IPO Report: Global Blood Therapeutics (GBT)

Francis Gaskins |

Global Blood Therapeutics (GBT) is a biopharmaceutical company dedicated to discovering, developing and commercializing novel therapeutics to treat grievous blood-based disorders. The company is based in South San Francisco, CA.

Three other companies are scheduled for the week of Aug. 9. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Morgan Stanley, Goldman Sachs
Co-managers: Cowen and Company, Wedbush PacGrow

End of lockup (180 days): Cowen and Company, Wedbush PacGrow
End of 25-day quiet period: Monday, Sept. 7, 2015

GBT scheduled a $102 million IPO with a market capitalization of $473 million at a price range midpoint of $17 for Wednesday, Aug. 12, 2015 on Nasdaq.

GBT IPO Summary

GBT is a biopharmaceutical company dedicated to discovering, developing and commercializing novel therapeutics to treat grievous blood-based disorders.

GBT IPO Valuation

Glossary

Accumulated deficit (mm)

.

.

-$58

     

Per share dilution

.

.

-$12.05

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Global Blood Therapeutics (GBT)

$476

n/a

-16.1

3.4

3.4

21%

             

GBT IPO Conclusion

Positive

Sickle Cell Disease

Targets the underlying mechanism of red blood cell sickling

P/E pf -16 indicating moderate cash furn rate relative to market cap

Price to book of3.4

GBT Business

GBT is a biopharmaceutical company dedicated to discovering, developing and commercializing novel therapeutics to treat grievous blood-based disorders.

Phase 1/2 clinical trial
GBT is developing its initial product candidate, GBT440, as a once-daily, oral prophylactic therapy for sickle cell disease, or SCD, and are currently evaluating GBT440 in both healthy subjects and SCD patients in a randomized, placebo-controlled, double-blind clinical trial that GBT characterizes as a Phase 1/2 clinical trial.

SCD is a disease marked by severe pain “crises,” recurrent hospitalizations, multi-organ damage, and early mortality.

Targets the underlying mechanism
GBT440 targets the underlying mechanism of red blood cell sickling, which GBT believes may provide the potential to treat SCD rather than only its associated symptoms.

In addition to GBT440 for the treatment of SCD, GBT is leveraging its deep scientific expertise in the chemical and biological mechanisms of blood-based disorders to target hypoxemic pulmonary disorders and hereditary angioedema, or HAE.

GBT owns rights to its product candidate portfolio in the United States, Europe and other major markets. GBT owns or co-owns one issued U.S. patent that covers the composition of matter for GBT440, which is due to expire in 2032 (absent any applicable patent term extensions), and GBT owns or co-owns additional pending patent applications in the United States and selected foreign countries.

Given the concentrated prescriber bases for its targeted indications, GBT intends to promote its products with a specialty sales force in the United States and Europe.

GBT is also evaluating options for commercializing GBT440 in other significant markets, given the concentration of SCD in populations of African, Middle Eastern and South Asian descent.

Sickle Cell Disease
SCD is a chronic, inherited blood disorder caused by a genetic mutation in the beta-chain of hemoglobin, which results in the formation of abnormal hemoglobin known as sickle hemoglobin, or HbS. Hemoglobin is contained within red blood cells, or RBCs.

In its deoxygenated state, HbS has a propensity to polymerize, or bind together into long, rigid rods within an RBC, much like a “sword within a balloon.” Once HbS polymerizes, the RBC assumes a sickled shape and becomes inflexible, which can cause blockage in small blood vessels.

Beginning in childhood, SCD patients suffer unpredictable and recurrent episodes or crises of severe pain due to blocked blood flow to organs, which often lead to psychosocial and physical disability. This blocked blood flow, combined with hemolytic anemia (the destruction of RBCs), can lead to multi-organ damage and early death.

A 2014 publication noted that in the United States, SCD results in a decrease of approximately 25 to 30 years in life expectancy.

Current treatment options
Current treatment options for SCD are limited to hydroxyurea, or HU, blood transfusions and bone marrow transplantation.

The utilization of these treatments is significantly limited due to their suboptimal efficacy and significant toxicity. As a result, patients with SCD continue to suffer serious morbidity and premature mortality.

Intellectual property
GBT’s patent portfolio includes three issued U.S. patents, two allowed U.S. patent applications, and several U.S. and foreign patent applications in the early stages of prosecution.

