Shares of hematology biotech Global Blood Therapeutics (NASDAQ: GBT) are up 16.5% as of 10:30 a.m. EDT after the company posted upbeat second-quarter 2021 earnings. Sales of its sickle cell disease drug Oxbryta shot up 51% year over year to $47.6 million.
In a recent survey of 278 physicians, nearly all prescribers were satisfied with using the drug for disease control. SCD is a severe hereditary disease that causes distortions in blood hemoglobin. The irregularly shaped red blood cells can then block blood vessels, causing a life-threatening condition called a vaso-occlusive crisis.
Image source: Getty Images.
The results today should trouble some of the drug's skeptics. In clinical studies, Oxbryta had an effect in normalizing hemoglobin levels but did not show statistical significance in improving patients' episodes of VOCs. In addition, naysayers cite the success of experimental SCD gene therapies, such as one developed jointly by Vertex Pharmaceuticals and CRISPR Therapeutics, as evidence that SCD drugs will soon become redundant. As a result, over 20% of Global Blood's float is sold short.
The bears' premonition has a lot of backing. However, it's important to note that the gene therapy is still in phase 1/2 clinical trials and will take years to come to fruition. Until then, Global Blood can generate substantial sales with Oxbryta and reinvest those profits back into research and development to catch up. The company is trading at a bargain relative to that growth, with an enterprise value of just $1.5 billion. It is an enticing biotech that investors with a big risk appetite can add to their watch lists.
10 stocks we like better than Global Blood Therapeutics
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Global Blood Therapeutics wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 7, 2021
Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CRISPR Therapeutics. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.