in our commercial launches in greater detail. Thanks, Andrew.

Tom Klima: This morning we announced that we've renegotiated our agreement with Hercules Capital, and on today's call we will also provide you with details on our business execution and cash runway.

Tom Klima: I will now hand it over to Tom to discuss the progress in our commercial launches in greater detail.

Tom Klima: And good morning, everyone. Nearly 24 months following our first FDA approval, we have made incredible strides in building and strengthening our gene therapy commercial infrastructure. We are beginning to see the results of this hard-won experience with an unparalleled network of over 70 qualified treatment centers, far beyond our original goal of between 40 and 50 QGCs. We have clear and established paths to access for all of our therapies, and strong demand with rapid acceleration and patient starts on the horizon for both Taiklo and Lithgenia.

Tom Klima: Thanks Andrew, and good morning everyone. Nearly 24 months following our first FDA approval, we have made incredible strides in building and strengthening our gene therapy commercial infrastructure.

Tom Klima: We are beginning to see the results of this hard-won experience with an unparalleled network of over 70 qualified treatment centers far beyond our original goal of between 40 and 50 QTCs.

Tom Klima: We are extremely encouraged by the excitement from patients and providers. We continue to hear consistently through direct conversations at QTCs at conferences and even on recent KOL calls that there is immense enthusiasm for gene therapy among the patient communities we aim to serve.

Tom Klima: We have clear and established paths to access for all of our therapies and strong demand with rapid acceleration and patient starts on the horizon for both Syntaglo and Lufgenia.

Tom Klima: We are extremely encouraged by the excitement from patients and providers.

Tom Klima: We continue to hear consistently through direct conversations at QTCs, at conferences, and even on recent KLL calls.

Tom Klima: that there is immense enthusiasm for gene therapy among the patient communities we aim to serve. And there is confidence and belief in our data, which recently surpassed more than 1,000 patient years of experience.

Tom Klima: And there is confidence and belief in our data, which recently surpassed more than 1000 patient years of experience. Today, we announce 27 patient starts or cell collections have been completed across our portfolio so far in 2024, including 19 fours in Taglo, four fours in Virginia, and four fours in Skysona. Looked at another way, we have completed 23 combined patient starts in the U.S. alone across beta-thalacymia and sickle cell disease in 2024, with a total of 43 patient starts in approval for both.

Tom Klima: Today, we announce 27 patient starts or cell collections have been completed across our portfolio so far in 2024.

Tom Klima: including 19 for Zintaglo, 4 for Lipgenia, and 4 for Skysona.

Tom Klima: Looked at another way, we have completed 23 combined patient starts in the U.S. alone across beta thalassemia and sickle cell disease in 2024, with a total of 43 patient starts since approval of both.

Tom Klima: And our launch momentum continues to build with more than 40 additional patients already scheduled for cell collection across our commercial portfolio to the end of the year, and more being added every week. Importantly, approximately half of these patients are individuals living with sickle cell disease.

Tom Klima: And our launch momentum continues to build, with more than 40 additional patients already scheduled for cell collection across our commercial portfolio to the end of the year, and more being added every week. Importantly, approximately half of these patients are individuals living with sickle cell disease.

Tom Klima: We are especially encouraged that because of our extensive QTC network, patients have broad access to our therapy. Today, patients have initiated or scheduled for treatment across more than 20 unique QTCs. And we clearly have tremendous room for additional growth as the 70 plus centers in our network begin to initiate the treatment process. Forza Antiglo, demand continues to be very strong, and we anticipate continued growth in the second half of the year, following a recent expansion at our Lawns of Facility, which doubles our manufacturing capacity forza Antiglo in Skyson. All of this reinforces the acceleration we projected in the second half of the year and gives us confidence in our ability to complete approximately 85 starts across our portfolio this year.

Tom Klima: We are especially encouraged that because of our extensive QTC network, patients have broad access to our therapies.

Tom Klima: To date, patients have initiated or scheduled for treatment across more than 20 unique QTCs, and we clearly have tremendous room for additional growth as the 70-plus centers in our network begin to initiate the treatment process.

Tom Klima: For Zintegro, demand continues to be very strong, and we anticipate continued growth in the second half of the year following the recent expansion at our Lanza facility, which doubles our manufacturing capacity for Zintegro and SkySona.

Tom Klima: All of this reinforces the acceleration we projected in the second half of the year and gives us confidence in our ability to complete approximately 85 starts across our portfolio this year.

Tom Klima: Additionally, we've recently completed the manufacturing and release testing for the first commercial Lifgenia patient, and the first infusion is being scheduled. This is an incredibly exciting milestone. In this case, we completed this manufacturing and release testing on time, and we now anticipate recognizing our first Lifgenia revenue in the third or fourth quarter. Now, moving to access and reimbursement. Our goal has always been timely, equitable access to our therapy. We are extremely encouraged by the speed with which both commercial and many government payers are approving pathways to patient access, particularly with Lithgenia for sickle cell disease.

Tom Klima: Additionally, we recently completed the manufacturing and release testing for the first commercial Lifgenia patient and first infusion is being scheduled.

Tom Klima: This is an incredibly exciting milestone. In this case, we completed this manufacturing and release testing on time, and we now anticipate recognizing our first Lithgenia revenue in the third or fourth quarter.

Tom Klima: Now moving to access and reimbursement. Our goal has always been timely, equitable access to our therapies.

Tom Klima: We are extremely encouraged by the speed with which both commercial and many government payers are approving pathways to patient access, particularly with Lithgenia for sickle cell disease We are extremely encouraged by the speed with which both commercial and many government payers are approving pathways to patient access to patient access to patient access to patient access to patient access to patient access

Tom Klima: In just seven months, more than half of sickle cell patients insured by Medicaid live in a state that has affirmed coverage for it, with Virginia. This includes multiple states, including California, Pennsylvania, and Louisiana, that have published coverage policies that are aligned to clinical trial criteria.

Tom Klima: In just seven months, more than half of sickle cell patients insured by Medicaid live in a state that has affirmed coverage to Virginia. This includes multiple states, including California, Pennsylvania, and Louisiana, that have published coverage policies that are aligned to clinical trial criteria.

Tom Klima: 20% of patients live in a state that has already completed prior authorization approval for Lithgenia for at least one patient. This means that Medicaid is moving patients through the process. I specifically want to highlight that in June, Lifgeny was placed on a preferred drug list in the state of Florida, a critical step to unlocking access for one of the largest sickle cell Medicaid populations in the country. We currently have four qualified treatment centers in Florida, and patients are eager for treatment.

Tom Klima: 20% of patients live in a state that has already completed prior authorization approval for Lifgenia for at least one patient. This means that Medicaid is moving patients through the process.

Tom Klima: I specifically want to highlight that in June, Lifgenia was placed in my preferred drug list in the state of Florida, a critical step to unlocking access for one of the largest sickle cell Medicaid populations in the country. We currently have four qualified treatment centers in the state of Florida, and patients are eager for treatment.

Tom Klima: On the commercial pair side, we have multiple outcomes-based agreements with national commercial pairs in place for Lithuania, and published coverage policies in place for more than 200 million U.S. lives. Additionally, timely access to Zynteglo and Skysona has continued with zero ultimate denials for either therapy across both Medicaid and commercial payers. Moving to our QTC network. Today, Bluebird has activated over 70 total QTCs for Lifgenia and Zantagelo in the US, approximately three times the size of others in the field. Additionally, six of the centers in our network have also been activated to administer SkySona for patients with CLD.

Tom Klima: On the commercial payer side, we have multiple outcomes-based agreements with national commercial payers in place for Lipgenia and published coverage policies in place for more than 200 million U.S. lives.

Tom Klima: Additionally, timely access to Zynteglo and SkySona has continued with zero ultimate denials for either therapy across both Medicaid and commercial payers.

Tom Klima: Moving to our QTC network. Today, Bluebird has activated over 70 total QTCs for Lyfgenia and Zyntegla in the US, approximately three times the size of others in the field.

Tom Klima: Additionally, six of the centers in our network are also activated to administer Skysona for patients with CALD.

Tom Klima: As I mentioned earlier, patients are scheduled for treatment with a bluebird gene therapy at more than 20 QTCs, showcasing the benefit of our vast experience network. We continue to see key differentiators that are driving preference for Lithgenia Most recently in market research that we conducted in Q2 across our QTC network, we found that the majority preferred Lithgenia over our competitor across a wide range of key measures, including efficacy, mechanism of action, manufacturing turnaround time, self-collection and manufacturer flexibility and support, To recap, the Zintegra launch is outperforming our initial expectations and we anticipate acceleration through the remainder of the year with our newly expanded capacity, as projected to lift any other launches accelerating with access to expanding at a rapid clip and many patients scheduled to begin the treatment journey.

Tom Klima: As I mentioned earlier, patients are scheduled for treatment with a bluebird gene therapy at more than 20 QTCs, showcasing the benefit of our vast experience network.

Tom Klima: We continue to see key differentiators that are driving preference for Lithgina.

Tom Klima: Most recently, in market research that we conducted in Q2 across our QTC network, we found that the majority preferred Lufgenia over our competitor.

Tom Klima: Across a wide range of key measures, including efficacy, mechanism of action, manufacturing turnaround time, cell collection, and manufacturer flexibility and support.

Thank you for standing by.

Pam: My name is Pam and I will be your conference operator today. At this time, I would like to welcome everyone to the bluebird bio-second quarter 2024 results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Thank you.

Tom Klima: To recap, the Zentegra launch is outperforming our initial expectations and we anticipate acceleration through the remainder of the year with our newly expanded capacity.

Tom Klima: As projected, the Leuphgenia launch is accelerating, with access expanding at a rapid clip, and many patients scheduled to begin the treatment journey.

