Blood product and vaccine manufacturer CSL Limited (ASX: CSL) this morning announced that it has agreed to acquire US biotechnology Calimmune for the sum of $91 million.
Calimmune is researching stem cell gene therapy for sickle cell disease and thalassemia, inherited blood diseases which affect haemoglobin, the oxygen-carrying protein in red blood cells. Modern medicine currently only treats the symptons of these diseases and can't cure them.
What CSL gets out of it
CSL appears to be taking a promising long shot on Calimmune's CAL-H gene therapy, which is pre-clinical (read: years from commercialisation). CSL also acquires two products, Select+ and Cytegrity which are involved in the manufacturing and selection processes of stem cell therapy. Both products are a natural fit for CSL's focus on rare blood diseases.
The $91 million cost is not immediately material to CSL, although the company could have to fork out over a potential $325 million to the Calimmune sellers over the next 8 years, depending on the progress of the research.
Reading between the lines, I'd say that CSL management thinks that Calimmune is potentially something quite special. CSL could acquire any of a thousand small biotechs worldwide, yet it has proven very selective in the past and avoided spending shareholder cash on long shots.
Still, today's announcement is not immediately relevant to CSL in my opinion, yet it strengthens the company's research pipeline and reinforces my belief that the company is a great long-term investment.
