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Novo Nordisk (NVO) to Tap Into SCD Space With Forma Acquisition

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Novo Nordisk A/S (NVO - Free Report) announced a definitive agreement to acquire Massachusetts-based biopharmaceutical company, Forma Therapeutics Holdings, Inc. for a total equity value of approximately $1.1 billion. The transaction is expected to close later in the fourth quarter of 2022.

Per the agreement, Novo Nordisk will begin a tender offer to acquire all outstanding shares of Forma Therapeutics’ common stock for $20.00 per share in cash.

With this acquisition of Forma Therapeutics, which also includes its lead development candidate, etavopivat, Novo Nordisk is looking to venture into the field of sickle cell disease (SCD) and other rare blood disorders.

The acquisition looks like a great strategic fit for Novo Nordisk’s strategy to expand its presence and pipeline in haemoglobinopathies while addressing the complications and underlying causes of SCD, a debilitating and life-threatening disease.

We note that Forma Therapeutics’ stock was up 51.04% on Thursday following the announcement of the above-mentioned news.

Shares of Novo Nordisk have declined 6.7% this year compared with the industry’s decrease of 4.6%.

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Etavopivat, an investigational pyruvate kinase-R (PKR) activator, is currently being evaluated in the phase II/III Hibiscus study for treating patients with SCD. The candidate is also being investigated in the phase II Gladiolus study for patients with transfusion-dependent SCD and thalassemia, an inherited haemoglobinopathy.

The FDA has granted Fast Track, Rare Pediatric Disease and Orphan Drug designations to etavopivat for the treatment of SCD.

Investors must note that several big healthcare companies have ramped up their acquisition strategy to foray into the SCD and rare blood disorder space of late.

Last month, pharma giant Pfizer Inc. (PFE - Free Report) entered into a definitive agreement to acquire Global Blood Therapeutics, Inc. for approximately $5.4 billion. The transaction is subject to customary closing conditions.

The acquisition is likely to boost Pfizer’s strong portfolio of drug candidates for various diseases and enhance the company’s presence in rare hematology. The board of Directors of both GBT and PFE have approved the transaction.

GBT’s sole marketed drug, Oxbryta (voxelotor), is approved in the United States for the treatment of SCD. The drug is approved by the FDA as an oral, once-daily treatment for SCD in patients aged 12 years or above.

Oxbryta is also approved in the European Union and several other countries.

Global Blood is also developing its next-generation sickle hemoglobin (HbS) polymerization inhibitor, GBT601, in mid-stage studies for treating patients with SCD.

Zacks Rank

Novo Nordisk currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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