Tom Klima: And the Sky Zone of Lunch continues to progress this plan, with five to ten patient starts expected this year. As we look towards the back half of the year, we have more than 40 patient starts already scheduled, and we are on track for approximately 85 patient starts across our portfolio. And now, I would like to turn the call over to Jane.

Tom Klima: And the SkySona launch continues to progress as planned, with 5 to 10 patient starts expected this year. As we look towards the back half of the year, we have more than 40 patient starts already scheduled, and we are on track for approximately 85 patient starts across our portfolio.

Courtney O'leary: I would now like to turn the conference over to Courtney O'Leary of Investor Relations. You may begin.

Good morning everyone and thank you for joining our second quarter 2024 results call today. My name is Courtney O'Leary, Director of Investor Relations of Bluebird Bio. Before we begin, let me review our safe harbor statement. Today's discussion contains statements that are forward looking under the private security's litigation reform act of 1995. Including expectations regarding our future financial results and financial position and addition to statements of the company's plans, expectations or intentions regarding regulatory progress, commercialization plans, and business operations. Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from productive results.

James Sterling: Thank you. Thank you, Tom. And good morning, everyone. It's great to be a bluebird.

Tom Klima: And now I would like to turn the call over to James.

James: Thank you, Tom, and good morning everyone. It's great to be at Bluebird and I look forward to getting to know many of you in the months ahead.

James Sterling: And I look forward to getting to know many of you in the months ahead. It's an exciting time to join the company in the midst of three transformative lines. I first want to acknowledge that our restatement is ongoing with a tremendous amount of work by our finance and accounting team. We are moving as quickly as we can to complete the restatement, which, as we've previously stated, is not expected to impact our cash or revenue, and we look forward to putting this chapter behind us.

James: It's an exciting time to have joined the company in the midst of three transformative launches.

Speaker Change: I first want to acknowledge that our restatement is ongoing with a tremendous amount of work by our finance and accounting team.

Speaker Change: We're moving as quickly as we can to complete the restatement which as we previously stated is not expected to impact our cash or revenue and we look forward to putting this chapter behind us. We're moving as quickly as we can to complete the restatement which as we can to complete the restatement which as we previously stated is not expected to impact our cash or revenue and we look forward to putting this chapter behind us.

James Sterling: In the meantime, we recognize the importance of providing you with an update on company performance, and I'm pleased today to highlight our Q2 results. In the second quarter, we reported $16.1 million in total revenue, up from $6.9 million in the prior year period.

Speaker Change: In the meantime, we recognize the importance of providing you with an update on company performance and I'm pleased today to highlight our Q2 results.

A description of these risks is contained in our fileings of the SEC, which are available on the Investor Relations section of our website, www.bluebirdbio.com.

Speaker Change: In the second quarter, we reported $16.1 million of total revenue, up from $6.9 million in the prior year period.

James Sterling: As previously guided, in 2024, we continue to anticipate growth to net discounts in the range of 20 to 25 percent, with fluctuations based on products and pay or mix, as well as utilization of our outcomes-based agreement. I also wanted to provide a few data points that you might find helpful for modeling. Since our first FDA approval 24 months ago, we've collected cells from 53 patients across our three products. Cell collections are the value-creating moment, and to date, every patient who has had their cells collected has either completed an infusion or remains in the process.

Speaker Change: As previously guided, in 2024 we continue to anticipate gross-to-net discounts in the range of 20 to 25 percent, with fluctuations based on product and payer mix, as well as utilization of our outcomes-based agreements.

Andrew Obenshain: On today's call, Andrew Obenchain, Bluebird Bio's CEO will provide opening remarks.

Tom Cleema: Then Tom Cleema, Chief Commercial and Operating Officer, will provide updates on the commercial launches of Los Genia, Centiglo, and Scasona.

James Sterling: And lastly, Bluebird CFO, James Sterling will provide a financial update before opening the call up for Q&A.

Speaker Change: I also wanted to provide a few data points that you might find helpful for modeling.

James Sterling: Of the 53 patients who started cell collection, 31 have been infused, so we've already recognized revenue associated with those patients. We expect more than half of the remaining 22 patients will receive their infusions in the second half of this year. As a reminder, revenue is recognized at the time of. For additional context, the process for Zintegra was designed to take between 70 to 90 days from cell collection to delivery.

Speaker Change: Since our first FDA approval 24 months ago, we have collected cells from 53 patients across our three products.

Andrew Obenshain: With that, I will turn it over to Andrew. Thanks, Courtney, and thank you everyone for joining our call this morning. Over the past year, Bluebird has built what we believe to be an unrivaled commercial gene therapy foundation with three ongoing launches. We've seen that translate into a robust network of qualified treatment centers, proven access and reimbursement, and demonstrated demand for our therapies for real patients and providers. Today, we'll provide you with additional insight into our commercial performance, grounded by a real-world experience that helps inform expectations and modeling for our launches.

Speaker Change: Cell collections are the value-creating moment, and to date every patient who has had their cells collected has either completed an infusion or remains in the process.

Speaker Change: Of the 53 patients who started cell collection, 31 have been infused, so we've already recognized revenue associated with those patients.

Speaker Change: We expect more than half of the remaining 22 patients will receive their infusions in the second half of this year.

Speaker Change: As a reminder, revenue is recognized at the time of infusion.

Andrew Obenshain: This morning, we announced that we've renegotiated our agreement with Farkley's capital. And on today's call, we will also provide you with details in our business execution and cash runway.

Speaker Change: For additional context, the process for Zantegla was designed to take between 70 to 90 days from cell collection to delivery.

James Sterling: While we have successfully completed manufacturing and release testing within this time frame, our real world commercial evidence and your experience to date are showing us that it is taking about a month longer on average for this first set of patients. We are implementing process improvements, and we expect this timeline will improve over time. Once the hospital receives the drug, the patient then needs to be scheduled for an infusion, which is driven by scheduling preferences and availability of both the hospital and the patient.

Tom Cleema: I'll now hand it over to Tom to discuss the progress in our commercial launches in greater detail.

Speaker Change: While we have successfully completed manufacturing and release testing within this time frame, our real-world commercial evidence and experience to date is showing us that it is taking about a month longer on average for this first set of patients.

Tom Cleema: Thanks, Andrew, and good morning, everyone. Nearly 24 months following our first FDA approval, we have made incredible strides in building and strengthening our gene therapy commercial infrastructure. We are beginning to see the results of this hard-won experience with an unparalleled network of over 70 qualified treatment centers far beyond our original goal of between 40 and 50 QTCs. We have clear and established paths to access for all of our therapies and strong demand with rapid acceleration and patient starts on the horizon for both Syntaglo and Lithgenia.

Speaker Change: We are implementing process improvements and we expect this timeline will improve over time.

Speaker Change: Once the hospital receives the drug, the patient then needs to be scheduled for infusion, which is driven by scheduling preferences and availability of both the hospital and the patient.

James Sterling: As Tom noted, we've completed drug product manufacturing for the first commercial Lifgenia run, which is still too early to predict the average real world timelines from manufacturing to infusion for Lifgenia. For modeling purposes, for both Zinteglo and Lufgenia, we recommend assuming two quarters between initial cell collection and revenue recognition. Looking ahead, we want to manage expectations that revenue will fluctuate quarter to quarter, mainly due to varying manufacturing cycles.

Tom Klima: As Tom noted, we have completed drug product manufacturing for the first commercial Lifgenia run, which is still too early to predict the average real-world timelines from manufacturing to infusion for Lifgenia.

Tom Cleema: We are extremely encouraged by the excitement from patients and providers. We continue to hear consistently through direct conversations at QTCs, at conferences, and even on recent KOL calls that there is immense enthusiasm for gene therapy. Among the patient communities, we aim to serve. And there is confidence and belief in our data, which recently surpassed more than 1,000 patient years of experience.

Speaker Change: For modeling purposes for both Zinteglo and Lifenia, we recommend assuming two quarters between initial cell collection and revenue recognition.

Speaker Change: Looking ahead, we want to manage expectations that revenue will fluctuate quarter-to-quarter, mainly due to varying manufacturing cycle times.

James Sterling: For example, we anticipate a drop in revenue in the third quarter, which is then projected to rebound in the fourth quarter, based on our latest review of manufacturing schedules and anticipated infusion time. We are clearly on the right track with accelerating interest in our therapies and a clear path to translate patient starts into a growing consistent revenue stream. As of June 30, 2024, we had $193.4 million of cash on hand, which is inclusive of $49.2 million in Based on current operating plans, our cash runway is expected to take us into Q2 of 2025.

Tom Cleema: Lawrence. Today, we announce 27 patient starts or cell collections have been completed across our portfolio so far in 2024, including 19 fours in Taglo, four four in Virginia, and four four in Skysona. Looked at another way, we have completed 23 combined patient starts in the U.S, alone across beta-thalacymia and sickle cell disease in 2024 with a total of 43 patient starts and approval of both. And our launch momentum continues to build with more than 40 additional patients already scheduled for cell collection across our commercial portfolio to the end of the year and more being added every week.

Speaker Change: For example, we anticipate a drop in revenue in the third quarter, which is then projected to rebound in the fourth quarter, based on our latest review of manufacturing schedules and anticipated infusion timing.

Speaker Change: We are clearly on the right track with accelerating interest in our therapies and a clear path to translate patient starts into a growing consistent revenue stream over time.

Speaker Change: As of June 30, 2024, we had $193.4 million of cash on hand, which is inclusive of $49.2 million in restricted cash.

Speaker Change: Based on current operating plans, our cash runway is expected to take us into Q2 of 2025. This runway does not account for the cash minimums required by our covenants with Hercules and also excludes the receipt of any future tranches from them.

