In order to counteract a potential slowdown in the market for Covid-19 drugs as cases decline, Pfizer Inc. is bolstering its pipeline with the latest in a string of acquisitions, a $5.4 billion transaction for blood disease developer Global Blood Therapeutics.
Prior to the Wall Street Journal’s report that Pfizer was in advanced negotiations to acquire the company, Pfizer announced on Monday that it would pay $68.50 per share, representing a premium of 7.3% to the stock’s closing price on Friday for Global Blood and a 42.7% premium to the closing price on Thursday.
Since the Covid-19 vaccine, created by Pfizer and BioNTech, was made available worldwide, sales have increased at a never-before-seen rate. Nevertheless, starting last year, sales have started to slacken.
However, Pfizer, flush with cash from sales of its Covid-19 vaccine, has been searching for acquisitions that could, by the end of the decade, generate annual sales in the billions.
Pfizer recently closed a $6.7 billion deal to acquire Arena Pharmaceuticals, and in May it paid $11.6 billion for migraine medication maker Biohaven Pharmaceutical Holding.
With the purchase of Global Blood Therapeutics, Pfizer will expand its Oxbryta business for the treatment of uncommon diseases.
For the first time, Oxbryta was licenced in 2019 to treat sickle cell disease in patients 12 years of age or older, and in December of the previous year, for younger patients.
In the United States, between 70,000 and 100,000 people are thought to be affected with the genetic blood ailment known as sickle cell disease. Sales of the oral medication totaled $55.2 million for the business in the first quarter of 2022.
When key assets start to lose their patent protection at the end of the decade, “the Street has wanted PFE to continue to bring in new assets to improve earnings visibility beyond that point, and for the company to diversify its sales concentration in Covid drugs,” Cantor Fitzgerald analyst Louise Chen said.
Shares of Global Blood increased 4.5% after the announcement of the deal.