CSL Ltd and US-based Momenta Pharmaceuticals recently entered an exclusive research collaboration and worldwide license agreement to develop and commercialise recombinant therapies for the treatment of autoimmune diseases, many of which are currently treated with immunoglobulin.
Ord Minnett views the US$50 million upfront payment by CSL as an option over the development of a therapy which, while potentially opening up large new markets, would also compete with CSL’s plasma-derived immuinoglobulin therapies.
Autoimmune conditions account for a large portion of current immunoglobulin usage. According to data presented by Spanish blood-plasma product maker Grifols in 2015, 50–70% of immunoglobulin by volume is prescribed to patients with autoimmune conditions, most notably chronic inflammatory demyelinating polyneuropathy (CIDP).
Momenta's autoimmune focus overlaps with CSL’s areas of expertise. Momenta has developed Fc multimer proteins, including its M230 product, a selective immunomodulator of Fc receptors (an Fc receptor is a protein that contributes to the protective functions of the immune system). Pre-clinical studies with M230 have shown enhanced potency and efficacy over intravenous immunoglobulin in animal models of autoimmune disease. CSL has also undertaken research work on Fc receptors and has a proven ability to bring recombinant therapies to market. In addition to advancing M230, the parties intend to collaborate on the development of additional Fc multimer proteins.
The flexible deal structure gives Momenta control over its level of investment. In addition to the initial US$50 million license fee, CSL could pay up to US$550 million in future payments contingent upon clinical, regulatory, and commercialisation milestones.
Momenta has the option to fund 30% or 50% of the development and commercialisation costs in exchange for a share of US profits. CSL would retain full rights to sales outside the US. Notably, Momenta reported it has spent less than US$50 million developing M230.
The impact on our earnings forecasts is minimal at this stage as the commercialisation process is expected to take at least four years.
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