James Sterling: This runway does not account for the cash minimums required by our covenants with Hercules and also excludes the receipt of any future tranches from them. Factoring in the Hercules minimum cash, the runway takes us to Q1. This recalibration of our cash runway was primarily driven by two thefts.

Tom Cleema: Importantly, approximately half of these patients are individuals living with sickle cell disease. We are especially encouraged that because of our extensive QTC network, patients have broad access to our therapies. Today, patients have initiated or scheduled for treatment across more than 20 unique QTCs. And we clearly have tremendous room for additional growth as the 70 plus centers in our network begin to initiate the treatment process. Forza in Taglo, demand continues to be very strong and we anticipate continued growth in the second half of the year, following a recent expansion at our Launza facility, which doubles our manufacturing capacity forza in Taglo and Skysona. All of this reinforces the acceleration we projected in the second half of the year and gives us confidence and our ability to complete approximately 85 starts across our portfolio this year.

Speaker Change: Factoring in the Hercules minimum cache, the runway takes us to Q1.

Speaker Change: This recalibration of our cash runway was primarily driven by two factors.

James Sterling: The first being the updated phasing of Lufgenia starts that pushed out our revenue expectations and the associated cash collections. And second, the exclusion of additional borrowings from Hercules in our near-term runway estimate. Finally, I'm pleased that we announced this morning that we renegotiated our debt facility with Hercules to better align with current expectations and timing of Lufgenia patient starts with our ability to borrow additional, Under the terms of the revised agreement, we are eligible to receive two funding tranches totaling $50 million, subject to the achievement of patient starts and product delivery milestones, and contingent on the completion of additional finance, potential, final potential tranche of an additional $50 million at the lender's discretion remains in the ground.

Speaker Change: The first being the updated phasing of Lufgenia starts that pushed out our revenue expectations and the associated cash collections. And second, the exclusion of additional borrowings from Hercules in our near-term runway estimates.

Speaker Change: Finally, I'm pleased that we announced this morning that we renegotiated our debt facility with Hercules to better align with current expectations and timing of Lufgenia patient starts with our ability to borrow additional amounts.

Speaker Change: Under the terms of the revised agreement we are eligible to receive two funding tranches totaling 50 million dollars subject to the achievement of patient starts and product delivery milestones and contingent on the completion of additional financing.

Tom Cleema: Additionally, we've recently completed the manufacturing and release testing for the first commercial of genia patient and first infusion is being scheduled.

Speaker Change: A potential, a final potential tranche of an additional 50 million dollars at the lender's discretion remains in the agreement.

Tom Cleema: This is an incredibly exciting milestone. In this case, we completed this manufacturing and release testing on time, and we now anticipate recognizing our first lipgenia revenue in the third or fourth quarter.

James Sterling: And with that, I will turn it back to Andrew. Thank you, James. And to close us out for Q&A, I want to underscore the progress we've made in our business. We have three ongoing commercial launches, we've seen significant revenue, and we see significant unrealized value of bluebird. As you can see from the updates we share today, we have demonstrated clear patient and provider demand and the ability to successfully secure reimbursement for all three of our therapies and our ability to turn patient starts or sales collections into revenue. And we're now leveraging these strengths to our competitive advantage.

Speaker Change: And with that, I will turn it back to Andrew.

Andrew Obenshain: Thank you, James.

Andrew Obenshain: And to close us out for Q&A, I want to underscore the progress we've made in our business.

Tom Cleema: Now moving to access and reimbursement, our goal has always been timely, equitable access to our therapies. We are extremely encouraged by the speed with which both commercial and many government payers are approving pathways to patient access, particularly with lipgenia for sickle cell disease. In just seven months, more than half of sickle cell patients, ensured by Medicaid, live in a state that has affirmed coverage to a genia. This includes multiple states, including California, Pennsylvania, and Louisiana that have published coverage policies that are aligned to clinical trial criteria. 20% of patients live in a state that has already completed prior authorization approval for lipgenia for at least one patient. This means that Medicaid is moving patients through the process.

Andrew Obenshain: We have three ongoing commercial launches and we see significant unrealized value at Bluebird.

Speaker Change: As you can see from the updates we've shared today, we have demonstrated clear patient and provider demand,

Speaker Change: and Ability to Successfully Secure Reimbursement for all three of our therapies.

Speaker Change: and our ability to turn patient starts or cell collections.

Speaker Change: into revenue. And we're now leveraging these strengths to our competitive advantage.

Andrew Obenshain: We look forward to continuing to update the investor community on our progress as our business continues to scale. With that, we'd like to open it up for questions. Operator.

Speaker Change: We look forward to continuing to update the investor community on our progress as our business continues to scale. With that, we'd like to open it up for questions. Operator?

Operator: Thank you. We'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: Thank you. We'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.

Tom Cleema: I specifically want to highlight that in June, lipgenia was placed in a preferred drug list in the state of Florida. A critical step to unlocking access for one of the largest sickle cell Medicaid populations in the country. We currently have four qualified treatment centers in the state of Florida, and patients are eager for treatment. On the commercial payers side, we have multiple outcomes based agreements with national commercial payers in place for lipgenia, and published coverage policies in place for more than 200 million U.S, lives.

Speaker Change: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Operator: And your first question comes from the line of Jeff Allen of Bird Great. Please go ahead. Hi, thanks. This is Jack Allen with Bayard Dining, and thanks for taking the questions and congratulations on the progress. I just wanted to ask about these 40 patients that are scheduled to receive or initiate cell collection in the remainder of the year. Could you speak to the historical experience as it relates to the patients that have been scheduled?

Speaker Change: And your first question comes from the line of Jeff Allen of Bird.

Operator: Have you seen anyone drop out of the process at this point in the cell procurement process? I'd love to hear any kind of historical context, and then I have one follow-up as well on revenue recognition as it relates to Zintaglo and Skyscraper.

Speaker Change: Please go ahead.

Speaker Change: Hi, thanks. This is Jack Allen with Bayard Dining. Thanks for taking the questions and congratulations on the progress.

Tom Cleema: Additionally, timely access to Zintagwin Skystone has continued with zero ultimate denials for either therapy across both Medicaid and commercial payers, leaders. Moving to our QTC network, today, bluebird has activated over 70 total QTCs for Lithgenia and Zinteglow in the U.S., approximately three times the size of others in the field. Additionally, six of the centers in our network are also activated to administer SkySona for patients with CLD. As I mentioned earlier, patients are scheduled for treatment with a bluebird gene therapy at more than 20 QTCs showcasing the benefit of our vast experience network.

Jack Allen: I just wanted to ask about these 40 patients that are scheduled to receive or initiate cell collection in the remainder of the year. I guess, can you speak to the historical experience as it relates to patients that have been scheduled? Have you seen anyone drop out of the process?

Speaker Change: at this point in the, I guess, self-procurement. I'd love to hear any kind of historical context, and then I have one follow-up as well on the revenue recognition as it relates to Zintegro and SkySona.

Jack Allen: Great. Good morning, Jack. Tom, why don't you describe it? Yeah, hey, good morning, Jack.

Tom Klima: Thanks for the question. We feel very confident with the acceleration in the second half of the year when you look at both Lefgeneas and Teglow. We're, you know, extremely encouraged that more than 40 patients are scheduled for treatment going forward. Historically, you know, we haven't given guidance around how many have fallen out of the funnel, but in general, what we've seen is that it just takes time for patients to get through the process.

Speaker Change: Okay, great. Good morning, Jack. Tom, why don't you describe it?

Tom Klima: Yeah. Hey, good morning, Jack. Thanks for the question. We feel, I think, very confident with the acceleration in the second half of the year when you look at both Lefjenian and Teglo. We're extremely encouraged that more than 40 patients are scheduled for treatment going forward. Historically, we haven't given guidance around how many have fallen out of the funnel, but in general, what we've seen is that it just takes time for patients to get through the process and more often than not, it's more of a timing issue versus a getting treatment or not issue.

Tom Cleema: We continue to see key differentiators that are driving preference for Lithgenia. Most recently in market research that we conducted in Q2 across our QTC network, we found that the majority preferred Lithgenia over our competitor across a wide range of key measures, including efficacy, mechanism of action, manufacturing turnaround time, self-collection, and manufacturer of flexibility and support.

Tom Klima: And more often than not, it's more of a timing issue versus getting treatment or not to shoot Yeah, Jack, I'm adding that the that's from the time from the collection to actually infusion. In terms of the number of patients that have rescheduled a collection, that's a very small number, very, very small number, so we feel very confident in that 40. Go ahead on the revenue recap question, got it great, and then as it relates to recognizing revenues, I think James mentioned that there were 30 million patients that had cells procured or had cells infused, and when I go back and look at the revenues uh that you estimate that you've realized since the launch of these therapies, about 65 million, which when I calculate it seems like a 25% discount, I just wanted to or redate, I wanted to Go ahead, James. Hey Jack, No, it should be for both.

Jeff Allen: And Jack, I'd layer on that the that that's from the time from collection to actually infusion in terms of the number of patients that have rescheduled their collection. That's a very small number. Very, very small number. So we feel very confident in that 40.

Tom Cleema: To recap, Zinteglow launches outperforming our initial expectations and we anticipate acceleration to the remainder of the year with our newly expanded capacity. As projected, the Lithgenia launch is accelerating with access to expanding at a rapid clip and many patients scheduled to begin the treatment journey. And the SkySona launch continues to progress this plan with five to ten patients starts expected this year. As we look towards the back half of the year, we have more than 40 patients starts already scheduled, and we are on track for approximately 85 patients starts across our portfolio.

