Global Blood Therapeutics' tough negotiating led Pfizer to boost its buyout offer 3 times, filing shows

Turns out, Pfizer didn’t proactively seek a Global Blood Therapeutics acquisition in the first place.

The first contact with GBT was made by another company, which on May 26 asked to buy out the sickle cell disease (SCD) specialist for $55 per share, a new securities filing shows. In the months that followed, GBT pitted that first comer and Pfizer against each other, managing to push Pfizer to sweeten its offer several times before shaking hands on the $68.50-per-share price in their $5.4 billion deal.

Here’s how the deal talks played out over the span of less than three months.

After the first company, so-called company A, made the $55-per-share offer, GBT CEO Ted Love and Chief Business and Strategy Officer Jung Choi on June 15 informed the first mover that the proposal was too low. But GBT, maker of SCD drug Oxbryta, figured it might as well invite more bidders to the negotiating table.

Among five other potential acquirers, only Pfizer and company B expressed interest in further discussions. GBT entered confidentiality agreements with those two firms on June 27 and 26, respectively.

A few days later, company A came back with a better, $60-per-share offer, which at that time represented a 101% premium to GBT’s prior closing price. While GBT struck down that sticker again, it allowed company A to conduct further due diligence to potentially improve its terms.

Pfizer officially joined the race July 11. Its first offer? Just $53 per share.

That price tag was obviously too low for GBT, but the company still granted Pfizer access to additional confidential information.

Just as Pfizer conducted its research in the following three weeks, company B came forward, first with a proposal to take over GBT for $50.50 apiece—which GBT immediately asked it to revise—and then for $58 per share.

The game got more interesting July 26, when Pfizer coincidentally matched the $60 offer from company A. But because GBT’s share price had increased, the tag at that time represented a smaller 79% premium to the biotech’s prior closing price.

At that point, GBT felt it was time to crank up the competition. On July 27, GBT told company A that it was talking with other potential buyers. Four days later, the biotech sent both Pfizer and company A a notice asking them to revise their deal terms and to submit a “best and final offer price” by Aug. 5.

On Aug. 3, Bloomberg published a report saying GBT had attracted takeover interest, pushing up the company’s stock price to as high as $48.50 per share the next day. At this point, company B had gone quiet and essentially dropped out of the race.

On the morning of Aug. 5, representatives of company A met virtually with Love and Choi to deliver its new $61.50-per-share offer and agreed to GBT’s proposed termination fee of 2.75% of transaction value. That company said it had secured all internal approvals necessary to execute the agreement.

That same morning, Pfizer CEO Albert Bourla, Ph.D., personally called Love “to discuss Pfizer’s commitment to SCD and to the community,” the securities filing shows.

“When Albert called me, the first thing he said was, ‘You guys have really been amazing in what you’ve done in such a short period of time,’” Love recently told Stat.

Pfizer followed that call with a revised $67.50 pitch. As with company A, Pfizer said it had secured all approvals and was prepared to execute the deal immediately.

Almost simultaneously, The Wall Street Journal reported that Pfizer was in advanced talks to acquire GBT for about $5 billion.

Armed with that WSJ article and still trying to sell at a higher price, Love contacted the CEO of company A, but the latter indicated that $65 was likely its highest price. Separately, Pfizer also reiterated the $67.50 sticker even as GBT told the Big Pharma company it had received a competing proposal that “was not that far apart in terms of value.”

Giving the bidding one last push, GBT later that day asked both Pfizer and company A to give their “best and final” offers. Pfizer took the bait, increasing its offer to $68.50, which represented a 102% premium to the biotech’s share price before speculation of an acquisition first surfaced. The two companies then further discussed specific deal items, including certain employee retention, compensation and benefits-related matters, and went public Aug. 8.

With the acquisition, Pfizer gains control of Oxbryta as well as late-stage SCD candidates GBT601 and inclacumab. In a note following the WSJ article, SVB Securities analysts said GBT’s SCD franchise could generated $2.7 billion annual sales by 2030, adding that a Pfizer acquisition could increase that number.