Is their more upside for Global Blood Therapeutics Inc (NASDAQ:GBT)

In the past one-month trading session, Global Blood Therapeutics Inc (NASDAQ: GBT) recorded a 51.3% increase with the stock price hovering around its 52-week high levels. Meanwhile, 3-month price gains stand at 132.3%. In early March 2017, Danish drug maker Novo Nordisk A/S approached GBT to discuss a potential acquisition in order to push its declining sales from its aging diabetes franchise. With its suite of blood disease treatments under development, Global Blood Therapeutics would be a boon to Novo Nordisk’s portfolio. Additionally, GBT has significant upside in sickle cell disease with GBT440 progressing well into the phase 3 trial. Phase 2 results were more than excellent.

Cantor Fitzgerald initiated the group with an overweight rating and a price target of $61 indicating upside of 61.6% from current levels. An analyst at the rating agency commented that GBT’s lead candidate, GBT440, has demonstrated the compelling potential for the treatment of sickle cell disease (SCD), based on its reported clinical efficacy and safety data. Also, it believes that the mechanism of action of oxygen affinity modulation is strongly validated in the scientific literature. Sickle cell disease remains a therapeutic area with a significant unmet need, for which the only approved therapy demonstrating clinical benefit is carcinogenic. Global Blood is currently enrolling up to 400 patients with SCD in its Phase 3 study.

Analysts still remain bullish on Global Blood Therapeutics as SCD remains a key for driving the company’s growth. With an estimated 100,000 patients with SCD in the U.S. alone, and the approved therapy being associated with significant adverse effects, the analyst believes that GBT440 could profoundly and safely change the course of SCD, potentially improving survival meaningfully. Piros expects sales of GBT440 to reach $2 billion in the U.S. when the drug achieves peak penetration of 30%.

For the fourth quarter, Global Blood Therapeutics recorded cash, cash equivalents, and marketable securities $197.3 million as of December 31, 2016, compared with $148.5 million at December 31, 2015. Net loss for the three months ended December 31, 2016, was $27.2 million or $0.74 per share compared with $15.6 million or $0.53 per share for the same period in 2015. Research and development (R&D) expenses for the three months ended December 31, 2016 were $20.4 million compared with $11.4 million for the same period in 2015.


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