It has been about a month since the last earnings report for Global Blood Therapeutics (GBT). Shares have added about 2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Global Blood due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Global Blood Reports Narrower-Than-Expected Loss in Q1
Global Blood incurred a loss of 87 cents in the first quarter of 2019, which was in line with the loss incurred in the year-ago quarter but narrower than the Zacks Consensus Estimate of a loss of 94 cents.
Research and development (R&D) expenses in the first quarter were $34.5 million, up 17.8% year over year. The increase in R&D expenses was mainly due to increased employee-related costs, including non-cash stock compensation, and increased consulting spend associated with NDA filing activities..
G&A expenses in the first quarter were $18.1 million, up 41.4% year over year. The increase in expenses was due to higher employee-related costs, including non-cash stock compensation, and increased expenditure associated with the buildout of the company’s commercial infrastructure.
Global Blood expects net loss to increase during 2019, as it will increase its manufacturing efforts for voxelotor, conduct additional clinical studies for the same in sickle cell disease (SCD) and continue the ongoing SCD studies. The company also expects to witness an increase in general and administrative (G&A) spending, as it looks to build commercial infrastructure and prepare for the potential commercial launch of voxelotor.
Global Blood completed the pre-NDA meeting with the FDA. The company announced that the agency approved a rolling submission of voxelotor for the potential treatment of SCD. The company expects to submit an NDA in the second half of 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 8.9% due to these changes.
At this time, Global Blood has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Global Blood has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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