Speaker Change: Go ahead on the Revenue Recognition question.

Speaker Change: Got it. Great. And then as it relates to recognizing revenues, I think James mentioned that there were 30 million patients that had had cells procured or had cells infused. And when I go back and look at the revenues that you estimate that you've realized since the launch of these therapies, about 65 million.

Speaker Change: which when I calculated it seems like a 25% discount. I just wanted to, or rebate, I wanted to understand, I guess,

Speaker Change: Do you expect that 20 to 25% net price to take effect for both Sunteglo and Skysonar, or is that more focused on Sunteglo and Lufgenia?

James Sterling: And now I would like to turn the call over to James. Thank you, Tom, and good morning, everyone. It's great to be at Bluebird. And I look forward to getting to know many of you in the months ahead. It's an exciting time to join the company in the midst of three transformative launches. I first want to acknowledge that our restatement is ongoing, with a tremendous amount of work by our finance and accounting team. We are moving as quickly as we can to complete the restatement, which as we previously stated, is not expected to impact our cash or revenue. And we look forward to putting this chapter behind us.

Speaker Change: Go ahead, James. Yeah, hey, Jack. No, it should be for both. I think you can apply that percentage estimated range to all three products.

Jack Allen: Got it. Thank you.

James Sterling: I think you can apply that percentage estimated range to all three products. Got it. Thank you. Your next question comes from the line of Eric Joseph with JP Morgan. Please go ahead. Hi, good morning.

Speaker Change: Your next question comes from the line of Eric Joseph with J.P. Morgan. Please go ahead.

Eric Joseph: Second question. Just a point on how to think about revenue recognition for the incremental three patients that have started collecting revenue this past cycle. I guess how should we think about revenue recognition? They're appreciating that, you know, there's been a little bit of an extension with the expected timeline for the first patient. And then just on this metric of 20% of Medicaid insured sickle cell patients living in a state where prior authorization is allowed, we talked about the number of states comprised in that metric and where that might be expected to go with the additional lipogenia patient starts you anticipate in the back half.

Eric Joseph: Hi, good morning. Thanks for taking the questions.

James Sterling: In the meantime, we recognize the importance of providing you with an update on company performance, and I'm pleased today to highlight our Q2 results. In the second quarter, we reported $16.1 million of total revenue, up from $6.9 million in the prior year period. As previously guided in 2024, we continue to anticipate gross to net discounts in the range of 20 to 25 percent, with fluctuations based on products and pay or mix, as well as utilization of our outcomes-based agreements.

Eric Joseph: Just a point on how to think about revenue recognition for the incremental three patients that have started, incremental three Levgenia patients that have started collections this past cycle, I guess, how should we be thinking about...

Speaker Change: Revenue recognition, they're appreciating that, you know, there's been a little bit of an extension with the expected timeline for the first patient. And then just on this metric of 20% of Medicaid-insured sickle cell patients living in a state where prior authorization has been completed.

James Sterling: I also wanted to provide a few data points that you might find helpful for modeling. Since our first FDA approval 24 months ago, we have collected sales from 53 patients across our three products. Cell collections are the value-creating moment, and to date, every patient who has had their cells collected has either completed in infusion or remains in the process. Of the 53 patients who started cell collection, 31 have been infused, so we have already recognized revenue associated with those patients.

Speaker Change: Can you just talk about the number of states comprised in that metric and where that might be expected to go with the additional Lipgeny in patient starts you anticipate in the back half of the year?

Eric Joseph: Morning, Eric. James, go ahead and talk about the three patients' revenue record. So we would expect that... All right. To come in within six months, two-quarters is what we're thinking between self-collection and rapid recognition or infusion. Yeah, and hi, Eric. Good morning. This is Tom.

Speaker Change: Morning, Eric. James, go ahead and talk about the three patients revenue recognition.

James: So we would expect that

Speaker Change: to come in within six months, two quarters is what we're thinking between cell collection and revenue recognition or infusion.

James Sterling: I'll follow up with the Medicare question. So obviously, it's a very exciting statistic to see that, you know, 20% of patients live in a state where at least one prior authorization has already been completed. We expect that to continue to grow as we work on especially targeted states where people living with sickle cell disease live. We haven't given a breakdown of that, but it continues to be our goal to provide timely and equitable equitable access for patients. Dave, take him too close [inaudible] Yeah, and I'm just sorry if I could jump in.

James Sterling: We expect more than half of the remaining 22 patients will receive their infusions As a reminder, revenue is recognized at the time of infusion. For additional context, the process presenteglo was designed to take between 70 to 90 days from cell collection to delivery. While we have successfully completed manufacturing and release testing within this time frame, our real world commercial evidence and your experience to date is showing us that it is taking about a month longer on average for this first set of patients.

Speaker Change: Yeah, and hi Eric. Good morning. This is Tom. I'll follow up with the Medicare question. So obviously it's a very exciting statistic to see that, you know, 20% of patients live in a state where at least one priority has already been completed.

Speaker Change: We expect that to continue to grow as we work on especially targeted states where people living with sickle cell disease live. We haven't given a breakdown of that, but it continues to be our goal to provide timely and equitable access for patients.

Tom Klima: I think you said something about the first lift patient being delayed. The first lift Genia patient was actually on time, right? We within our guidance of what the 70 to 105 days that, so sorry, go ahead. Next question. Your next question comes from the line of Jason Gerberry with Bank of America. Please go ahead. Hi, good morning. This is Dina Ramadainon on behalf of Jason Gerberry.

James Sterling: We are implementing process improvements and we expect this timeline will improve over time. Once the hospital receives the drug, the patient then needs to be scheduled for infusion, which is driven by scheduling preferences and availability of both the hospital and the patient. As Tom noted, we have completed drug products manufacturing for the first commercial lift genia run, which is still to early, while still to early to predict the average world timelines from manufacturing to infusion for lift genia.

Speaker Change: Okay, thanks for taking the questions.

Speaker Change: I think you said something about the first LIFT patient being delayed. The first LIFT genia patient was actually on time, within our guidance of the 70-105 days. Sorry, go ahead, next question.

Speaker Change: Your next question comes from the line of Jason Gerberry with Bank of America. Please go ahead.

Jason Gerberry: Congratulations on the progress this quarter, and thanks so much for taking our question. We just had a question about the kind of initial feedback on the Lifgenia launch. What is driving your anticipation for an acceleration of patient starts in the second half of this year? Is there, you know, a bolus of patients waiting to get initiated, and they're just kind of bottlenecks in the process in terms of getting them started? I appreciate any color.

Speaker Change: Hi, good morning. This is Dina Ramadainan for Jason Gerberi. Congrats on the progress this quarter and thanks so much for taking our question.

James Sterling: For modeling purposes for both as integral and lift genia, we recommend assuming two quarters between initial cell collection and revenue recognition. Looking ahead, we want to manage expectations that revenue will fluctuate quarter to quarter mainly due to varying manufacturing cycle times. For example, we anticipate a drop in revenue in the third quarter, which is then projected to rebound in the fourth quarter based on our latest review of manufacturing schedules and anticipated infusion timing.

Dina Ramadainan: We just had a question on the initial feedback.

Speaker Change: on the Lifgenia launch. What is driving your anticipation for an acceleration of patient starts in the second half of this year? Is there a bolus of kind of patients waiting?

Speaker Change: to get initiated and that they're just kind of bottlenecks in the process in terms of getting them started. Appreciate any color. Thank you.

Tom Klima: Thank you. Morning, Dina. Go ahead, Tom. Hey, Dina.

James Sterling: We are clearly on the right track with accelerating interest in our therapies and a clear path to translate patients starts into a growing consistent revenue stream over time. As of June 30, 2024, we had $193.4 million of cash on hand, which is inclusive of $49.2 million in restricted cash. Based on current operating plans, our cash runways expected to take us into Q2 of 2025. This runway does not account for the cash minimums required by our confidence with Hercules and also excludes the receipt of any future tranches from them. Factoring in the Hercules minimum cash, the runway takes us to Q1.

Tom Klima: Good morning. So with Lufgenia, we've always said that we would expect the acceleration to pick up in the second half of the year and continue into next year. And, you know, for Lufgenia, there is just simply a longer path to patient starts. This includes both going through the payor approval process, but also the steps to clinical readiness within the patient community. And so it's really just a timing thing.

Speaker Change: Good morning, Dana. Go ahead, Tom.

Tom Klima: Hey Dina, good morning. So with Lufgenia we've always said that we would expect the acceleration to pick up in the second half of the year and continue into next year and you know for Lufgenia there's just simply a longer path the patient starts. This includes both going through the payer approval process but also the steps to clinical readiness.

Tom Klima: within the patient community, and so it's really just a timing thing. Additionally, we are seeing patients schedule many months in advance, so they're, you know, as they did with Zyntegel, but maybe even a little bit more so with Lipgenia, they're scheduling around life events.

Tom Klima: Additionally, we are seeing patients schedule many months in advance. So they're, you know, as they did with Integral, but maybe a little bit more so with Lufgenia, they're scheduling around life events. So it's not, you know, a slower start than expected. And it's not a demand issue. Demand is actually strong. It's simply a timing issue.

Tom Klima: So it's not, you know, a slower start than expected and it's not a demand issue. Demand is actually strong. It's simply a timing issue.

James Sterling: This recalibration of our cash runway was primarily driven by two factors. The first being the updated phasing of Virginia starts that pushed out our revenue expectations and the associated cash collections. And second, the exclusion of additional borrowings from Hercules in our near-term runway estimates.

Tom Klima: Got it. Thank you. And I just want a quick follow up. Are you?

Speaker Change: Got it. Thank you. And just a quick follow-up. Are you seeing any competitive dynamics in terms of, you know, how prescribers are making decisions on which sickle cell gene therapy to prescribe? Thank you.

