Upgrade CSL’s FVE to AUD 236 on Immunoglobulin Outlook; Risk From Emerging Therapies Not Priced In

CSL is well positioned in the plasma therapies industry and is benefiting from prior investments in plasma collection and fractionation capacity. However, approximately 50% of CSL Behring’s portfolio is at risk from emerging therapies in the next 20 years, which is why we award the company a narrow rather than wide moat rating. Within plasma, the physical scale and plasma expertise required to compete efficiently keeps entry barriers high, but the uptake of non-plasma-derived recombinant products and the emergence of gene and cell therapies introduce a number of new competitors. Recombinant products already dominate hemophilia treatment, and many companies, including CSL, have recombinants in clinical trials, which could affect the immunoglobulin, hemophilia, and specialty products portfolios. Gene therapy is a mid- to long-term risk to the plasma industry as it aims to cure some of the diseases currently being treated on an ongoing basis with plasma products. While CSL has invested in a gene therapy platform, its development pipeline lags other biotech companies, and its competitiveness is untested in this area.