Why is the CSL share price edging higher?

Posted: 24 November 2021 1:05 pm
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Shares in biotech giant CSL are up 7% in the past month alone.

Shares in CSL (ASX: CSL) are among the list of most traded stocks on the ASX on Wednesday, building on the recent momentum that has seen the already expensive stock gain over 7% in the past month. The stock was up more than 1% to $319.78 in early trading.

What is bolstering the CSL stock price?

The biotech giant’s shares have likely lifted on Wednesday after its influenza vaccine business, Seqirus, overnight announced it had received approval from the the US Food and Drug Administration (FDA) for the Audenz vaccine.

Audenz is the first-ever adjuvanted, cell-based influenza vaccine to help protect individuals 6 months and older against influenza A(H5N1) in the event of a pandemic and is available in multi-dose vial (MDV) form.

It was originally approved by the FDA in 2020 in a single dose, pre-filled syringe (PFS) presentation.

Airborne respiratory diseases such as influenza have been a focus of public health systems worldwide since the COVID-19 pandemic spread in March 2020 and the fresh approval is expected to bolster Seqirus’ product line.

Under the terms of its public-private partnership with the US Department of Health and Human Services (HHS), Seqirus can deliver 150 million influenza vaccine doses to the US government to support an influenza pandemic response within 6 months.

Improving outlook

Meanwhile, CSL is also stepping up its investment in research and development, after launching an incubator program at its new Melbourne headquarters that is designed to commercialise Australian ideas and keep research onshore.

The vaccine maker has inked a deal with the University of Melbourne and the Walter and Eliza Hall Institute to launch the $95 million incubator project, with support from the Victorian government’s Breakthrough Victoria Fund. It will have space for 40 Australian companies looking to move early stage research towards commercialisation.

Analysts also expect a revival for CSL’s major blood products business as centres reopen following the vaccine rollout advancing across the world. Plasma products are the key revenue driver for CSL, with the Behring business generating over US$8 billion in revenue.

Brokers at Macquarie Group last week upgraded CSL shares to "outperform" from "neutral", lifting their price target to $338 a share after noting that easing disruptions in the key US plasma collection market would help CSL.

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