CSL grabbed the headlines for the wrong reasons on Thursday as the stock plunged over 6% as further damage was inflicted on the ASX Healthcare Sector by GLP-1’s (diabetes drug), ResMed has already illustrated over recent weeks the market appetite for uncertainty around this “wonder drug”. The market favourite plunged to 4-year lows, over -30% below its 2020 high, with around 8% of CSL’s earnings in its Vifor business’s nephrology and dialysis (kidney disease treatment) potentially impacted by Novo Nordisks study, which many see changing the global obesity problem.
This biopharma also came under some fire from shareholders at their AGM on Wednesday around bonus structures, the first time we’ve seen this at a CSL AGM in many years. Shareholders have been used to strong growth and share price appreciation, as pressure is applied to both, tensions mount.
Clearly, there are now more question marks over the company’s future pathway of growth following the very large and expensive acquisition of Vifor. While this may prove a great move, they did not get it for a ‘song’, plus of course, growth gets harder the bigger you get and CSL is now a $115bn goliath.
- We see no need to catch this falling knife, especially as we own RMD in our Active Growth Portfolio, and it’s hurting!
MM is now neutral towards CSL
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