Shares of Global Blood Therapeutics (GBT) lost over 10% last month, according to data provided by S&P Global Market Intelligence. Investors weren't excited about the third-quarter 2018 earnings report in early November, which didn't provide any juice to overcome volatility in the broader market. The business doesn't generate any revenue yet, but has been pouring money into R&D activities for its lone drug candidate. As a result, operating loss grew to $130 million through the first nine months of 2018, compared to an operating loss of $77 million in the year-ago period.
But investors found new reasons for optimism in early December. Global Blood Therapeutics reported impressive phase 3 data for its only drug candidate and announced that the U.S. Food and Drug Administration had agreed to the company's proposed accelerated approval pathway. That has catapulted shares 37% since the end of November.
If a pharmaceutical company is going to be a one-trick pony and go all in on a single drug candidate, then it had better deliver. Global Blood Therapeutics appears to be on track to doing just that with voxelotor, which it developed as a treatment for sickle cell disease.
In the recent data readout from the phase 3 study in adults and adolescents, 65% of patients taking the 1,500 mg dose achieved a clinically and statistically significant increase in hemoglobin, as well as 33% of patients taking a 900 mg dose. Only 10% of patients taking placebo achieved the same benchmark. Additionally, voxelotor induced significant improvements at the two-week mark and sustained the improvement through the 24-week cutoff for the recent data readout.
With that data in hand, Global Blood Therapeutics announced it proposed an accelerated approval pathway to the FDA, which agreed that possibility was on the table. Importantly, however, earning accelerated approval depends on an FDA review of the data submitted in the new drug application (NDA), which won't be filed until sometime in 2019.
Shortly after delivering the goods in the clinic the company took advantage of a rising stock price and issued $150 million in shares. That padded a balance sheet that had $383 million in cash, cash equivalents, and short-term investments at the end of September. Global Blood Therapeutics will need to hit the ground running with commercialization efforts for voxelotor -- assuming the drug gains marketing approval.
For now, investors have to wait for a pre-NDA meeting with the FDA, scheduled for the first quarter of 2019. Global Blood Therapeutics will then issue an update, presumably submit an NDA, and await the regulator's decision later in the year.