Global Blood Therapeutics' Acquisition Value Could Be At Least $3 Billion

Global Blood Therapeutics Inc GBT is in the process of developing GBT440 to reduce the severity and frequency of crises and pain associated with sickle cell disease and to improve blood oxygenation characteristics and quality of life for idiopathic pulmonary fibrosis.

The release of Phase 2a GBT440 testing in IPF, expected sometime in 2017, would be “the most material catalyst unless GBT is acquired,” Wedbush’s Liana Moussatos said in a report. She added that the recent share gains due to acquisition speculation are “too low.”

Acquisition Value

Moussatos assumed coverage of Global Blood Therapeutics with an Outperform rating and a price target of $73.

GBT440’s emerging clinical profile suggests that the compound could become the foundation treatment for SCD. So far, the once daily oral dosing has shown to be “safe and well tolerated,” while longer-term dosing suggests “durability of effect and in our view partially de-risks Phase 3,” the analyst mentioned.

The recent share gains on acquisition speculation seem too low, given GBT440’s profile suggests a “multi-billion dollar gross peak annual sales opportunity,” Moussatos commented. She believes that the appropriate acquisition value is between $73 and $87 per share, translating to $3 billion–$4 billion market capitalization, with GBT440 for SCD contributing about $73 per share or $3 billion market capitalization.

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