Rumors that Pfizer (PFE) is in “advanced discussions” to acquire Global blood therapy (GBT) worth about $5 billion sent shares of GBT down for the second day in a row on Friday.
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Global Blood Therapeutics makes a sickle cell disease treatment called Oxbryta for patients 4 years and older. According to the Wall Street Journal, Pfizer is ready to end the deal for Global Blood in the next few days. However, there are other suitors in the mix and the deal is not set in stone. Pfizer representatives did not immediately return a request for comment. A spokesman for GBT declined to comment.
GBT shares have soared this week about the rumours, first reported Wednesday by Bloomberg. Shares rose more than 41% on Thursday, breaking out of a long consolidation with a buy point at 40.79, according to MarketSmith.com.
In trading today, shares rose another 33% to 63.84. Pfizer shares fell 1.2% to 49.27.
GBT Stock: Rare Disease Efforts
Global Blood Therapeutics was founded in 2011. It sells Oxbryta for the treatment of sickle cell disease and has two other promising treatments in early-stage human trials. These latter efforts are also in sickle cell disease and vaso-occlusive crises, a complication of sickle cell disease.
During the June quarter, GBT stock analysts expect Oxbryta to have generated more than $64 million in sales. Global Blood Therapeutics is on deck to report its second quarter earnings on Monday.
Buying Global Blood would bolster Pfizer’s efforts in rare diseases. Today, this portfolio mainly includes Vyndaqel. Vyndaqel treats a disorder in which abnormal proteins build up in the heart. In the second quarter, Vyndaqel earned $552 million in sales. The entire rare disease business generated $909 million in sales, a growth of just 2%.
Vyndaqel is also likely to face competition in the near future. Alnylam Pharmaceuticals (ACHIEVE IT) i Intellia Therapeutics (NORTH) are among those seeking to treat the same disease. So there is pressure to add this portfolio. Rare diseases accounted for just 3% of Pfizer’s total revenue in the June quarter.
Pfizer has money to burn
Analysts have been looking for Pfizer to become more acquisitive. Their covid vaccine and antiviral pill have been big money makers. Pfizer expects $54 billion in revenue this year between the two products alone, the proceeds of which it could invest in acquisitions such as GBT stock.
This year, Pfizer agreed to buy the migraine drug assets Biohaven Pharmaceuticals (BHVN), invested $25 million Akero Therapeutics (ACRE) and partnered with Roivant Sciences to launch Proivant Therapeutics in autoimmune diseases.
But sickle cell disease is an attractive market. Researchers now understand the cause of the disease. Crispr Therapeutics (CRSP) i Vertex Pharmaceuticals (VRTX) are also working on a gene editing approach.
GBT shares, however, were limited until this week. The stock now has a relative strength rating of 98 out of a best possible 99. That puts its 12-month performance in the top 2% of all stocks in terms of share price performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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