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Pfizer Has Cash To Burn — So It Might Buy This Soaring Biotech

Rumors that Pfizer (PFE) is in “advanced talks” to acquire Global Blood Therapeutics (GBT) for about $5 billion sent GBT stock flying for a second consecutive day Friday.


Global Blood Therapeutics makes a sickle cell disease treatment called Oxbryta for patients age 4 and older. According to the Wall Street Journal, Pfizer is set to finalize the deal for Global Blood in the coming days. Other suitors are in the mix, however, and the deal isn’t set in stone. Representatives of Pfizer didn’t immediately return a request for comment. A GBT spokesman declined to comment.

GBT stock has rocketed this week on the rumors, first reported Wednesday by Bloomberg. Shares surged more than 41% on Thursday, breaking out of a long consolidation with a buy point at 40.79, according to MarketSmith.com.

On today’s stock market, shares jumped another 33% to 63.84. Pfizer stock fell 1.2% to 49.27.

GBT Stock: Rare-Disease Efforts

Global Blood Therapeutics was founded in 2011. It sells Oxbryta for sickle cell disease treatment and has two other promising treatments in early-stage human testing. The latter efforts are also in 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 earnings on Monday.

Buying Global Blood would bolster Pfizer’s efforts in rare diseases. Today, that portfolio includes, most notably, Vyndaqel. Vyndaqel treats a disorder in which abnormal protein builds up on the heart. In the second quarter, Vyndaqel brought in $552 million in sales. The whole rare diseases business brought in $909 million in sales, growing just 2%.

Vyndaqel is also likely to face competition in the near future. Alnylam Pharmaceuticals (ALNY) and Intellia Therapeutics (NTLA) are among those angling 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 Cash To Burn

Analysts have been after Pfizer to become more acquisitive. Its Covid vaccine and antiviral pill have been huge moneymakers. Pfizer expects $54 billion revenue this year just between the two products — the fruits of which it could invest in acquisitions such as GBT stock.

This year, Pfizer agreed to buy the migraine drug assets from Biohaven Pharmaceuticals (BHVN), invested $25 million in Akero Therapeutics (AKRO) and teamed up 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.

GBT stock, however, was rangebound until this week. Shares now have a Relative Strength Rating of 98 out of a best-possible 99. This puts their 12-month performance in the leading 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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