Stock Watch: CSL Takes Knocks Punching Above Its Weight

29 Aug 2023

• By Andy Smith

CSL’s evolution from plasma fractioneer to biotech has reached the extent of an approved gene therapy just as gene therapy commercialization faces challenges. Meanwhile, in the post-pandemic inflationary environment, CSL’s margins in its biggest blood products division are impacted by increased donor fees and higher labor costs.

Stock Watch Image, Andy Smith — ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

When I used to manage a biotech fund, one of my holdings was the Australian company CSL Limited. This was for a number of reasons only partially related to CSL’s main business – plasma fractionation and the extraction and sale of products derived from it. Another reason was that a holding in CSL offered currency diversification when most biotech portfolios were (and still are) heavily weighted to the US dollar and long-only funds do not usually hedge currencies. There was also the intriguing potential for intravenous immunoglobulin (IVIG) – pooled polyclonal antibodies from healthy donors – to treat Alzheimer’s disease (AD). However, when competitor Baxter International Inc.’s 390-patient study found no efficacy for its IVIG product Gammagard (human immune globulin infusion) in Alzheimer’s in 2013, a component of CSL’s investment proposition fell away. This ironically preceded a similar failure of CSL’s hyperimmune therapy for COVID-19 eight years later. (Also see "Baxter’s Failed IVIG For Alzheimer’s May Work In Subpopulations" - Pink Sheet, 22 May, 2013.)

One of my frustrations in holding CSL was that it did not report quarterly financial results and when it reported...