Why CSL Ltd Stock Could Be Worth a Look

Why CSL Ltd Stock Could Be Worth a Look

Approaching the final week of November CSL Ltd ADR (OTCMKTS: CSLLY) received some good news as the United States Food and Drug Administration approved CSL Behring’s new gene therapy drug, HEMEGENIX (etranacogene dezaparvovec-drib) for treating hemophilia B. This news continued the stock’s upward momentum. It has been a consistent trend for at least four years.

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Based in Australia, CSL Behring (AXS: CSL) is a segment of CSL Ltd, which trades under the ticker symbol OTCMKTS: CSLLY in the US market. CSL Plasma, CSL Seqirus and CSL Vifor are their other segments. They all deal with various aspects of biotechnology, health services, and technology.

CSLLY stock’s current value is sitting in a good place: breaking the $100-theshold and resting just below the all-time high ($117. 74 USD). Combined with a decent forward dividend yield of 1. 11% and projected earnings growth of more than 21%, there could easily be more to come from this company (and its interconnected segments).

November 2022 Was Good to CSL Behring

This late November development is just the latest advance in what has been a busy month for CSL Behring. For example, earlier in the month the company announced its collaboration (and licensing agreement) with Arcturus Therapeutics Holdings, Inc (NASDAQ: ARCT). This partnership would allow CSL to improve its capabilities for large-scale clinical supply delivery. These mRNA vacccines would eventually help treat common diseases like the flu and Covid-19.

The positive coverage of both the Arcturus collaboration and the HEMGENIX approval helped raise the price of CSL stock during November. Then, on November 23, CSL Limited share price broke through $300 (AUD) for the third time in all of 2022, closing out the month at $300. 11 AUD. This is 6. 92% from the month prior. It has since dropped a little, just below the threshold.

Similarly, CSLLY is up 14. 62% over the last 30 days; and up 1. 21% over the last 90 days.

A High Price With High Potential

The FDA approval comes amidst successful results in the ongoing HOPE-B trial, which happens to be the largest hemophilia-B gene therapy trial to date. Results have shown marked improvements over other study criteria, which clearly qualifies HEMGENIX to be a more attractive treatment option. Effectively, the study found that roughly 94% of patients treated with HEMGENIX discontinued use of their traditional prophylactics.

The price for this new drug is $3.5 million USD per dose, making it the most expensive drug in history. Of course, HEMGENIX is not alone in the upper ranges of drug cost. Take Novartis (NYSE: NVS), for example; their infant spinal muscular atrophy drug Zolgensma sold for $2.1 million USD a dose, upon its approval in 2019. And Bluebird Bio, Inc’s (NASDAQ: BLUE) beta thalassemia (blood disorder) treatment Zynteglo was listed at $2.8 million USD only a few months ago.

Of course, this news about HEMGENIX is typically the sort of thing that motivates investors. First of all, an independent nonprofit research organization, the Institute for Clinical and Economic Review (ICER), has determined that a fair price for HEMGENIX should be around $2. 95 million USD. They determine this cost-effectiveness analysis by weighing the drug’s health benefits against offset costs. This results in a drug that is more expensive, which means more profit.

In addition, a treatment upgrade means the product will be more attractive to patients, even at a higher price point. Patients with sensitive skin may also find it easier to access the product if they are able to reduce many of the obstacles that other treatments present.

Stable Growth Could Make CSLLY Investment Worthy

All this in mind, CSLLY could be a moderate BUY, at least for now. While it is still stabilizing from the recent news, analysts expect at least 10% business growth in the future. And with a 52-week high of $312. 92 AUD, CSL could be on its way to a record high in no time. CSLLY currently pays a $1 annual dividend. 08 per share and has a dividend yield of around 1.1%, which greatly exceeds the 0.1% industry average. This industry includes biotechnology, pharmaceuticals and life sciences.

On the other hand, CSL has a Price-to-Earnings ratio (P/E) of 42. 98, which is nearly double that of the industry average. Analysts fear that the stock will not grow as fast as they hope. Also, its 10.2 Price-to-Sale ratio (P/S) exceeds the industry average of 4.4. This could indicate that CSL is spending more than it should.

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