Tom Klima: Are you seeing any competitive dynamics in terms of, you know, how prescribers and patients are making decisions on which sickle cell gene therapy to prescribe? Thank you. Go ahead, Tom. Yeah, it's a good question.

James Sterling: Finally, I'm pleased that we announced this morning that we renegotiated our debt facility with Hercules to better align with current expectations and timing of the Virginia patient starts with our ability to borrow additional amounts. Under the terms of revised agreement, we are eligible to receive two funding tranches totaling $50 million, subject to the achievement of patient starts and product delivery milestones, and contingents on the completion of additional financing.

Tom Klima: Go ahead, Tom.

Tom Klima: Yeah, it's a good question. I think just I'll point you to a couple of different things. Number one, you know, the size of our QTC network, we have over 70 qualified treatment centers, which

Tom Klima: I think I'll point you to a couple of different things. Number one, you know, the size of our QTC network. We have over 70 qualified treatment centers, which is about three times that of our closest competitor. When you look at the number of starts across beta thalassemia and in sickle cell disease, we reported 23 starts in the U.S. so far this year.

Tom Klima: is about three times that of our closest competitor. When you look at number of starts across beta thalassemia and in sickle cell disease, we reported 23 starts in the U.S.

Tom Klima: So we continue to believe that we maintain a strong leadership position. Beyond that, when you look at the market research that I talked about, we conducted market research across the QTC network, where we are seeing QTCs prefer Lefgenia and prefer Bluebird. So we're seeing a number of indicators that lead us to believe that we continue to hold the lead in the market.

James Sterling: A final potential tranche of an additional $50 million at the lender's discretion remains in the agreement.

Tom Klima: So far this year, so we continue to believe that we maintain a strong leadership position [inaudible]

Tom Klima: Beyond that, when you look at the market research that I talked about, we conducted market research across the QTC network.

Andrew Obenshain: And with that, I will turn it back to Andrew. Thank you, James.

Andrew Obenshain: And to close us out for Q&A, I want to underscore the progress we've made in our business. We have three ongoing commercial launches. We've seen significant fund reels and we see significant unrealized value at Bluebird. As you can see from the updates we share today, we have demonstrated clear patient and provider demand and ability to successfully secure reimbursement for all three of our therapies. And our ability to turn patient starts or sell collections into revenue. And we're now leveraging these strengths to our co-operative end.

Tom Klima: where we are seeing QGCs prefer left chenille and prefer bluebird. So we're seeing a number of indicators that lead us to believe that we continue to hold the lead in the market.

Speaker Change: Awesome. I appreciate all the color. Thank you.

Jenna Wang: Thank you. Your next question comes from Jenna Wang with Barclays. Please go ahead.

Speaker Change: [inaudible]

Speaker Change: Your next question comes from Jenna Wang with Barclays. Please go ahead.

Tom Klima: So, maybe, you know, I think the last quarter you mentioned that you were expecting 85 to 105 patient starts for all three drugs. Now you have a more definitive understanding of 85 patient starts. We still have a few more months. Like, what makes you so confident that you only will have 85?

Speaker Change: [inaudible]

Jenna Wang: So, maybe, you know, I think the last quarter you mentioned that you are expecting 85 to 105 patients starts for all three drugs Now you have more definitive understanding of 85 patients starts [inaudible]

We look forward to continuing to update the investor community on our progress as our business continues to scale.

Operator: With that, we'd like to open it up for questions. Operator? Thank you.

We'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you're called upon to ask your question in our listening via loudspeaker, on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Jenna Wang: we still have a few more months, like what makes you so confident that you only will have 85 rather than you know potentially additional patient that could get scheduled?

Speaker Change: And then my second question is regarding two quarters you said will take from initial cell collection to infusion. What is your assumption for number of cycles in average for cell collection?

Jack Allen: And your first question comes from the line of Jeff Allen of bird. Please go ahead. Hi, thanks. This is Jack Allen with bird dialing and thanks for taking the questions and congratulations on the progress. I just wanted to ask about these 40 patients that are scheduled to receive or initiate cell collection in the remainder of the year. I guess, can you speak to the historical experience as it relates to the patients that have been scheduled?

Tom Klima: rather than, you know, potentially additional patients that could get scheduled. And then my second question is regarding the two quarters you said it would take from initial cell collection to infusion. What is your assumption for the number of cycles on average for cell collection? Okay, go ahead, Tom. Yeah, good morning, Gina.

Tom Klima: You know, as we move through the year, and we have, you know, the 27 patients who've already gone through cell collection, we have more than 30 patients that are scheduled to go through cell collection between now and the end of the year, and that number continues to grow every week. But with the timeline, what we're seeing is that patients are scheduling in advance. So as we get into the second half of the year, you could expect some of those patients to start to schedule for 2025.

Tom Klima: Okay, go ahead, Tom.

Tom Klima: Hi, good morning Gina. You know, as we move through the year and we have, you know, the 27 patients who've already gone through cell collection,

Tom Klima: We have more than 30 patients that are scheduled to go through sub-collection between now and the end of the year and that number continues to grow every week [inaudible]

Speaker Change: But with the timeline, what we're seeing is that patients are scheduling in advance. So as we get into the second half of the year, you could expect some of those patients to start to schedule into 2025. And so now that we have visibility, we believe that demand is strong, but we feel that we'll come in closer to approximately 85 starts.

Tom Klima: And so now that we have visibility, we believe that your demand is strong, but we feel that we'll come in closer to approximately 85 starts. And then Gina, recollections are a normal part of the process. We do indeed have, and we have experienced recollections, which we do anticipate will continue.

Jack Allen: Have you seen anyone drop out of the process at this point in the, I guess, you know, self procurement. I'd love to hear any kind of historical context and I have one follow up as well on the revenue recognition as it relates to Tegel and Skasana. Okay, great. Good morning, Jack. Tom, why don't you describe it? Yeah, hey, good morning, Jack. Thanks for the question. We feel, I think, very confident with the acceleration in the second half of the year when you look at both Lefgenia and Tegelow, we're, you know, extremely encouraged that more than 40 patients are scheduled for treatment going forward.

Speaker Change: And then Gina, recollections are a normal part of the process. We do indeed have experienced recollections, which we do anticipate will continue. We are

Tom Klima: We are, and to date, roughly 95% of commercial patients have needed only one or two collections in the commercial setting. So it's really too early to provide an assessment of the recollection rate for Lipgenia. But in clinical trials, it's about 85% of patients that require one to two collections. Great, thank you. Your next question comes from the line of Mani Foroohar with Lear Inc. Partners, please go ahead. Hey guys, this is Ryan on from Mani. Thanks for taking our question. We just have two.

Jack Allen: Historically, you know, we haven't given guidance around how many have fallen out of the funnel, but in general, what we've seen is that it just takes time for patients to get through the process. And more often than not, it's more of a time issue versus a getting treatment or not to shoot. Yeah, and Jack had a layer on that, the, that's from the time from the collection to actually infusion in terms of the number of patients that have rescheduled a collection. That's a very small number, very, very small number. So we feel very confident in that 40.

Gina: And to date, roughly 95% of commercial patients have needed only one or two collections in the commercial setting. So it's really too early to provide an assessment of recollections rate for Lipgenia, but in clinical trials, it's about 85% of patients that require one to two collections.

Speaker Change: Great, thank you.

Speaker Change: Your next question comes from the line of Manny Forouhar with Lear Inc. Partners.

Mani Foroohar: So on the last call, you guys talked about how half of the QTC network is in the process of evaluating patients. Can you kind of talk about if you're seeing a broadening across the network or, you know, more heavily concentrated uptake or progress within, you know, a select few networks or QTCs? And then I have a second one, but go ahead. Yeah, I give him morning riots, so we're pleased with not only the size of our Qualified Treatment Center network but also that more than 20 patients, you know; 20 QTCs have started the process with the patient.

Speaker Change: Please go ahead.

Ryan Anfermani: Hey guys, this is Ryan Anfermani. Thanks for taking our question. We just have two. So on the last call, you guys talked about how half of the QTC network is in the process of evaluating patients. Can you kind of talk about if you're seeing a broadening across the network or more heavily concentrated uptake or progress within a select few networks or QTCs?

Go ahead on the revenue recognition question. Got it. Great. And then I wasn't really so recognizing revenues, I think James mentioned that there were 30 million patients that had had cells procured or had cells infused. And when I go back and look at the revenues that you estimate that you've realized since the launch is easier, he's about 65 million, which when I calculate it seems like a 25% discount. I just wanted to, or rebate.

Speaker Change: And then I have a second one, but go ahead.

Speaker Change: Go ahead, Tom. Yeah, hi, good morning, Ryan. So we're pleased with not only the size of our Qualified Treatment Center network, but also greater than 20 patients, you know, 20 QTCs have started.

I wanted to understand, I guess. Do you expect that 20 to 25% net price to take effect for both in teglow and Scott's owner or is that more focused on some teglow in the Virginia? Go ahead, James. Hey, Jack. No, it should be for both. I think you can apply that percentage estimated range to all three products. Got it. Thank you.

Mani Foroohar: We believe that a very broad subset of the QTCs are evaluating patients. But keep in mind that as they come on board, and they do the work to become a qualified treatment center, they don't take that lightly. And they really wouldn't commit to being a qualified treatment center unless they had patients that they ultimately wanted to treat.

Tom Klima: You know the process with the patient. We believe that a very broad subset of the QTCs are evaluating patients.

