Global Blood Therapeutics Inc (GBT): Breakthrough Designation for Lead Asset Has This Top Analyst Hopeful on Voxelotor’s Prospects

One of Wall Street's best analysts believes "the first cut" of data evaluating GBT's sickle cell disease drug is looking pretty good right now.

Global Blood Therapeutics Inc (NASDAQ:GBT) shares fired up almost 18% on Tuesday after the drug maker’s lead candidate voxelotor earned itself an FDA breakthrough designation in sickle cell disease (SCD), the first compound in the biotech-verse to achieve this milestone.

The application not only showcased to the FDA prior results from Phase 1 and Phase 2 studies, but likewise initial efficacy and safety data from a subgroup of patients enrolled in Part A of the company’s ongoing Phase 3 HOPE study. In other words, this positive decision from the agency could translate quite well when the full HOPE data for both Parts A and B come to light.

Top analyst Ritu Baral at Cowen deems this “breakthrough designation [a] likely tacit not to [the] strength of Hope [Part] A SCD data,” and in reaction, the analyst reiterates an Outperform rating on GBT stock with an $83 price target, which implies a close to 55% upside from current levels.

“We believe that the agency’s favorable review suggests ongoing consistency of the drug’s efficacy, and benign safety,” writes Baral who takes the news in bullish stride as a “likely preliminary encouraging readthrough” for the HOPE trial.

For those questioning, “What does this mean?” the analyst answers making a confident case for the future success of GBT’s voxelotor: “We think the first cut of HOPE Pt A Data Probably Looks Good. At the very least, we believe this decision suggests the drug continues to be characterized by very encouraging preliminary signs of efficacy (viewed through the lens of the profound unmet need in SCD) as well as a good safety and tolerability profile. GBT indicated to us that no safety issues and no indications of tissue hypoxia were detected upon review of the data by both FDA and a DSMB committee. In terms of efficacy readthrough, we think the FDA’s decision suggests voxelotor clinical data continues to be consistently encouraging and positive. Based on the highly reproducible Hb and hemolysis data we have seen so far, we have high conviction that these outcomes will continue to be seen in the full HOPE Pt A (and Pt B data).”

Ritu Baral has a very good TipRanks score with a 55% success rate and a high ranking of #37 out of 4,739 analysts. Baral yields 30.8% in her annual returns. When recommending GBT, Baral realizes 16.7% in average profits on the stock.

TipRanks indicates a Wall Street that strongly vouches for this biotech player, with all 8 analysts polled in the last 3 months rating a Buy on Global Blood Therapeutics stock. With a return potential of 37%, the stock’s consensus target price stands at $73.14.