Pfizer Inc. agreed on Monday to pay $5.4 billion in cash for Global Blood Therapeutics, a maker of sickle cell drugs, as it seeks to cash in on increased revenue from its COVID-19 vaccine and treatment.
Pfizer will pay $68.50 per GBT share, representing a 7.3% premium to Friday’s closing price.
The deal carries a more than 40% premium to GBT’s listing before the Wall Street Journal reported that Pfizer was in advanced talks to buy it on Thursday.
Pfizer’s revenue in 2021, at $81.3 billion, was almost double the previous year’s mark, due to sales of the coronavirus vaccine.
With the addition of its antiviral pill for COVID-19, Paxlovid, Pfizer is expected to generate around $100 billion in revenue this year, but sales of both products are expected to decline in the future.
Pfizer has been looking for acquisitions that could bring in billions in annual sales by the end of the decade.
“We have deliberately adopted a diversification strategy in our mergers and acquisitions operations,” Aamir Malik, Pfizer’s chief deal maker, said in an interview. “We believe there are opportunities in all therapeutic areas in which we are active.”
In May, Pfizer closed an $11.6 billion deal for migraine drug maker Biohaven Pharmaceutical Holding and also recently completed a $6.7 billion deal to buy Arena Pharmaceuticals.
With the acquisition of Global Blood Therapeutics, Pfizer adds the sickle cell disease treatment Oxbryta, which was approved in 2019 and is expected to exceed $260 million in sales this year. It will also acquire two active ingredients in the development phase -GBT601 and inlacumab- aimed at the same disease.
Pfizer said that if all are approved, it believes GBT’s drugs could generate more than $3 billion in annual sales at their peak.
Shares of Global Blood rose 4.5% after the announcement of the deal.
Samuel Edwards is the name you must have heard many times while reading reports related to Finance, that’s what he is good at. From Major Investments to Stock Market Updates, he got ’em all. Be ready to blow your mind by the mind-blowing reports of Finance World from Samuel Edwards.