Reports indicate that Global Blood Therapeutics Inc (NASDAQ:GBT) has received takeover interest and is consequently considering a sale. Global Blood, which makes blood disorder treatments, is said to have engaged financial advisers who will assist the company in reviewing the options that it has.
Danish interest
According to Reuters, Global Blood was approached by Novo Nordisk A/S (ADR) (NYSE:NVO), the Danish pharmaceutical giant with a view to making an acquisition. Novo Nordisk’s interest is motivated by the fact that it needs to increase revenues which have been on a downward trend. This is because it has been relying heavily on a diabetes franchise that is now aging. For Norvo Nordisk, Global Blood would an attractive acquisition target since the U.S. biotech firm has a couple of treatments for blood diseases that are under development and this would help offset Norvo Nordisk’s flagging sales once they come onstream.
Avoiding acquisitions no more
In the past, Norvo Nordisk has avoided acquisitions as it concentrated on consolidating its position as a market leader in the world as a supplier of insulin and other therapies for diabetics. But recently due to heightened competition and consequently falling prices, the diabetes market is not as lucrative as it used to be especially in the U.S. Just last month, the Danish drug giant warned that there might be a decline in revenues and profits this year. Lars Fruergaard Jorgensen, the chief executive officer of Norvo Nordisk and who is only three months on the job is therefore under pressure and needs to get new drivers of growth for the company.
Blood treatments
If Global Therapeutics goes ahead and accepts Norvo Nordisk’ bid, the two would enjoy synergies in the blood treatments segment as the Danish drugmaker has a blood products line that concentrates on hemophilia. NovoSeven, the hemophilia treatment that Norvo Nordisk manufactures, is, however, expected to face stiff competition from rivals who are said to be launching new products. Global Blood would therefore give Norvo Nordisk an opportunity to diversify and increase its portfolio of blood treatment products.
On Wednesday shares of Global Blood Therapeutics Inc shot up by 21.02% to close the day at $34.25.
