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Why Is Global Blood (GBT) Down 5.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Global Blood Therapeutics (GBT - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Global Blood due for a breakout? 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 drivers.

Global Blood Reports Q2 Narrower Loss

Global Blood incurred a loss of 86 cents per share in second-quarter 2020, which was narrower than a loss of $1.01 in the year-ago quarter. The reported number was narrower than the Zacks Consensus Estimate of a loss of $1.18.

The company’s sales of $31.5 million, driven by sales of Oxbryta, beat the Zacks Consensus Estimate by of $19 million. The company did not generate product sales in the year-ago quarter.

Research and development expenses in the second quarter were $34.1 million, down from $36 million in the year-ago quarter, primarily attributable to a decrease in manufacturing costs for Oxbryta.

Selling, general and administrative expenses were $49.1 million, up from $24.8 million in the year-ago quarter. The increase in SG&A expenses for this comparative period was primarily attributable to higher employee-related costs, including non-cash stock compensation expenses, increased professional and consulting services associated with the build-out of the company’s commercial operations and the launch of Oxbryta.

Pipeline Update

Global Blood  announcedplans to expand the potential use of Oxbryta for the treatment of SCD in children as young as 4 years old. The company  plans to submit a new drug application, which will include a new age-appropriate formulation, to the FDA by mid-2021.

The company announced that it plans to submit a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for Oxbryta (voxelotor) tablets. The company is seeking approval of the drug to treat hemolyticanemia in sickle cell disease (SCD) patients aged 12 years and older. It plans to submit the MAA by mid-2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 33.8% due to these changes.

VGM Scores

Currently, Global Blood has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Global Blood has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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