CSL Limited (ASX: CSL) shares have come back into investors' view over the last week. This has been in response to the company releasing its first-half results to the market on Wednesday.
Investors have now had some time to digest the announcement which included a 2.8% reduction in net earnings. In turn, the CSL share price has settled roughly in line with where it finished after handing down its results.
The Australian biotechnology company has missed out completely on any kind of COVID-19 vaccine boost. Meanwhile, pharmaceutical giants such as Pfizer Inc (NYSE: PFE) snagged a winner.
The US-based vaccine maker said it generated US$13 billion in COVID-19 vaccine revenue. In addition, Pfizer expects to reach US$36 billion in revenue from its vaccine for the full 2021 calendar year. To put that into perspective, CSL booked US$10.61 billion in revenue for 2021 across all its segments.
Despite this, CSL's CEO is not getting hung up on the missed opportunity. Let's take a look at why.
Focusing on the flu
After canning its efforts to develop its own COVID-19 vaccine in partnership with the University of Queensland, CSL has fallen back on its key expertise — developing influenza vaccines.
In the first half, CSL's influenza vaccine division — Sequirus — notched up a record volume of roughly 110 million doses distributed. The achievement also translated into financial performance as Seqirus' revenue increased 17% to US$1.685 billion.
To move away from its majority weighting towards egg-based flu vaccines, CSL is expanding upon its cell-based manufacturing capability. This involves an $800 million cell culture facility in Tullamarine set for completion in 2023.
Cell-based vaccines are made without the need for growing a flu virus inside of an egg. Essentially, this removes the need to worry about egg supply. Additionally, some studies suggest cell-based vaccines may offer better protection compared to egg-based.
Another consideration for CSL shares is the company's push for its own mRNA development. However, CSL is tackling what is being heralded as the next evolution of mRNA vaccines — self-amplifying messenger RNA (sa-mRNA).
However, ASX-listed CSL lost a bid against Moderna Inc (NASDAQ: MRNA) to build a specialised research facility in Australia for mRNA technology.
Talking about this, CSL CEO Paul Perreault said:
Australia doesn't want us as part of that, OK. In the US we have a new contract with BARDA that includes Self Amplifying Messenger RNA (sa-mRNA). In the UK we have very strong relationships and they're interested and when we look at Europe there's interest there as well. So I'm not fussed from that perspective.
Analysts' take on CSL shares
Following the company's half-year results, analysts have gone back to the drawing board to work out what CSL shares could be worth going forward.
The team at Morgans has concluded the biotechnology giant is worth a price target of $327.60. This would suggest a 24% upside from the current CSL share price. Improvement in plasma collections was a pleasing sight to the analyst team.
