(Bloomberg) -- Bluebird Bio Inc. shares fell the most in nine months after the struggling biotech said it will to fall short of its goal to seek regulatory approval for its sickle cell gene therapy by the end of March.

The company may be able to file the application in a few weeks, depending on when the US Food and Drug Administration provides feedback about Bluebird’s drug manufacturing process, Chief Executive Officer Andrew Obenshain said in an interview. He still expects to launch the drug, called lovo-cel, next year. 

Bluebird shares fell as much as 26% at the US market open, their biggest intraday loss since Aug. 9. 

Bluebird’s application for lovo-cel is written and ready to file, and the additional back-and-forth with the FDA could lead to a smoother review, according to Obenshain. However, Bluebird has little room to fail. 

The company nearly ran out of cash in 2022 as a series of safety scares related to lovo-cel delayed efforts to seek approval for the drug by more than a year. Meanwhile, rival duo Vertex Pharmaceuticals Inc. and Crispr Therapeutics AG have said they expect to finish an application for a competing drug to treat sickle cell disease by the end of the month. 

Bluebird had two other rare-disease treatments approved last year — Zynteglo for a blood disorder and Skysona for a brain disease. Seven patients are in the process of undergoing the two therapies, Bluebird said. Still, the ailing biotech is eyeing lovo-cel as a key source of revenue. 

Read More: Bluebird Sees Road to Revival After Gene-Therapy Misfires

Bluebird’s communications with the FDA relate to lovo-cel’s manufacturing process, which it altered after finishing a study on the treatment’s efficacy and safety. The company provided information to the FDA in December about the new production method and received questions from the regulator in February. It responded earlier this month and is waiting to hear back, according to Obenshain.

“As soon as we get that, we’ll move quickly to expedite,” the application, Obenshain said, “pending the resolution of these FDA comparability questions.”

An inherited condition caused by a gene mutation, sickle cell disease affects about 100,000 Americans, with Black people among those at highest risk. The faulty gene causes blood cells to become misshapen into a characteristic crescent or sickle shape that can slow or halt blood flow, damaging tissues and leaving patients in extreme pain. 

Bluebird’s lovo-cel introduces a correct copy of the flawed gene into patients’ cells. The treatment resolved pain crises for all 25 subjects evaluated in a clinical trial, yet still faces questions over potential risks.

Cancer Diagnosis Disputed

Bluebird said questions from the FDA aren’t related to efficacy or safety. 

Another person who received lovo-cel in a sickle cell study was diagnosed with a type of cancer called myelodysplastic syndrome, Bluebird said in a regulatory filing Wednesday. The study’s independent data monitoring committee reviewed the case and disagreed with the diagnosis, determining it didn’t meet their criteria for the condition, Bluebird said. The company said there’s no evidence the vehicle that delivers the drug was involved.

Before this latest disclosure, three people who took the drug in studies developed illnesses that looked like cancer, creating concern about the treatment’s safety. Bluebird later determined only two of the three cases were actually cancerous and weren’t related to the vector. One concern around gene therapies is the vector carrying genetic material could go to the wrong place and cause cells to grow uncontrollably. Bluebird lists the possibility as a risk factor in its 10-K filing.

For the fourth quarter, Bluebird reported earnings of 38 cents a share, according to a statement. The company plans to start recording sales from its two newly approved therapies in the first quarter of this year. US insurers are covering Bluebird’s drugs, which cost around $3 million and include a money-back guarantee, the company said in the statement. It’s taking about two weeks for patients to receive insurance coverage for Zynteglo, and there haven’t been any ultimate denials, Bluebird said. 

(Updates shares in first and third paragraphs)

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