rumors that Pfizer (PFE) is in “advanced talks” to take over Global Blood Therapy (GBT) for about $5 billion caused GBT shares to fly for the second consecutive day on Friday.
Global Blood Therapeutics makes a treatment for sickle cell disease called Oxbryta for patients 4 years and older. According to the Wall Street Journal, Pfizer will finalize the deal for Global Blood in the coming days. Other suitors are in the mix, though, and the deal isn’t set in stone. Pfizer representatives did not immediately return a request for comment. A GBT spokesperson declined to comment.
GBT shares have skyrocketed this week on the rumours, first reported by Bloomberg on Wednesday. According to MarketSmith.com, shares rose more than 41% on Thursday, breaking out of a long consolidation with a buy point of 40.79.
In today’s stock market afternoon trading, shares rose another 37.5% at 66. Pfizer shares fell 0.9% at 49.40.
GBT Stock: Rare Disease Efforts
Global Blood Therapeutics was founded in 2011. It markets Oxbryta for the treatment of sickle cell disease and has two other promising treatments in early stages of human testing. Latest efforts are also focused on sickle cell disease and vaso-occlusive crises, a complication of sickle cell disease.
In the June quarter, GBT stock analysts expect Oxbryta to generate more than $64 million in revenue. Global Blood Therapeutics comes to deck Monday to release its second quarter results.
Buying Global Blood would bolster Pfizer’s efforts in the field of rare diseases. Today, that portfolio mainly includes Vyndaqel. Vyndaqel treats a condition in which abnormal proteins build up on the heart. In the second quarter, Vyndaqel had revenue of $552 million. The entire rare disease business brought in $909 million in revenue, growing just 2%.
Vyndaqel is also likely to face competition in the near future. Alnylam Pharmaceuticals (ALNY) and Intellia Therapeutics (NTLA) are among those fishing to treat the same disease. So there is pressure to add to that portfolio. Rare diseases accounted for just 3% of Pfizer’s total sales in the June quarter.
Pfizer has money to burn
Analysts were chasing Pfizer to get more greedy. The Covid vaccine and the antiviral pill have been huge money makers. Pfizer expects $54 billion in revenue this year just between the two products — the fruits of which it could invest in acquisitions like GBT stock.
This year, Pfizer agreed to buy the migraine drug assets of: Biohaven Pharmaceuticals (BHVN), invested $25 million in Akero Therapeutics (AKRO) and partnered with Roivant Sciences to launch Proivant Therapeutics in Autoimmune Diseases.
But sickle cell disease is an enticing market. Researchers now understand the cause of the disease. Crispr Therapeutics (CRSP) and Vertex Pharmaceuticals (VRTX) are also working on a gene editing approach.
However, GBT shares were limited until this week. Stocks now have a Relative Strength Rating of 98 out of the best possible 99. This places their 12-month performance in the leading 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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