CSL Limited (ASX: CSL) shares are edging lower on Tuesday.
In morning trade, the biotherapeutics giant's shares are down 0.5% to $257.50.
What's weighing on its shares?
Today's weakness may be down to news that a competing treatment has delivered strong trial results.
Overnight, the Argenx SE (NASDAQ: ARGX) share price rocketed 28% on Wall Street after reporting positive topline data from the ADHERE study of Vyvgart Hytrulo in patients with chronic inflammatory demyelinating polyneuropathy (CIDP). Argenx said:
CIDP is a chronic, progressive autoimmune disease that can cause substantial disability in those affected, often leading to impaired ambulation or difficulty completing normal daily tasks without help. The positive ADHERE data show that VYVGART Hytrulo may represent a new patient-forward treatment option that can prevent symptom deterioration while minimizing side effects and treatment burden.
The ADHERE study is the largest clinical trial of CIDP patients to date, enrolling adults who were treatment naïve or currently on immunoglobulin therapy or corticosteroids.
Is this bad news for CSL shares?
This news could potentially be bad news for CSL and its shares due to the significant revenue it generates from its immunoglobulin therapies. In response to the trial, Goldman Sachs said:
ARGX has reported the top-line data from its ADHERE study, evaluating Vyvgart (first-in-class FcRn inhibitor) for safety and efficacy in the treatment of chronic immune demyelinating polyneuropathy (CIDP), the indication responsible for 25-35% of IG demand (IG is currently the most important protein derived from plasma fractionation, constituting 37% of CSL's FY23E revenue forecasts and 56% of growth FY23-26E).
Our Argenx analyst currently forecasts peak sales of $1,921mn/$1,248mn (unadjusted/risk-adjusted) in 2035 for Vyvgart in CIDP.
The good news is that the team at UBS don't believe that Vyvgart will have an overly large impact on CSL's revenue. It sees the worst-case scenario as a ~3% revenue hit. Though, even then, the broker feels that is unlikely.
As a result, it may be unnecessary to worry too much about this news. And with UBS retaining its buy rating and $340.00 price target, it could prove to be an opportune time to pick up CSL shares while they are cheap.
