Why Global Blood Therapeutics Stock Is Vaulting Higher Today

What happened

Shares of rare-disease specialist Global Blood Therapeutics (GBT 37.11%) are rising sharply for the second day in a row. As of 12:38 pm ET, the drugmaker’s stock was up by a healthy 38.4%.

Global Blood Therapeutics’ shares have soared a whopping 104% so far this week. The biotech’s stock has bolted higher in response to a report from Bloomberg News that multiple suitors are currently courting the drugmaker.

Image source: Getty Images.

So what

In yesterday’s piece, Bloomberg News did not name any specific suitors. Today, however, The Wall Street Journal reported that pharma heavyweight Pfizer (PFE -0.93%) was in advanced talks to acquire Global Blood Therapeutics for approximately $5 billion. At present, Global Blood Therapeutics’ market cap is hovering around $4.32 billion.

Pfizer is currently on a spending spree following a massive influx of cash from its COVID-19 franchise. This deal, if it goes through, would land Pfizer the sickle cell disease drug Oxbryta, along with Global Blood Therapeutics’ pipeline of early-stage assets. Wall Street previously pegged Oxbryta’s peak sales at the $1 billion-a-year mark, but that revenue forecast came before gene therapies started to emerge as possible functional cures for the rare blood disorder.

Now what

Will Pfizer pull the trigger on this deal? Yesterday, I discussed the risks associated with Global Blood Therapeutics’ sickle cell franchise. In short, there are big question marks as to the viability of the company’s platform in an era when gene therapies are making significant headway.

Pfizer, however, does have a well-documented history of buying companies with risky assets. As such, this potential acquisition seems to fit the drugmaker’s business development profile. A buyout for Global Blood Therapeutics appears to be a real possibility now that Pfizer has emerged as the lead suitor.

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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