William Blair Values Global Blood Therapeutics' Stock At $80

Global Blood Therapeutics Inc GBT, a clinical-stage biopharmaceutical company that develops therapeutics to treat blood-based disorders, received a breakthrough therapy designation in early January that has at least one analyst optimistic as to what will come next.

The Analyst

William Blair's Raju Prasad initiated coverage of Global Blood Therapeutics' stock with an Outperform rating and $80 price target.

The Thesis

Global Blood's therapy for the treatment of sickle cell anemia called voxelotor received a breakthrough therapy designation (BTD) from the U.S. Food and Drug Administration in early January, Prasad said in a note. This could pave the way for the company to show in its phase 3 trial called HOPE Part A that the data set for voxelotor will be sufficient enough to justify a regulatory filing. In fact, Global Blood's management already said the interim analysis of HOPE Part A was given to the FDA as part of the application.

The data is likely to show "consistent expression of greater than 1 g/dL increase in hemoglobin," Prasad said. In addition, it will likely confirm the utility of the patient-reported outcome scale in defining real-world benefits to the patient population.

Looking forward, voxelotor will likely see revenue of around $1.5 billion in the U.S., $260 million in the European Union and another $11 million in licensing revenue by 2027, the analyst said. While this timeframe is nearly 10 years away there will likely be competitors in the space but Global Blood's once-daily, oral small molecule approach will likely be viewed favorably by the patient community.

Price Action

Shares of Global Blood Therapeutics were trading higher by more than 5 percent at $59.30.

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