CSL (ASX: CSL) has announced a US$450 million acquisition to the market, AMT-061.
What is CSL?
CSL is Australia’s largest (and some might say best) healthcare company, specialising in biopharmaceuticals. Founded in the late 1900s as the Commonwealth Serum Laboratories, CSL was sold by the Australian Government to Australian investors via the share market in 1994 at $2.30 per share, at which time it doubled its size through an international acquisition. CSL also split its shares 1-for-3. Meaning, the first investors’ true price was closer to just $0.77 each.
What is CSL’s acquisition?
CSL announced it has agreed to acquire from uniQure exclusive global license rights to commercialise an adeno-associated virus (AAV) gene therapy program called AMT-061 (etranacogene dezaparvovec) for the treatment of haemophilia B.
The AMT-061 program, 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.
CSL says one dose of AMT-061 has shown to increase ‘Factor IX (FIX’ plasma levels, which is the blood clotting protein lacking in people with haemophilia B, to an amount that reduces or eliminates the tendency for bleeding for many years.
If AMT-061 is successful, patients would be able to have a one-time treatment to restore FIX activity to functional levels capable of eliminating the need for frequent and ongoing replacement therapies.
CSL CEO and Managing Director Paul Perreault
said: “Upon approval, we believe this next-generation therapy would be highly complementary to our existing haemophilia B product portfolio. We hope that it provides patients with an alternate best-in-class treatment option, building on our legacy of delivering lifesaving innovations in hematology.”
The acquisition details
CSL will pay an upfront cash payment of US$450 million, followed by regulatory and commercial sales milestone payments and royalties. UniQure will complete the Phase 3 trial and scale up manufacture for early commercial supply under an agreed plan with CSL.
Summary
CSL is a quality business and I’m sure management must be confident about this new treatment to outlay an initial US$450 million during these difficult COVID-19 times. Hopefully this is helpful for CSL’s earnings.
Considering the CSL share price is still down 14% from the pre-COVID high, I think it could be at a decent price for a long term buy.
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Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
