Last week was a reasonably disappointing one for the CSL Limited (ASX: CSL) share price.
Despite releasing its research and development (R&D) update for 2021, the biotherapeutics company’s shares ended the period with a weekly decline of 0.5%.
What was the reaction to the R&D update?
The team at Goldman Sachs looked through the update and have given their verdict.
According to the note, one of the products under development that the broker is most positive on is CSL112. This is a potential treatment for early recurrent cardiovascular events following an acute myocardial infarction.
Goldman commented: “Across the pipeline, we believe CSL112 represents the most material opportunity, and remains the primary focus amongst the investor base.”
It notes that CSL112’s final phase three interim analysis is now targeted before July 2022 instead of September/October 2022.
Goldman also spoke positively about its EtranaDez product candidate.
It said: “EtranaDez offers potential for functional cure in hemophilia B. In May-2021, CSL acquired global rights from UniQure to EtranaDez, a first-in-class and potentially best-in-class gene therapy targeting hemophilia B.”
The broker has previously spoken about how this product could be a significant contributor to revenue in the future if all goes to plan.
Is the CSL share price good value?
Goldman concluded: “Based on today’s update, we update our pipeline valuation framework, primarily reflecting: 1) the incorporation of EtranaDez for the first time (leading heme B gene therapy); 2) a modest increase in PoS for CSL112 (from 10% to 15%), reflective of successful navigation of second futility analysis.”
“However, we also factor several clinical delays across the pipeline (largely reflective of challenges associated with Covid-19). Incorporating these changes, we upgrade our risk-adjusted pipeline valuation to A$57/share, from A$44 (non risk-adjusted: A$205, from A$200).”
This ultimately led to the broker retaining its neutral rating but lifting its price target on the CSL share price to $305.00.
Based on the current CSL share price of $295.86, this suggests there is just modest upside of 3.1% for investors at present.