Rumors that Pfizer (PFE) is in “advanced talks” to acquire Global Blood Therapeutics (GBT) for about $5 billion sent GBT shares soaring for a second straight day on Friday.
Global Blood Therapeutics makes a sickle cell treatment called Oxbryta for patients ages 4 and older. According to the Wall Street Journal, Pfizer is expected to finalize the deal for Global Blood in the coming days. However, other suitors are in on it and the deal is not set in stone. Pfizer representatives did not immediately return a request for comment. A GBT spokesperson declined to comment.
GBT stock has exploded this week on rumors, first reported on Wednesday by Bloomberg. Shares jumped more than 41% on Thursday, breaking out of a long consolidation with a buy point at 40.79, according to MarketSmith.com.
In today’s stock market, shares jumped another 33% to 63.84. Pfizer shares fell 1.2% to 49.27.
Stock GBT: Efforts against rare diseases
Global Blood Therapeutics was founded in 2011. It sells Oxbryta for the treatment of sickle cell disease and has two other treatments showing promise in early-stage human testing. These latest efforts also focus on sickle cell disease and vaso-occlusive crises, a complication of sickle cell disease.
In 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 results on Monday.
The purchase of Global Blood would strengthen Pfizer’s efforts in rare diseases. Today, this portfolio notably includes Vyndaqel. Vyndaqel treats a disorder in which abnormal proteins build up on the heart. In the second quarter, Vyndaqel had revenue of $552 million. The entire rare diseases business generated $909 million in sales, up just 2%.
Vyndaqel is also likely to face competition in the near future. Alnylam Pharmaceuticals (ALNY) and Therapeutic Intellia (NTLA) are among those fishing to treat the same disease. So the pressure is on to add to that 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 to Pfizer to become more of a buyer. His Covid vaccine and anti-viral pill have been huge earners. Pfizer expects $54 billion in revenue this year alone between the two products, which it could invest in acquisitions such as GBT shares.
This year, Pfizer agreed to purchase the migraine drug assets of Biohaven Pharmaceuticals (BHVN), invested $25 million in Therapeutic Akero (AKRO) 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 Therapeutic (CRSP) and Vertex Pharmaceuticals (VRTX) are also working on a gene editing approach.
GBT action, however, was limited until this week. The stocks now have a relative strength rating of 98 out of the best possible 99. That puts their 12-month performance in the top 2% of all stocks in terms of stock price performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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