Tom Klima: Keep in mind that as they come on board and they do the work to become a qualified treatment center, they don't take that lightly and they really wouldn't commit to being a qualified treatment center unless they had patients that they ultimately wanted to screen. So we're pleased with the growth that we're seeing. I think there's a lot of upside with, you know, is...

Tom Klima: So we're pleased with the growth that we're seeing. I think there's a lot of upside with, you know, the 70 QTCs that continue to go through the process. And we're excited about the acceleration we're seeing. That's helpful. And then on the one month delay that you guys are seeing from cell collection to delivery for Lifgenia, can you just provide any color on what some of the reasons would be for that

Eric Joseph: Your next question comes from the line of Eric Joseph with JP Morgan. Please go ahead. Hi, good morning. I'm taking the questions. Just a point on how to think about revenue recognition for the incremental three patients that have started. Incremental three lipgenia patients that have started collections this past cycle, I guess, how should we think about? You've revenue recognition there, appreciating that, you know, there's been a little bit of extension with the expected timeline for the first patient.

Tom Klima: These 70 QTCs continue to go through the process, and we're excited about the acceleration we're seeing.

Speaker Change: That's helpful. And then on the one month delay that you guys are seeing from cell collection to delivery for Lifgenia, can you just provide any color on, you know, what some of the reasons would be for that? Thanks.

Tom Klima: Go ahead, Tom. Yeah, so we haven't given a breakdown, you know, as part of gene therapy recollections, as Andrew talked about a second ago, as part of the process. But we are looking at different ways to improve our process and get back closer to the original guidance.

Speaker Change: Well done.

Speaker Change: Yeah, so we haven't given a breakdown, you know, as part of, you know, gene therapy recollections as Andrew talked about a second ago as part of the process.

Speaker Change: But we are looking at different ways to improve our process and get back closer to the original guidance. We're still incredibly encouraged that the speed at which we can turn things around in the manufacturing process.

Eric Joseph: And then just on this metric of 20% of Medicaid insured sickle cell patients living in a state where prior authorization has been completed. You just talked about the number of states comprised in that metric and where that might be expected to go with the additional lipgenia patient starts your you anticipate in the back of the year. Thank you.

Speaker Change: experience that we're getting with our QTCs obviously working very closely with our QTCs and becoming strong partners with them.

Christopher Krawtschuk: Krawtschuk, Christopher Krawtschuk.

Tom Klima: We're still incredibly encouraged by the speed at which we can turn things around in the manufacturing process, and the experience that we're getting with our QTCs, obviously working very closely with our QTCs and becoming strong partners with them. Great, thanks. Your next question comes from the line of Jeff Hung of Morgan Stanley. Please go ahead. Thanks for taking my questions. For Zantaglo, the rate of new patient starts came down slightly in May since May, you know. Were there any one-time headwinds that you saw in the quarter? Is that mainly due to timing?

Speaker Change: Great, thanks.

Morning, Eric James go ahead and talk about the three patients revenue recognition. So we would expect that to come in within six months to quarters is what we're thinking between cell collection and revenue recognition or infusion. Yeah, and hi, Eric. Good morning. This is Tom. I'll follow up with the Medicare question. So obviously it's a very exciting statistic to see that, you know, 20% of patients living in a state where at least one prior to has already been completed.

Speaker Change: Your next question comes from the line of Jeff Hong of Morgan Stanley. Please go ahead.

Jeff Hong: Thanks for taking my questions. For Zantaglo, the rate of new patient starts came down slightly in May, since May. You know, were there any one-time headwinds that you saw in the quarter? Is that mainly due to timing? And then is your confidence that it should increase over the remainder of the year? Is that mainly from the patients that are already scheduled? And then I have a follow-up.

Jeff Hung: And then, is your confidence that it should increase over the remainder of the year? Is that mainly from the patients that are already scheduled? And then, I have a follow-up. Yes, so your first question was that the dip you saw was just a timing issue.

Speaker Change: Yes, so for your first question that the dip you saw was just a timing issue.

Tom Klima: So you called that correctly. Our belief in the acceleration in the second half of the year is not only the demand we're seeing but also the patients that are already scheduled going forward. And then also, when you look at Zantaglo specifically, we did double our manufacturing capacity at Lanza.

Speaker Change: So you...

Speaker Change: called that correctly. Our belief in the acceleration in the second half of the year is not only the demand we're seeing, but also the patients that are already scheduled going forward. And then also when you look at Zintaglo specifically, we did double our manufacturing capacity at Lanza. And so, you know, that will allow more patients that are already waiting to be treated in the second half of the year and going forward. So we have confidence obviously with, you know, kind of what we're seeing going forward.

We expect that to continue to grow as we work on, especially targeted states where people living with sickle cell disease live. We have a give it a breakdown of that, but it continues to be our goal to provide timely and equitable access for patients. Okay. Thank you for taking the questions. Yeah, and I just sorry if I just could jump in. I think you said something about the first lip patient being delayed. The first lipgenia patient was actually on time. Right. We within our guidance of what the 70 to 105 days. So sorry, go ahead and ask questions.

Tom Klima: And so, you know, that that will allow more patients that are already waiting to be treated in the second half of the year and going forward. So we have confidence, obviously, with, you know, kind of what we're seeing going forward. Great. And then you reported restricted cash of around 49 million, but last quarter was around 52. I was just wondering if you could just talk about the flight difference there.

Speaker Change: Okay, great. And then you report a restricted cash of around $49 million, but last quarter it was around $52 million. Just wondering if you could just talk about the slight difference there. Thanks so much.

James Sterling: Thanks so much. Yeah, we had a small release of restricted cash this quarter related to some research. Go ahead, James. Yeah, and a change in one of the banking relationships, a lot of that release of a bit of that restricted cash.

Dina Ramadane: Your next question comes from the line of Jason Gerberi with Bank of America. Please go ahead. Hi, good morning. This is Dina, Robert, and on for Jason, Gerberi. Congrats on the progress this quarter and thanks so much for taking our question. We just had a question on the kind of the initial feedback on the lipgenia launch. What is driving your anticipation for an acceleration of patient starts in the second half of this year.

Speaker Change: Yeah, we had a small release of restricted cash this quarter related to some research.

Speaker Change: I believe. Go ahead, James. Yeah, and a change in one of the banking relationships to allow that release of a bit of that restricted cash.

Dina Ramadane: Is there, you know, a bolus of kind of patients waiting to get initiated and that they're just kind of bottlenecks in the process in terms of getting them started. Appreciate any color. Thank you. Morning, Dina. Go ahead Tom. Hey, Dina. Good morning.

James Sterling: Great, thank you. Your next question comes from the line of Yanan Zhu with Wells Fargo. Please go ahead. Hi, thanks for taking our question. This is Kwan-Aung Fo-Yan.

Speaker Change: Great, thank you.

Speaker Change: Your next question comes from the line of Yanan Zhu with Wells Fargo. Please go ahead.

Yanan Zhu: I have a question regarding the QDC. I wonder if there are any centers that were clinical sites but decided not to include them or become a QTC. Yeah, hi, good morning. It's a good question.

Speaker Change: Hi, thanks for taking our question. This is Quan Ang for Yanan. I have a question regarding the QTC. I wonder if there are any centers that were clinical sites but decided not to become a QTC. Thank you.

Tom Klima: So all of our clinical trial sites have gone on to become commercial QTCs. Keep in mind that in some cases, they will continue to do clinical trials. So they, you know, go on to become commercial QTCs, but they continue to do clinical trials with other gene therapies as well. So they have all converted to commercial QTCs.

Speaker Change: Yeah, hi, good morning. It's a good question. So all of our clinical trial sites have gone on to be commercial QTCs.

So with lipgenia, we've always said that we would expect the acceleration to pick up in the second half of the year and continue in the next year. And, you know, for lipgenia, there's just simply a longer path. The patient starts. This includes both going through the payer approval process, but also the steps to clinical readiness within the patient community. And so it's really just a timing thing. Additionally, we are seeing patients schedule many months in advance.

Speaker Change: keep in mind that in some cases they will continue to do clinical trials. So they, you know, go on to become commercial QTCs, but they continue to do clinical trials with other gene therapies as well. So they have all converted to commercial QTCs.

So there, you know, as they did was integral, but maybe you're a little bit more so with lipgenia, they're scheduling around life events. So it's not, you know, a slower start than expected and it's not a demand issue demand is actually strong. It's simply a timing issue. Got it. Thank you. And I just a quick follow up.

Tom Klima: Got it. Thank you for that. And one quick question on insurance. So you mentioned that there were no denials on Zyntagalo and Skysona. But how about Lipgenia?

Speaker Change: Got it. Thank you for that. And one quick question on insurance. So you mentioned that there was no ultimate denials on Zintagelo and SkySona. How about Lipgenia? Any pushback or denial? Thank you.

Tom Klima: Witchback or Denial? Thanks. Thank you. You know, it's probably too early to tell. What we're seeing now, though, is that both commercial insurers, as well as government insurers, are encouraging therapy for the patients that are going through the process. You know, so again, it's too early to say that there haven't been any. I mean, we will kind of continue to monitor that and provide updates as we see more patients. Yeah, thank you. So for all the, Your next question comes from the line of Salveen Richter with Goldman Sachs; please go ahead. Hi, this is Srinath Rao for Salveen.

Speaker Change: You know, it's probably too early to tell. What we're seeing now, though, is we're encouraged by, you know, both commercial insurers as well as government insurers, you know, approving

Dina Ramadane: Are you, are you seeing any competitive dynamics in terms of, you know, how prescribes and prescribes are making decisions on which sickle cell gene therapy to prescribe? Thank you. Go ahead, Tom. Yeah, it's a good question. I think just I'll point you to a couple of different things. Number one, you know, the size of our QTC network. We have over 70 qualified treatment centers, which is about three times that of our closest competitor.

