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This Is Why Global Blood Therapeutics Inc. Is Sinking Today

By Brian Feroldi - Dec 12, 2017 at 3:42PM

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Mixed clinical data from a case study involving a key compound causes traders to flee.

What happened

In response to the company announcing data from a case study at the American Society of Hematology meeting in Atlanta, shares of Global Blood Therapeutics (GBT 2.66%), a clinical-stage biotech focused on blood-based disorders, fell 13% as of 3:15 p.m. EST on Tuesday.

So what

Global Blood unveiled data from a study using its drug voxelotor (formerly called GBT440) as a hopeful treatment for severe sickle cell disease. The drug was provided on a compassionate use basis to seven patients who were not eligible to participate in the company's ongoing phase 3 HOPE trial. However, these seven patients were provided voxelotor and monitored over a 24-week period.

Here are the key takeaways from the study:

  • Hemoglobin values rose in all patients.
  • The drug was well-tolerated, and compliance rates were high.
  • Hospitalizations for pain fell by 67% when compared to the 24 weeks before beginning voxelotor. 
  • The number of transfusions decreased by 60% when compared to the 24-week period before the study.
  • Of the six patients who received transfusions prior to using voxelotor, two received no transfusions after treatment.

Overall, this data largely affirms what we learned about voxelotor just a few weeks ago. Unfortunately, all of these positives are being overshadowed by the news that two of the seven patients involved in the study died.

Given the mixed clinical news, it isn't hard to figure out why traders are hitting the sell button today.

Physician looking concerned

Image source: Getty Images.

Now what

While patient deaths in a study are never good news, it is important to realize that both had co-morbidities and advanced organ injury before they began treatment with voxelotor. As a result, the treating physicians stated that they did not believe that voxelotor contributed to their deaths.

Here's what Dr. Lanetta Bronte, who is one of the treating physicians and presenter of this data, had to say about the trial:

Patients with severe SCD, who often suffer life-threatening complications, are refractory to conventional therapy and thus are very difficult to manage because treatment options are extremely limited. We are grateful that these seven patients at our center were able to receive voxelotor through compassionate access and are so pleased with the clinical improvements we saw on meaningful endpoints.

For what it is worth, a handful of Wall Street analysts announced their vote of confidence for the stock in spite of the patient deaths. Nomura, Oppenheimer, and HC Wainwright recently issued price targets of $91, $79, and $73, respectively, for the stock within the last 24 hours. Those are very bullish numbers for a stock that is currently trading under $39 per share.

The next big data readout for investors to look forward to will occur in the "first half of 2018," which is when the company plans to announce top-line data from Part A of its HOPE Study.

Should risk-loving investors view today's drop as an opportunity to get in? There's an argument to be made that the answer is yes. After all, the clinical data sounded great, and the treating doctors do not think that voxelotor caused the two deaths. However, this Fool's view is that the situation is too dicey to have strong feelings either way. My plan is to keep away until we know more.

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