The issued patent (U.S. Patent No. 9,018,210) covering the composition of matter for GBT440 and analogs, which GBT may own jointly with the Regents of the University of California, or the Regents, was granted on April 28, 2015 and is currently expected to expire in 2032 absent any applicable patent term extensions.

The issued U.S. patents (U.S. Patent Nos. 8,952,171 and 9,012,450), covering the composition of matter for GBT440 analogs, were granted on February 10, 2015 and April 21, 2015, respectively, and are currently expected to expire in 2033 and 2032, respectively, absent any applicable patent term extensions. GBT also owns U.S. Patent No. 9,012,450 jointly with the Regents.

Competition
There are many public and private biopharmaceutical companies, universities, governmental agencies and other research organizations actively engaged in the research and development of products that may be similar to GBT’s product candidates or address similar markets. In addition, the number of companies seeking to develop and commercialize products and therapies similar to GBT’s product candidates is likely to increase.

In the area of SCD, GBT expects to face competition from HU (marketed as DROXIA or Hydrea by Bristol-Myers Squibb Company as well as in generic form), which is currently the only approved therapeutic for the treatment of SCD.

Several companies are also developing product candidates for chronic treatment in SCD, including Selexys Pharmaceuticals Corporation (in collaboration with Novartis AG), which is engaged in the clinical development of SelG1, an anti-P-selectin monoclonal antibody, and Baxter International Inc., which is conducting a Phase 2 clinical trial of Aes-103, an orally available small molecule compound that is also intended to work by increasing hemoglobin oxygen affinity. GBT also expects to face competition from one-time therapies for SCD, including hematopoietic stem cell transplantation, gene therapy and gene editing.

In particular, Bellicum Pharmaceuticals, Inc. is conducting a Phase 1/2 clinical trial of BPX-501 as an adjunct T-cell therapy administered after allogeneic hematopoietic stem cell transplant in pediatric patients with orphan inherited blood disorders, and bluebird bio, Inc. is currently engaged in the clinical development of LentiGlobin BB305, which aims to treat SCD by inserting a functional human beta-globin gene into the patient’s own hematopoietic stem cells, or HSCs, ex vivo and then transplanting the modified HSCs into the patient’s bloodstream.

In HAE, GBT expects to face competition from several FDA-approved therapeutics, including Cinryze, marketed by Shire plc in the United States and Europe for the prevention of angioedema attacks in adults and adolescents; Firazyr, marketed by Shire plc in the United States, Europe and certain other geographic territories for the treatment of acute angioedema attacks in adult patients; KALBITOR, marketed by Dyax Corp. for the resolution of acute attacks in adolescent and adult HAE patients; Berinert, marketed by CSL

Behring for the treatment of acute abdominal, facial or laryngeal attacks of HAE in adults and adolescents; and Ruconest, marketed by Pharming Group NV in Europe and Salix Pharmaceuticals, Ltd. in the United States for the treatment of acute angioedema attacks in adult patients.

GBT is also aware of companies, including Dyax Corp. and Biocryst Pharmaceuticals, Inc., that are engaged in the clinical development of other product candidates, including a kallikrein monoclonal antibody and oral kallkrein inhibitors, respectively, for the treatment of HAE patients.

5% shareholders pre-IPO
Entities affiliated with Third Rock Ventures                     63.0%    

Entities affiliated with Fidelity     13.2%  

Dividends
No dividends are planned.

Use of proceeds
GBT expects to receive $93 million from its IPO and use it for the following:

$50.0 million to fund its development of GBT440 for the treatment of SCD, including the completion of its ongoing Phase 1/2 clinical trial, planned clinical pharmacology studies and through the initiation of a pivotal clinical trial;

$15.0 million to conduct clinical trials of GBT440 or its analogs for the treatment of hypoxemic pulmonary disorders;

$15.0 million to complete and file an IND and begin a Phase 1/2 clinical trial of an oral kallikrein inhibitor for the treatment of HAE; and

the remaining proceeds, if any, to fund new and ongoing research and development activities, working capital and other general corporate purposes, which may include funding for the hiring of additional personnel, capital expenditures and the costs of operating as a public company.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
GBT Global Blood Therapeutics Inc. 16.25 0.00 0.00 442,217

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