Speaker Change: therapy for the patients that are going through the process. You know, so again, it's too early to say that there haven't been any, I mean it's, we will kind of continue to monitor that and provide updates as we see more patients.

Speaker Change: Yeah, thank you for all the callers.

Speaker Change: Your next question comes from the line of Salveen Richter with Goldman Sachs. Please go ahead.

Salveen Richter: Thank you for taking the time. Regarding your debt financing agreement with Hercules, could you provide any additional color on the renegotiated terms and what would trigger the second and third tranches? Go ahead, James. So, yeah, Hercules has been a great partner through this and allowed adjustments to give us a chance to access those next two tranches, given the update to lift any phase, so the second tranche now becomes available. First, if we secure at least 75 million and gross proceeds from additional financing by December 20th, Annn, at least 50 Lufgenia starts by March 31 or 70 Lufgenia starts by June 30. So that would release the tranche to 25 and then Trunch 3 now becomes available.

Dina Ramadane: When you look at number of starts across beta thalassemia and in sickle cell disease, we reported 23 starts in the US so far this year. So we continue to believe that we maintain a strong leadership position. Beyond that, when you look at the market research that I talked about, we conducted market research across the QTC network where we are seeing QTC's preferred left genia and prefer preferred bluebird. So we're seeing a number of indicators that lead us to believe that we continue to hold the lead in the market. Awesome. I appreciate all the color. Thank you.

Srinath Rao: Hi, this is Srinath Rao for Salveen. Thank you for taking our question. Regarding your debt financing agreement with Hercules, could you provide any additional color on the renegotiated terms and what would trigger the second two tranches in this agreement?

James: Go ahead, James.

James: So, yeah, Hercules has been a great partner through this and allowing adjustments to give us a chance to access those next two tranches, given the update to lift any of phasing.

James: so

Your next question comes from Jenna Wang with Barclays. Please go ahead. So maybe, you know, I think the last quarter you mentioned that you are expecting 85 to 105 patient starts for all three drugs. Now you have more definitive understanding on 85 patient starts. We still have a few more months.

James: The second tranche now becomes available.

Speaker Change: First, if we secure at least $75 million in gross proceeds from additional financing by December 20th of this year.

Speaker Change: and at least 50 Lithgenia starts by March 31st, or 70 Lithgenia starts by June 30th, so that would release Tranche 2, 25 million.

James Sterling: If we receive at least $100 million in gross proceeds from additional financing by December 20th or at least $125 million by June 30th of next year, and we complete at least 70 drug product deliveries within a six-month period no later than December 31st of next year. Your next question comes from Luca Issi with RBC Capital Markets. Please go ahead. Oh, great. Thanks so much for taking my question and congratulations on the progress.

Speaker Change: And then Trunch 3 now becomes available.

Gina: Like what makes you so confident that you only will have 85 rather than, you know, potentially additional patient that could get scheduled.

Speaker Change: If we receive at least $100 million in gross proceeds from additional financing by December 20th, or at least $125 million by June 30th of next year.

And then my second question is regarding two quarters you said will take from initial cell collection to infusion. What is your assumption for number of cycles in average for cell collection?

Speaker Change: and we complete at least 70 drug product deliveries within a six-month period no later than December 31st of next year.

Speaker Change: [inaudible]

Gina: Okay, go ahead, Tom. Hi, good morning, Gina. You know, as we move through the year and we have, you know, the 27 patients who've already gone through cell collection. We have more than 30 patients that are scheduled to go through cell collection between now and the end of the year and that number continues to grow every week. But with the timeline, what we're seeing is that patients are scheduling in advance. So as we get into the second half of the year, you could expect some of those patients to start to schedule into 2025.

Speaker Change: Thank you, that was really helpful.

Speaker Change: Your next question comes from Luca Issi with RBC Capital Markets. Please go ahead.

James Sterling: I have two quick ones, maybe circling back on the prior questions on sickle cell disease. How should we think about the relative market share between you and Vertex now? Most of you guys have been on the market, obviously, for eight months. I think you have four patients started so far versus they actually have 20 self-collected. We don't have the breakdown between beta-caliber sickle cell disease for them, but I'm assuming that most of them are sickle cell disease.

Luca Issi: Oh great, thanks so much for taking my question and congrats on the progress. I have two quick ones, maybe circling back on the prior questions on sickle cell disease. How should we think about the relative market share between you and Vertex now?

Speaker Change: Most of you guys have been on the market obviously for eight months. I think you have four patients start so far versus they actually have 20 self-collected. We don't have the breakdown between beta-caliber sickle cell disease for them, but I'm assuming that most of them are sickle cell disease.

Gina: And so now that we have visibility, we believe that your demand is strong, but we feel that we'll come in closer to approximately 85 starts. And then Gina, I'll take the recollections are a normal part of the process. We do indeed have experience recollections, which we do anticipate will continue. We are, and today roughly 95% of commercial patients have needed only one or two collections in the commercial setting. So it's really to early provide an assessment of recollections ready for lipgenia, but in clinical trials, we try to 85% of patients that require one to two collections.

Luca Issi: So maybe if you go by that metric, you suggest that they could be ahead here. But again, we'd love to hear your pushback. And then maybe a quick one on the PNL. We obviously have not seen COGS for quite some time, but we'd love to hear kind of at a high level what we should think about where gross margins are today and where you think they can go as the product scales. Thanks so much.

Great.

Thank you.

Speaker Change: So maybe if you go by that metric, you suggest that they could be ahead here, but again, we'd love to hear your pushback.

Speaker Change: And then maybe a quick one on the P&L. We obviously have not seen COGS for quite some time, but we'd love to hear kind of at high level, how should we think about where gross margins are today and where you think they can go as the product scales. Thanks so much.

Luca Issi: Go ahead, Tom. Hey, Luca. Good morning. It's Tom. I actually see it much differently than that. Keep in mind, you know, what we reported was 23 starts across beta thalassemia and sickle cell disease and 43 starts since they were both approved, just in the U.S. alone. I have not seen a breakdown from what they reported, but it was 20 global starts from what I remember.

Speaker Change: Go ahead, Tom. Hey, hey Luca. Good morning. It's Tom. I actually see it much differently than that. Keep in mind

Your next question comes from the line of many for who are with leering partners.

Speaker Change: You know, what we reported was 23 starts across beta thalassemia and sickle cell disease.

Ryan Mcelroy: Please go ahead. Hey guys, this is Ryan on for money. Thanks for taking our question. We just have two. So on the last call, you guys talked about how half of the QTC network is in the process of evaluating patients. Can you kind of talk about if you're seeing a broadening across the network or more heavily concentrated uptake or progress within a select few networks or QTCs. And then I have a second one, but go ahead.

Speaker Change: and 43 starts since they were both approved.

Tom Klima: So if you look at both the starts that we're reporting and you look at the size of our QTC network, we continue to believe that we are securing a leadership position in the market. Go ahead, James. Yep. So since we haven't completed the restatement, and we haven't released the 10k or the 10Qs yet, I can't comment on specific gross margin right now, Eric Cogs. But, as we guided previously, we continued to anticipate a gross margin of at least 70% within the next five years.

Speaker Change: just in the U.S. alone. I have not seen a breakdown from what they reported, but it was 20 global starts from what I remember. So if you look at both the starts that we're reporting and you look at the size of our QTC network,

James Sterling: And I'm happy to walk through the updates to Cogs once the Restatement is done. Thanks so much. Your next question comes from the line between Sammy Corwin and William Blair.

Speaker Change: we continue to believe that we are securing the lead position in the market.

James: Go ahead, James.

James: So since we haven't completed the restatement, and so we haven't released the 10-K or the 10-Qs yet, I can't comment on specific gross margins.

Yeah, hi, good morning, Ryan. So we're pleased with not only the size of our Qualified Treatment Center network, but also greater than 20 patients, you know, 20 QTCs have started, you know, the process with the patient. We believe that a very broad subset of the QTCs are evaluating patients. Keep in mind that as they come on board and they do the work to become a Qualified Treatment Center, they don't take that lightly and they really wouldn't commit to being in Qualified Treatment Center.

Unless they had patients that they ultimately wanted to treat. So we're pleased with the growth that we're seeing. If there's a lot of upside with, you know, these 70 QTCs continue to go through the process and we're excited about the acceleration we're seeing that's helpful.

James: right now, or COGS. But as we guided previously, we continue to anticipate a gross margin of at least 70% within the next five years. And I'm happy to walk through the updates to COGS once the restatement is done and we complete the filings.

Speaker Change: Got it. Thanks so much. Super helpful.

Speaker Change: Your next question comes from the line of Sammy Corwin with William Blair. Please go ahead.

Sammy Corwin: Please go ahead. Hi there, thanks for taking my question. I was wondering if you could discuss the negative opinion by HHF on the fertility treatment and if that's had an impact on Lysgenia's start. And then also, I would love your high-level thoughts on obtaining additional sources of funding, since that seems to be largely tied to obtaining those next loan tranches.

Sammy Corwin: Hi there, thanks for taking my question. I was wondering if you could discuss the negative opinion by HHS on the fertility treatment and if that's had an impact on

Ryan Mcelroy: And then on the one month delay that you guys are seeing from cell collection to delivery for left genia, can you just provide any color on, you know, what some of the reasons would be for that. Thanks. Yeah, so we haven't given a breakdown, you know, as part of, you know, gene therapy, recollections as Andrew talked about a second ago as part of the process. But we are looking at different ways to improve our process and get back closer to the original guidance.

Sammy Corwin: And then also, I would love your high level thoughts on obtaining additional sources of funding, since that seems to be largely tied to obtaining those next loan tranches. Thank you.

