Novo Nordisk said to be in the hunt for Global Blood Therapeutics

GBT's shares jumped more than 20% on the buyout rumors

With pricing pressure mounting in the diabetes space, insulin specialist Novo Nordisk may be looking to wean itself off its core focus with a rumored buyout for Global Blood Therapeutics (GBT), a buy that could help boost its own blood disorder business.

This is according to sources “familiar with the matter,” who told Reuters the Danish drugmaker is looking to buy GBT, which only went public two years ago.

“Global Blood Therapeutics is now working with an investment bank to review its options, and there is no certainty that it will enter into negotiations with Novo Nordisk or that it will explore a sale, the people said this week,” Reuters said, citing sources that remain anonymous.

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One of its big hopes is centered on its sickle-cell disease drug, which last summer posted positive results in an early, small trial after beating out placebo.

This leading candidate, known as GBT440, is looking to become a once-daily, oral med for the inherited disease, and works by increasing hemoglobin’s affinity for oxygen.

The drug is also in midstage trials for idiopathic pulmonary fibrosis (IPF), a condition that causes scarring to the lungs, and again works by providing extra oxygen to the lungs to help offset hypoxia (a deficiency in the amount of oxygen reaching the tissues), which is believed to be a leading factor in IPF.

This would also dovetail with Novo’s work on blood disorders, such as hemophilia and its NovoSeven offering, but also offer new ways into different markets without needing to start from scratch.

The biotech’s shares predictably jumped on the rumors, ending the day up 21% with a market cap of $1.4 billion, and trading just over $34 a share.

This would also see a break with Novo’s typically deal-averse strategy, but comes amid new leadership in the form of Lars Fruergaard Jørgensen, and a contracting ROI for new diabetes medicines, notably in the U.S., as payers squeeze prices.

Last year, the diabetes major re-jigged its R&D, killing off an oral form of insulin, which has long been an unattainable dream for the industry.

It also refocused its pipeline to rely more upon in-licensing early stage projects and working with external academic collaborators. Substantively, the Danish pharma said it would shift more emphasis toward diabetes and obesity adjacent conditions such as nonalcoholic steatohepatitis (NASH), cardiovascular disease and chronic kidney disease.