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Global Blood Therapeutics: Nothing Exciting Yet

Mar. 08, 2020 12:57 PM ETPfizer Inc. (PFE)6 Comments


  • GBT has just begun commercializing Oxbryta, used in SCD treatment.
  • The drug is expensive and is up against stiff competition from generic Droxia.
  • However, commercial success could still be achieved and GBT has a promising pipeline.

Thesis Summary

Global Blood Therapeutics Inc (GBT) has recently begun commercializing Oxbryta (Voxelotor). The drug is used in treating Sickle Cell Disease (SCD). While there is not much sales data to go on yet, given the results of the clinical trial and positive feedback from physicians, while the drug could become a standard treatment in managing SCD it is up against stiff competition and there is no evidence of its commercial success yet.

Company Overview

GBT has been developing Oxbryta for some time now and commercialization finally began last quarter, reporting a total of $2.1 million in revenues which can be attributed mainly to the sale of existing stockpiles. Not surprisingly, the company is still operating at a loss, reporting EPS of -$1.73.

Having said this, let’s let a quick look at the Balance Sheet.

Source: 10-k

As we can see, the company has increased its liabilities, mainly in the form of long-term debt. This coincides with the commercialization effort that will take place in 2020. Notably, the company didn’t have much debt before that and holds a strong cash position of over $300 million. However,m it is worth noting the accumulated deficit of over $700 million.

In any case, the company is now well-positioned to begin commercializing Oxbryta. The question is as always: Will the drug succeed?

Product and Market

Let’s take a look at what exactly Oxbryta does. This drug is used to treat SCD which is a rare affliction that occurs in red blood cells. It can take many forms but it means that oxygen has more trouble getting around the body. The active ingredient in Oxbryta, Voxelotor, binds to hemoglobin and increases its ability to carry oxygen. It works somewhat like this:

Source: Investor Presentation

Clinical trials have proven success and the drug has been approved

This article was written by

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Comments (6)

LQQKER profile picture
You probably meant $120,000, not $120.000 on drug cost. Fyi.
User 21552181 profile picture
@The Value Trend

Droxia (hydroxyurea) and Oxbryta (voxelotor) have completely different actions in SCD. Hydroxyurea increases the amount of fetal hemoglobin. Oxbryta reduces the polymerization of sickle hemoglobin by preventing complete deoxygenation (by shifting the oxygen dissociation curve). The benefits of Oxbryta are seen whether the patient is taking hydroxyurea or not. Hydroxyurea is therefore not a competition.
Tepid analysis. Management not helpful.
I have a few shares GBT here for the long term , but I could also see this stock going the way of PRTK (also long)--where until the sales and revenue materialize the stock price absolutely tanks.
08 Mar. 2020
Why was Oxbryta fast tracked by the FDA if there was a product already on the market for SC patients? Droxia is not a very effective drug. Time is needed, be patient. Long GBT.
Not only was Oxbryta fast tracked but the FDA approved it 3 months prior to the PDUFA date. The reason it was fast tracked and approved 3 months earlier than even a normal fast track is because it addressed an unmet need. Obviously Droxia is not considered competition for what Oxbryta Can do. It addresses the root mechanism of SCD not just one of its symptoms.
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