Here's everything you need to know about CSL's latest acquisition

Will the latest acquisition by CSL Limited (ASX:CSL) be a future driver of growth? Here's everything you need to know about AMT-061…

| More on:
woman testing substance in laboratory dish, csl share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The CSL Limited (ASX: CSL) share price was a positive performer on Thursday despite the market selloff.

Investors were buying the biotherapeutics company's shares after it announced another new acquisition.

What is CSL acquiring?

CSL has signed an agreement with Nasdaq-listed gene therapy company, uniQure, to acquire the exclusive global license rights to commercialise an adenoassociated virus (AAV) gene therapy program, AMT-061 (etranacogene dezaparvovec).

AMT-061, which is currently in Phase 3 clinical trials, could be one of the first gene therapies to provide potentially long-term benefits to patients with haemophilia B.

One dose of AMT-061 has been shown to increase Factor IX (FIX) plasma levels to a degree that reduces or eliminates the tendency for bleeding for many years. FIX is the blood clotting protein lacking in people with haemophilia B.

This means that should AMT-061's trials be successful, appropriate candidate haemophilia B patients will be able to have a one-time treatment to restore FIX activity to functional levels which are capable of eliminating the need for frequent and ongoing replacement therapies.

While this therapy may ultimately cannibalise the sales of its Idelvion therapy for haemophilia B, purchasing it appears to be a smart move. This is because it should help defend CSL's leadership position in the market in the future.

What are analysts saying?

A note out of Goldman Sachs this morning reveals that its analysts remain very positive on CSL after this acquisition. They have reaffirmed their buy rating and $336.00 price target.

Commenting on the new acquisition, Goldman said: "CSL generates >$1bn revenues in haemophilia and, although the current standard of care for Heme B (Idelvion) has been a significant growth/value driver since launch in 2016, the market is becoming increasingly competitive."

"Furthermore, gene therapy has the potential to transform the treatment paradigm and, in EtranaDez [AMT-061], we believe CSL has acquired rights to the first-in-class and potentially best-in-class for this indication, which should serve to complement/expand the existing franchise and potentially extend its sustainability," it added.

However, the broker has warned that the deal may not be a foregone conclusion and notes that it will be subject to regulatory review in the US, UK and Australia. It points out that the review of Roche's acquisition of Spark (gene therapy) became a protracted process, eventually completing within 10 months.

Goldman commented: "In our view, that transaction has similarities to this, in that the company with the leading drug in Heme A (Roche, Hemlibra) sought to complement its portfolio with a promising gene therapy candidate targeting the same market. In this case CSL's Idelvion is the leading drug in Heme B, whilst uniQure is potentially both first and best-in-class with a gene therapy in this space."

What is the potential of AMT-061?

AMT-061 certainly could have a bright future ahead of it. According to Goldman's analysts, it currently ascribes an 85% probability of success for the AMT-061 program.

If successfully developed and commercialised, the broker is modelling US$932 million in global peak sales in 2027. This is based on a biologics license application submission in 2021, US launch in 2022, and an EU and Rest of the World launch in 2023.

As a comparison, Idelvion is expected to generate sales of US$460 million in FY 2020.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ ASX Shares

a woman wearing a close-sitting hat featuring wires and thick computer screen glasses clutches her computer monitor and looks shocked and disturbed as she reads old-fashioned computer text from the screen.
Technology Shares

Here's why ASX 200 tech shares (ASX:XTX) outperformed today

ASX tech shares have taken a turn for the better today.

Read more »

Worker in hard hat looks puzzled with one hand on chin
Resources Shares

Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021?

We look at what happened to this ASX 200 mining giant's shares last year

Read more »

a miner wearing a hard hat smiles as he stands in front of heavy earth moving equipment on a barren mine site.
Share Gainers

Here's why the Rumble Resources (ASX:RTR) share price is climbing 5%

The mineral explorer's share price is on the rise amid promising drill results.

Read more »

share price high, all time record, record share price, highest, price rise, increase, up,
⏸️ ASX Shares

Here are the top 10 ASX 200 shares on Wednesday

Here are your top 10 biggest gainers in the ASX 200 on Wednesday.

Read more »

comical investor reading documents and surrounded by calculators
⏸️ ASX Shares

The ASX reporting wrap-up: WiseTech, Bravura, Seven Group

Just what the investor ordered. Here’s a recap of the companies that reported on Wednesday...

Read more »

Doctor performing an ultrasound on pregnant woman
⏸️ ASX Shares

The ASX reporting wrap-up: Ansell, Kogan, Nanosonics

Just what the investor ordered. Here’s a recap of the companies that reported on Tuesday...

Read more »

blue arrows representing a rising share price ASX 200
⏸️ ASX Shares

Here are the top 10 ASX 200 shares on Tuesday

Here are your top 10 biggest gainers in the ASX 200 on Tuesday.

Read more »

unhappy investor considering computer screen
Share Market News

The ASX reporting wrap-up: Charter Hall, Ampol, NIB Holdings

Just what the investor ordered. Here’s a recap of the companies that reported on Monday...

Read more »