Tom Klima: Thank you. Morning, Sammy. Go ahead, Tom. Yeah, good morning, Sammy.

Tom Klima: Obviously, fertility preservation is a consideration for patients who would be considering gene therapy. As a reminder, Bluebird offers fertility preservation for eligible commercially insured patients through our patient support program, which is called my Bluebird support. And as you're referencing, on July 22, the OIG released an unfavorable opinion on our request to provide fertility preservation services for patients that are insured through Medicaid and other federal health care programs. We continue to focus on equitable access for patients.

Sammy Corwin: Good morning, Tammy. Go ahead, Tom.

Tom Klima: Yeah, good morning, Sammy. Obviously, fertility preservation is a consideration for patients who would be considering gene therapy.

Ryan Mcelroy: We're still incredibly encouraged that the speed at which we can turn things around in the manufacturing process. Experience that we're getting with our QTCs obviously working very closely with our QTCs and becoming strong partners with them.

Speaker Change: As a reminder, Bluebird offers fertility preservation for eligible commercially insured patients through our patient support.

Great. Thanks.

Speaker Change: which is called My Bluebird Support. And as you're referencing, on July 22nd the OIG released an unfavorable opinion on our request to provide fertility preservation services for patients.

Speaker Change: that are insured through Medicaid and other federal health care programs. We continue to focus on equitable access for patients. We are, as Bluebird, engaged with a diverse group of stakeholders, including patients and advocates.

Jeff Hung: Your next question comes from the line of Jeff Hong of Morgan Stanley. Please go ahead. Thanks for taking my questions. For Zinteglo, the rate of new patient starts came down slightly in May since May. You know, were there any one time headings that you saw on the quarter, is that mainly due to timing. And then is your confidence that you should increase over the remainder of the years, that mainly from the patients that are already scheduled and then I'm going to follow up.

Tom Klima: We are engaged as Bluebird with a diverse group of stakeholders, including patients and advocates, to encourage change. And in the meantime, I would say that both Bluebird and our qualified treatment centers are highly experienced with helping patients and their families navigate the coverage process and are quite experienced in navigating fertility preservation. So, we have a wide range of options available to us in terms of financing aid, which could include other sources of debt, equity, royalty, and other alternatives.

Speaker Change: to encourage change. And in the meantime, I would say that both bluebird and our qualified treatment centers are highly experienced with helping patients and their families navigate the coverage process and are quite experienced in navigating fertility preservation.

Jeff Hung: Yes, so you're for your first question that the dip you saw was just a timing issue. So you called that correctly. Our belief in the acceleration the second after the years, not only the man we're seeing, but also the patients that are already scheduled going forward. And then also when you look at Zinteglo specifically, we did double our manufacturing capacity at Lanza. And so, you know, that that will allow more patients that are already waiting to be treated in the second half.

Speaker Change: Krawtschuk.

Speaker Change: Go ahead and find your answer [inaudible]

Speaker Change: so

Speaker Change: We have a wide range of options available to us on the financing. It could include other sources of debt, equity, royalty, other alternatives. So it's too early to comment on any specifics as we contemplate structure.

James Sterling: So it's too early to comment on any specifics as we contemplate structure, satisfy the Hercules ask which we consider quite appropriate. Okay, thank you. There are no more questions. I will now turn the conference back over to Andrew Obenshain for closing remarks. Thank you. And great. Thanks, everyone, for joining the call this morning and for your questions. Our team is available for follow-up calls today. Please reach out to Courtney if you would like to connect. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect, music playing music playing music playing music playing

Speaker Change: to satisfy the Hercules ask which we which we consider quite appropriate.

Jeff Hung: That's the year and going forward. So we have confidence obviously with you know, kind of what we're seeing going forward. Okay. Great. And then you reported research to cash of around 49 million. The last quarter is around 52. Just wondering if you could just talk about the slight difference there. Thanks so much. Yeah, we had a small release of restrict to cash this quarter related to some research. Right, that way. Go ahead. Jimt. Yeah, and a change in one of the banking relationships a lot that a release of a bit of that restricted cash. Great. Thank you.

Speaker Change: Okay, thank you.

Speaker Change: There are no more questions. I will now turn the conference back over to Andrew Obenshain for closing remarks.

Andrew Obenshain: Thank you and great thanks everyone for joining the call this morning and for your questions. Our team is available for follow-up calls today. Please reach out to Courtney if you would like to connect. Thank you.

Speaker Change: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Your next question comes from the line of Yan on June with Wells Fargo. Please go ahead. Hi. Thanks for taking our question. This is Juan Ang-Foyan. I have a question regarding the QDC.

Yanan Zhu: I wonder if there are any centers that were clinical sites, but decided not to become a QDC. Thank you. Yeah, I good morning. It's a good question. So all of our clinical trials, I said gone on to be a commercial QTCs keep in mind that in some cases they will continue to do clinical trials. So they, you know, go on to become commercial QTCs, but they continue to do clinical trials with other gene therapies as well. So they have all converted to commercial QTCs. Got it. Thank you for that.

Speaker Change: [inaudible]

And one quick question. So you mentioned that there was no ultimate denial of being tackled and sky so not how about life journey any pushback or denial. Thank you. It's probably too early to tell what we're seeing now though is we're encouraged by, you know, both commercial insurers as well as government insurers, you know, approving therapy for the patients that are going through the process. Yes, you know, so again, it's really too early to say that there haven't been any, I mean, we will kind of continue to monitor that and provide updates as we see more patients.

Yanan Zhu: Thank you so for all the Congress.

Your next question comes from the line of Salvin Richter with Goldman Sachs. Please go ahead.

Salveen Richter: Hi, this is your not drawn for Salvin. Thank you for taking our question. Regarding your debt financing agreement with her curious, could you provide any additional color on the renegotiated terms and what would trigger the second two tranches in this agreement? Go ahead. So yeah, hercules has been a great partner through this and allowing adjustments to give us a chance to access those next two tranches given the update to the lieutenant phasing.

Salveen Richter: So the second tranche now becomes available. First, if we secure at least 75 million and gross proceeds from additional financing by December 20th of this year and at least 50 lift genius starts by March 31st or 70 lift genius starts by June 30th. So that that would release tranche to 25 million. And then tranche three now becomes available. If we receive at least 100 million in gross proceeds from additional financing by December 20th or at least 125 million by June 30th of next year. And we complete at least 70 drug product deliveries within a six month period no later than December 31st of next year. Thank you.

It's really helpful.

Luca Issi: Your next question comes from Luca EC with RBC capital markets. Please go ahead. Great.

Thanks so much for taking my question and congrats on the progress. I have to quick one maybe circling back on the prior questions and sickle cell disease. How should we think about the relative market share between you and vertex now. Most of you guys have been on the market obviously for eight months. I think you have four patients start so far versus they actually have 20 self collected. We don't have the breakdown between the thousand sickle cell disease for them, but I'm assuming that most of them are sickle cell disease. So maybe if you go by that metric you suggest that they could be ahead here, but again, we love to hear you push back.

Luca Issi: And then maybe quick one on the PNL. We obviously have not seen COGS for quite some time, but we love to hear kind of at high level. How should we think about where gross margins are today and where you think they can go as the product scales. Go ahead Tom. Hey Luca, good morning, it's Tom. I actually see it much differently than that. Keep in mind, you know, what we reported was 23 starts across beta thalacemia and sickle cell disease and 43 starts since they were both approved just in the US alone.

Luca Issi: I have not seen a breakdown from what they reported, but it was 20 global starts from what I remember. So if you look at both the starts that were reporting and you look at the size of our QTC network, we continue to believe that we are securing the lead position in the market. Go ahead James. So since we haven't completed the restatement and so we haven't released the 10k or the 10k use yet.

Luca Issi: I can't comment on specific gross margin right now or cogs, but as we guided previously, we continue to anticipate a gross margin of at least 70% within the next five years. And I'm happy to walk through the updates to cogs once the restatement is done and we complete the violence. Got it. Thanks so much. Super helpful.

Your next question comes from the line of Sammy Corwin with William Blair. Please go ahead. Hi there. Thanks for taking my question. I was wondering if you could just discuss the negative opinion by HHS on the fertility treatment and if that's had an impact on. This journey starts and then also I would love your high little thoughts on a tiny additional source of the funding since that seems to be a largely tied to obtaining those next loan frotches. Thank you. Morning, Sammy. Go ahead, Tom. Yeah, good morning, Sammy.

Samantha Corwin: Obviously fertility preservation is a consideration for patients who would be considering gene therapy. As a reminder, Bloomberg offers fertility preservation for eligible commercially insured patients through our patient support, which is called my Bloomberg support. And as you're referencing on July 22nd, the OIG released an unfavorable opinion on our request to provide fertility preservation services for patients that are insured through Medicaid and other federal health care programs. We continue to focus on equitable access for patients.

Samantha Corwin: We are as Bloomberg engaged with the diverse group of stakeholders, including patients and advocates to encourage change. And in the meantime, I would say that both Bloomberg and our qualified treatment centers are highly experienced with helping patients and their families navigate the coverage process and our fight experience and navigating fertility preservation. So we have a wide range of options available to us on the financing a bit include other sources of debt, equity, royalty, other alternatives. So it too early to comment on any any specifics as we as we contemplate structure to satisfy the Hercules, ask which we, which we consider quite appropriate. Dr. Okay, thank you. There are no more questions.

I will now turn the conference back over to Andrew Opensheen for closing remarks. Thank you and great. Thanks everyone for joining the call this morning and for your questions. Our team is available for follow calls today. Please reach out to Courtney if you would like to connect. Thank you.

Andrew Obenshain: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Thank you very much.

I'll see you next time.