New CSL gene therapy could trigger a stock rerating – The Australian Financial Review

CSL bought the rights to EtranaDez off Netherlands company uniQure this year for $US450 million.

Its current haemophilia B treatment, Idelvion, has a 30 per cent market share, but Dr Storey believes that if EntranaDez is successful, this would rise to at least 40 per cent.

The upside to the CSL Behring division's earnings before interest, tax, depreciation and amortisation would be about 4 per cent, and potentially 6 per cent if it also acts as a defence to Idelvion against non-factor therapies being developed by competitors. Non-factor therapies have already disrupted the haemophilia A market.

Dr Storey said CSL's haemophilia business was an often "overlooked driver of margins".

Based on consultations with experts in the industry, he and co-author Melissa Benson set a success target of 20 per cent factor IX activity. Haemophilia B patients are deficient in factor IX, the protein that allows blood to clot. Most people have more than 50 per cent factor IX in their blood.

He said that if this level of activity was achieved, it would be a "knock-out" result, which would lead to meaningful clinical adoption.

The EtranaDez trial is likely to be a focal point of CSL's R&D day next Tuesday and clinical trial results are expected this month.

The gene therapy would be a one-shot option for haemophilia B patients and the duration that it would be effective for is unknown. However, the report by Wilsons suggested it would need a minimum durability of three to five years, but should ideally target an eight to 10-year timeframe, which would make reimbursement justification easier.

"Haematologists are hopeful it could last over 10 years," Dr Storey said. "You've only got one shot on goal with a gene therapy like this and it'll be a $US2-3 million shot so don't drop it."

If the drug was successful, Dr Storey said it could galvanise CSL's investment into gene therapy and spur more acquisitions by it in the emerging field.

He said there was no doubt CSL would invest more in gene therapy. "You're seeing so much competition on so many aspects of their business, they inevitably have to participate more and more in that.

"[In terms of acquisitions] it's more likely to be of the sorts developing alternatives to intravenous immunoglobulin.

"They need things that are fairly close to market. Looking at its R&D pipeline, the next big thing is CSL 112, which is still some years away, so they do have a gap in the pipeline."

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New CSL gene therapy could trigger a stock rerating - The Australian Financial Review