Pfizer Inc. (NYSE: PFE) has reached an agreement to acquire Global Blood Therapeutics Inc (NASDAQ: GBT) in a $5.4 billion deal. The addition of a blood disorder drug will boost Pfizer’s drug pipeline. This is the latest in a series of acquisitions aimed at supporting Pfizer as it approaches a potential decline in COVD-19 products as cases continue to decline.
Pfizer pays $5.4 billion to buy global blood therapy
Pfizer has agreed to pay $68.50 per share for Global Blood Therapeutics, which equates to a 7.3% premium over the blood drug maker’s closing stock price on Friday. This price is 42.7% higher than Thursday’s closing price. The Wall Street Journal reported on Thursday that Pfizer and Global Blood Therapeutics are in the advanced stages of acquisition talks.
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CNBC Note that Pfizer has seen sales spikes since launching the vaccine for COVID-19, developed in partnership with BioNTech. However, the drugmaker has seen sales slow since last year as respiratory illnesses continue to decline.
Despite Pfizer’s slowing sales, Pfizer is still looking for potential acquisition targets. The drugmaker still has the proceeds from the sale of its COVID vaccine. Pfizer’s acquisition plans aim to add billions of dollars to its annual revenue by 2030.
Pfizer’s recent acquisitions to build its drug pipeline
In May, the company paid $11.6 billion to acquire Biohaven Pharmaceutical Holding, a company that makes migraine medications. Pfizer also closed its recent $6.7 billion acquisition of Arena Pharmaceuticals.
The purchase of Global Blood Therapeutics will advance the company’s rare disease pipeline with the addition of Oxbryta, a sickle cell disease treatment. The drug was initially approved in 2019 to treat the disease in patients 12 years of age and older, but that approval was extended to apply to younger patients in December 2021.
Sickle cell disease is an inherited blood disorder affecting approximately 70,000 to 100,000 people in the United States. Oxbryta generated $55.2 million in revenue for the Global Blood Therapy Service in the first quarter. Analyst Cantor Fitzgerald told CNBC that Wall Street wants Pfizer to keep adding new assets to broaden its horizons into income released at the end of the decade.
That’s when many important assets of drug manufacturers begin to lose patent protection. Additionally, investors want Pfizer to diversify its current COVID drug concentration.
Shares of Pfizer were mostly flat at midday on Monday, while shares of Global Blood Therapeutics were up about 4%. Shares have more than doubled since Thursday, rising from about $34 at Wednesday’s close to about $47 in early Thursday trading. It then spiked to around $47 by midday on Friday. Global blood therapy increased by 4% early Monday.
Originally published on ValueWalk. Read here.
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