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Novo Nordisk bids for Global Blood Therapeutics

March 8, 2017

Danish drugmaker Novo Nordisk A/S (NOVOb.CO) has approached Global Blood Therapeutics Inc (GBT.O), a U.S. biotechnology company focused on serious blood disorders, to discuss a potential acquisition, people familiar with the matter said.

The approach comes as Novo Nordisk seeks to shore up declining sales from its aging diabetes franchise. With its suite of blood disease treatments under development, Global Blood Therapeutics would be a boon to Novo Nordisk’s portfolio.

Global Blood Therapeutics is now working with an investment bank to review its options, and there is no certainty that it will enter into negotiations with Novo Nordisk or that it will explore a sale, the people said this week.

The sources asked not to be identified because the matter is confidential. Global Blood Therapeutics and Novo Nordisk declined to comment.

Global Blood Therapeutics shares rose as much as 32 percent on the news, and were trading up 15 percent at $32.45 in late morning trading in New York on Wednesday, giving the San Francisco-based company a market capitalization of around $1.4 billion. Novo Nordisk shares were down 1 percent.

Novo Nordisk has eschewed acquisitions in the past, as it focused on building its market-leading position in supplying insulin and other treatments for diabetics.

But the diabetes market has soured recently, with increasing competition squeezing prices, particularly in the United States, prompting the Danish group to warn last month that sales and profits might slip this year.

Novo Nordisk’s new CEO Lars Fruergaard Jorgensen, who took over in January, is under pressure to find new growth drivers for the group and he still has considerable financial firepower for “bolt-on” acquisitions in adjacent therapy areas.

Outside diabetes, Novo Nordisk already has a significant blood products business focused on hemophilia. However, its mainstay NovoSeven hemophilia drug could face challenges with Roche’s new product ACE910 having the potential to erode sales.

Global Blood Therapeutics, which went public just two years ago, would offer a way diversify the Novo blood business and take it into new areas, including sickle cell disease and serious conditions in which the lungs cannot supply adequate oxygen to the blood.

The loss-making U.S. biotechnology company’s most advanced compound is GBT440, a once-daily pill for sickle cell disease that has moved to Phase II clinical testing on some indications.

Around 160,000 people suffer from sickle cell disease in the United States and Europe. Current treatments cost around $200,000 per year in the United States, and do not cure the disease.

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