Why this could be a ‘powerful driver of sector dominance’ for CSL shares: Wilsons

A scientist in a white coat and glasses puts her arms in the air in a sign of strength and success.A scientist in a white coat and glasses puts her arms in the air in a sign of strength and success.

The CSL Limited (ASX: CSL) share price is holding above the $300 mark today, up 0.77% to $301.33 at lunchtime. Meantime the S&P/ASX 200 Index (ASX: XJO) is also in the green by 0.19%.

It’s been an exciting couple of days for the ASX healthcare share. CSL’s unique haemophilia B treatment, called Hemgenix, has just received approval from the United States Food and Drug Administration.

CSL CEO Paul Perreault describes the decision as a “historic approval”. This is because Hemgenix is the first and only one-time gene therapy to become available for adults with haemophilia B.

A commercial launch is expected in FY24.

What does this mean for the CSL share price?

According to The Australian, Wilsons analyst Shane Storey says Hemgenix is a “powerful driver of sector dominance” for CSL.

Storey said:

Hemgenix will open up the haemophilia B market to a younger cohort of patients that exhibit suboptimal adherence to prophylactic therapy due to the onerous nature of delivery.

The potential to replace ≥10 years of regular prophylactic management for these patients with a single shot of Hemgenix is a powerful driver of sector dominance, which brings with it margin expansion and sales leverage opportunities within the CSL Behring recombinant haemophilia (rHaem) portfolio.

CSL is already a market leader in haemophilia treatments. It has a drug called Idelvion, which extends the half-life of factor IX infusions, meaning patients need less frequent treatment (every 14 days).

Wilsons is tipping a 12-month share price target of $327 for CSL shares and has an overweight rating.

As my colleague James reported today, Citi has reaffirmed its buy rating and share price target of $340.

Macquarie is retaining its outperform rating but has lifted its price target by 4.1% to $343.

How does Hemgenix work?

Haemophilia is a blood disorder caused by a genetic defect that stops the body from creating its own coagulating factors.

Haemophilia A means low factor VIII and haemophilia B means low factor IX.

The factors are proteins that help the blood coagulate. Without them, the blood gets too thin and this can lead to bleeding.

One of the most common treatments to date is regular factor infusions. Even then, patients can still experience spontaneous bleeds, leading to problems like joint damage and strong pain.

Hemgenix can stop spontaneous bleeds in haemophilia B patients by prompting the body to produce its own factor IX.

The Australian quotes Kim Phelan, chief operating officer of The Coalition for Haemophilia B, who said gene therapy offered “the possibility of freedom from the need for regular, ongoing infusions”.

The European Medicines Agency is also reviewing Hemgenix for approval.

CSL shares snapshot

CSL shares crossed the $300 mark this week for only the third time in 2022.

Prior to COVID-19, the CSL share price was trading up around $340 before the market crash.

Since then, it has risen above $300 several times but hasn’t been able to stay there.

The post Why this could be a ‘powerful driver of sector dominance’ for CSL shares: Wilsons appeared first on The Motley Fool Australia.

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More reading

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in CSL Ltd. and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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