The last week of November is approaching CSL Ltd ADR (OTCMKTS: CSLLY) got some good news when the US Food and Drug Administration approved CSL Behring’s new gene therapy drug, HEMEGENIX (etranacogene dezaparvovec-drib) for the treatment of hemophilia B. The news helped continue the stock’s upward momentum, a trajectory that has been largely consistent over the past four years.
Based in Australia, CSL Behring (AXS: CSL) is a segment of CSL Ltd, which trades under the ticker symbol OTCMKTS: CSLLY on the US market. Their other segments include CSL Plasma, CSL Seqirus, and CSL Vifor; all of which relate to different aspects of biotechnology and health services.
The current value of CSLLY stock is in a sweet spot, breaking the $100 theshold and resting just below its all-time high ($117.74 USD). Combined with a solid attacker dividend yield of 1.11% and expected profit growth of more than 21%more could easily come out of this company (and its interconnected segments).
November 2022 was good for CSL Behring
This late-November development is just the latest progress in a busy month for CSL Behring. The company announced this earlier this month collaboration (and license agreement) with Arcturus Therapeutics Holdings, Inc (NASDAQ: ARCT). This partnership would develop and enhance capabilities for large-scale delivery of clinical supplies; specifically enabling CSL to market mRNA vaccines more efficiently and effectively. These mRNA vaccines would eventually help treat common illnesses such as the flu and Covid-19.
The positive news coverage of both the Arcturus collaboration and the HEMGENIX clearance helped drive the price of CSL shares in November. Then, on November 23, CSL Limited’s share price broke through $300 (AUD) for the third time in all of 2022, closing the month at $300.11 AUD. That is 6.92% more than the previous month. It has since settled down a bit again, just south of that threshold.
Likewise is CSLLY +14.62% up over the last 30 days; and +1.21% over the last 90 days.
A high price with a high potential
The FDA approval comes amid successful results in the ongoing HOPE-B trial, which is the largest hemophilia B gene therapy trial to date. So far, the results show a clear improvement against several study criteria that certainly qualify HEMGENIX as a more attractive treatment option. In fact, the study found that about 94% of patients treated with HEMGENIX stopped taking their traditional prophylactics.
The price for this new drug is $3.5 million USD per dose, making it the most expensive drug in history. Naturally, HEMGENIX is not alone in the higher price range of medicines. Take Novartis (NYSE: NVS), for example; their infant spinal muscular atrophy drug, Zolgensma, sold for $2.1 million USD per dose after approval in 2019. And Bluebird Bio, Inc’s (NASDAQ: BLUE) beta thalassemia (blood disorder) treatment Zynteglo was listed for $2.8 million USD just a few months ago.
Of course, this news about HEMGENIX is typically something that motivates investors. First of all, an independent, not-for-profit research organization, the Institute for Clinical and Economic Review (ICER), determined that a fair price for HEMGENIX should be approximately $2.95 million USD. They determine this cost-effectiveness analysis by weighing the health benefits of the drug against the compensation costs. This gives the drug a decent premium, and that means more profit.
In addition, an upgrade of the treatment means that the product becomes more attractive to patients, even at a higher price. Reducing many of the obstacles that come with other treatments can also make it more accessible for patients with certain sensitivities.
Stable growth can make CSLLY worth investing
Keeping all this in mind, CSLLY could be a moderate BUY, at least for now. While it is still stabilizing due to the recent news, analysts expect business growth of at least 10% going forward. And with a 52-week high of $312.92 AUD, CSL could be on its way to an all-time high in no time. CSLLY currently pays an annual dividend of $1.08 per share and has a dividend yield of approximately 1.1%, which is much higher than the industry average of 0.1%. This industry category includes biotechnology, pharmaceuticals and life sciences.
On the other hand, CSL has a Price-earnings ratio (P/E) of 42.98, which is almost double the industry average. This means the stock may not grow as fast as analysts hope. Also be 10.2 Price-Sales Ratio (P/S) exceeds the industry average of 4.4. This could mean that CSL is probably spending more than it would like.