The CSL Limited (ASX: CSL) share price is in focus today after the biotech giant made a mRNA vaccine announcement.
CSL is one of the biggest businesses in Australia, and it’s the biggest healthcare company. One of the main things that it does is develop and manufacture vaccines.
CSL’s mRNA vaccine deal
The ASX healthcare share has entered into a collaboration and license agreement with Arcturus Therapeutics to access their late stage self-amplifying mRNA vaccine platform technology.
Arcturus is currently development ‘next generation’ mRNA vaccines, including a COVID-19 vaccine candidate that recently reported results from a large phase III vaccine efficacy study, meeting its primary and secondary endpoints of prevention of infection and severe disease with a “favourable safety and tolerability profile.”
The CSL chief operating officer Paul McKenzie explained that its new partner has developed a platform to deliver late-stage clinical supplies at scale. This will help accelerate CSL’s journey in mRNA.
Steve Marlow, CSL Seqirus General Manager said:
Importantly, it is another step towards our long-term aim to advance public health by developing and commercialising enhanced vaccines for influenza and multi-pathogen pandemic preparedness. The collaboration also provides a pathway to offer a COVID-19 booster, providing another differentiated option to healthcare providers and governments around the world.
What does the deal entail?
CSL explained that it will have the exclusive licence to Arcturus’ mRNA technology in the fields of influenza, COVID-19 and other respiratory viral diseases, and a non-exclusive license in the ‘multi-pathogen pandemic preparedness field’ with the right to turn exclusive.
Arcturus will receive an upfront payment on US$200 million and will be eligible to receive further payments dependent upon the achievement of “certain development and commercial milestones along with royalties/profit sharing on future product sales.”
Final thoughts on the CSL share price
The company didn’t mark this as a price sensitive announcement, even though $200 million is quite a chunk of cash.
For the business to make an investment of this size, management must be confident that it will make a sizeable difference to its vaccine business.
I appreciate the competitive position that CSL has, and its commitment to investing in research and development, however the CSL share price hasn’t moved much in three years and I’m not sure what will drive it higher in the short-to-medium-term.
With the large size that it is, I think there are smaller ASX growth shares that can achieve stronger growth in the coming years.
