Global Blood Therapeutics Sinks on Secondary Offering

Global Blood Therapeutics Inc. (NASDAQ: GBT) has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding a secondary offering. The offering is valued up to $100 million, with an overallotment option for an additional $15 million in common stock.

The underwriters for the offering JPMorgan, Morgan Stanley, Cowen and Wedbush PacGrow.

This clinical-stage biopharmaceutical company is dedicated to discovering, developing and commercializing novel therapeutics to treat grievous blood-based disorders with significant unmet need. The company is developing an initial product candidate, GBT440, as an oral, once-daily therapy for sickle cell disease (SCD) and is currently evaluating GBT440 in SCD subjects in an ongoing Phase 1/2 clinical trial.

[nativounit]

SCD is a genetic disease marked by red blood cell (RBC) destruction and occluded blood flow and hypoxia, leading to anemia, stroke, multi-organ failure, severe pain crises and shortened patient life span. GBT440 inhibits abnormal hemoglobin polymerization, the underlying mechanism of RBC sickling. In clinical trials of GBT440 in SCD subjects, the company observed reduced markers of RBC destruction, improvements in anemia, improvements in markers of tissue oxygenation, reduced numbers of sickled RBCs and reduced markers of inflammation.

In addition to GBT440 for the treatment of SCD, the company intends to evaluate GBT440 for the treatment of hypoxemic pulmonary disorders and expects to initiate a Phase 2a clinical trial of GBT440 in a hypoxemic pulmonary disorder in the second quarter of 2016 and expects to initiate a Phase 2b clinical trial of GBT440 in a hypoxemic pulmonary disorder in the second half of 2016.

The company is also engaged in other research and development activities targeted toward hereditary angioedema (HAE). In 2015, the company nominated GBT018713, a proprietary, small molecule kallikrein inhibitor, for development as an orally administered therapy intended for the prevention of HAE attacks. The plan is to complete toxicology studies to enable the filing of an Investigational New Drug (IND) application. Subject to submission and clearance of the IND, the company expects to initiate a Phase 1 clinical trial for GBT018713 in early 2017.

The company described its finances in the filing as follows:

We have never been profitable and have incurred net losses in each year since inception. Our net losses were $16.6 million and $7.4 million for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016 we had an accumulated deficit of $115.1 million. To date, we have not generated any revenue. We do not expect to receive any revenue from any product candidates that we develop until we obtain regulatory approval and commercialize our products or enter into collaborative agreements with third parties. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. As of March 31, 2016, we had $134.0 million of cash and cash equivalents.

[wallst_email_signup]

The net proceeds from this offering will be put toward the research and development of the company’s pipeline, as well as working capital and general corporate purposes.

Shares of Global Blood Therapeutics were trading down more than 9% at $21.93 Monday morning, with a consensus analyst price target of $60.50 and a 52-week trading range of $12.24 to $57.00.