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CSL Behring Scoops Up This U.S. Biotech for $416 Million



8/28/2017 5:57:50 AM

CSL Behring Scoops Up This U.S. Biotech for $416 Million
August 28, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Melbourne, Australia – CSL Limited is buying Tucson, Ariz.-based Calimmune for $91 million upfront and up to $325 million in performance-based milestones. Calimmune has research-and development facilities in Pasadena, Calif., and Sydney, New South Wales, Australia.


As part of the deal, CSL will pick up Calimmune’s preclinical product CAL-H, an hematopoietic stem cell (HSC) gene therapy to treat sickle cell disease and beta-thalassemia. It will also acquire two proprietary platform technologies, Select+ and Cytegrity. Select+ drives selection of genetically modified stem cells once they are infused back into patients, which decreases toxicity and improves efficacy. Cytegrity is a scalable manufacturing technology for the manufacture of lentiviral vectors, which are used to deliver the engineered genes.

“Calimmune shares in our promise and focus to improve the lives of patients with rare and serious medical conditions,” said Paul Perreault, CSL’s chief executive officer and managing director, in a statement. “The acquisition represents another important step in the execution of our strategy for sustainable growth. Calimmune’s scientific accomplishments are impressive.”

Sean O’Neill, writing for the Australian edition of The Motley Fool, notes, “CSL appears to be taking a promising long shot on Calimmune’s CAL-H gene therapy, which is preclinical (read: years from commercialization). CSL also acquires two products, Select+ and Cytegrity which are involved in the manufacturing and selection process of stem cell therapy. Both products are a natural fit for CSL’s focus on rare blood diseases.”
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It also appears to be a long-term investment, rather than a short-term gain for both companies. CSL indicates it expects to fork out the $325 million in milestones over the next eight years or so, depending on how the research goes. It’s unlikely to have a short-term effect on CSL’s bottom line or its stock price, although long-term is a different story.

O’Neill writes, “Reading between the lines, I’d say that CSL management thinks that Calimmune is potentially something quite special. CSL could acquire any of a thousand small biotechs worldwide, yet it has proven very selective in the past and avoided spending shareholder cash on long shots. Still, today’s announcement is not immediately relevant to CSL in my opinion, yet it strengthens the company’s research pipeline and reinforces my belief that the company is a great long-term investment.”

Once the deal closes, CSL Behring will take operational control of Calimmune. It is expected to close in the next two weeks. CSL indicates it expects the extra R&D expenses will be contained within its previously announced guidance—in other words, it will make up 10 to 11 percent of sales per year for the next couple years.

Sickle cell disease and beta-thalassemia are inherited blood disorders. They are chronic and diseases of unmet medical need. Sickle cell disease affects about 150,000 Americans and Europeans and beta-thalassemia affects about 16,000 of the same population. There are effective treatments for the diseases’ symptoms, there are no disease modifying treatments.

“We are excited to become part of CSL Behring,” said Louis Breton, Calimmune’s chief executive officer, in a statement. “They are an established global industry leader in protein-replacement therapies and have a proven track record of driving innovations through the development pipeline and delivering differentiated products to the global marketplace. Together, we are well positioned to take our achievements to the next level.”


Read at BioSpace.com


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