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Global Blood Therapeutics Inc. Jumped as Much as 14% on This News

By Sean Williams - Oct 30, 2017 at 5:10PM

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The company's lead drug shines in a brand-new compassionate-use case study.

What happened

Shares of San Francisco-based Global Blood Therapeutics (GBT 2.19%), a small-cap developer of experimental therapies focused on treating blood-based disorders, rocketed higher by as much as 14% during Monday's trading session after reporting a positive case study this past weekend involving its lead drug candidate, voxelotor (previously known as GBT440).

So what

The case study, which was presented at the Sickle Cell Disease Association of America's annual convention, highlighted a patient with sickle cell disease who was ineligible to participate in the company's ongoing phase 3 Hope trial due to severe transfusion-refractory anemia. As you can infer from the stock's strong move higher on Monday, voxelotor appears to have helped this patient, who received voxelotor on a compassionate-use basis.

A biotech lab researcher holding a vial of blood and making notes on a clipboard.

Image source: Getty Images.

The 67-year-old patient began showing a response within one to two weeks after receiving a 900 mg dose of the drug orally once a day. In particular, data from this case study showed an improvement in pain, fatigue, and overall mental health. Hemoglobin levels rose quickly and were sustained over a 66-week period, while reductions in reticulocyte (an indicator of increased production to replace damaged red blood cells) and bilirubin (a measure of red blood cell destruction) were noted. Perhaps most notable is that no hospitalization prompted by sickle cell pain has occurred since the patient began the daily regimen, and the only adverse event was grade 2 diarrhea, which was resolved when researches pulled back on the daily dose to 900 mg from a brief period of 1,500 mg a day.

"We are thankful that this severely ill patient was able to access voxelotor through compassionate use and are encouraged by the profound clinical benefit this investigational therapy has provided," said Lanetta Bronte, M.D., founder of the Foundation for Sickle Cell Disease Research, and an author on this case study. 

Now what

This isn't the first time voxelotor has impressed Wall Street and researchers.

In December, at the American Society of Hematology's annual conference, the company presented promising data on 41 sickle cell disease patients that had what was described as "profound and durable reactions in irreversibly sickled cells compared to those taking placebo." In particular, a hemoglobin increase of greater than 1 g/dL was observed in 46% of voxelotor patients compared to 0% of the 14 placebo patients after a 90-day period. 

A doctor in deep thought.

Image source: Getty Images.

While this study is potentially great news for sickle cell disease patients, who as of now have an unmet need for medicines that can improve their long-term outlook, investors have to keep in mind that it is just a solitary case study. Investors should also bear in mind that the Hope trial isn't expected to provide a data readout until the first half of 2019. That's a long time for this company to go without a major catalyst.

There's also the prime concern of clinical-stage biotech companies: cash burn. In February, shareholders got burned when the company offered more than 5 million shares at a double-digit percentage discount to its previous-day closing price in order to raise cash. Keeping the lights on often means dilution for shareholders when it comes to clinical-stage biotech stocks.

For the time being, this investor would be more than happy to observe Global Blood Therapeutics from the safety of the sidelines.

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