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.
