The CSL Limited (ASX:CSL) share price has been falling in 2021. Let’s look at whether vaccine concerns are adding to the biotech’s woes.
The post Are COVID-19 vaccine worries affecting the CSL (ASX:CSL) share price? appeared first on The Motley Fool Australia. –
Investors may be anxious that the CSL Limited (ASX: CSL) share price could fall further on current COVID-19 vaccine worries. This comes as several European countries recently suspended the use of the Oxford-AstraZeneca vaccine after receiving reports of individuals developing blood clots.
Below we take a look at whether concerns over the vaccine could be impacting the CSL share price.
Is the COVID-19 vaccine safe?
According to AstraZeneca, around 17 million people have been vaccinated with its product across Europe and the United Kingdom. While some mild side effects are expected such as tiredness and aching muscles, a reported 37 people formed blood clots. In addition, there were 15 cases of deep vein thrombosis, and 22 cases of pulmonary embolism.
Overall, the Oxford-AstraZeneca vaccine has proved relatively safe when comparing these cases against the overall larger group. However, a number of European countries such as Germany, France, Italy, Sweden, Spain and others have paused administering the vaccine.
These nations called for an assessment from the European Medicines Agency (EMA) to see if there was a link between the vaccine and the reported side effects. So far, the EMA has found no evidence and looks set to recommend the continued rollout of the Oxford-AstraZeneca vaccine.
At home, Australia is pushing ahead to distribute its current stockpile of COVID-19 vaccines. The government has secured an order of 3.8 million doses which is set to be fulfilled in early 2021, with over 226,000 doses having already been administered. The other 50 million doses will be manufactured in Melbourne by CSL on behalf of AstraZeneca.
How important is this to CSL?
Interestingly, analysts have stated that CSL’s vaccine deal won’t deliver any meaningful earnings for the company when compared to other biotech companies. This is because CSL’s exposure to vaccines is considered quite low against its other performing business units. In its FY21 half-year results, CSL’s pandemic business contributed just $77 million in revenue to the group’s entire $5,739 million.
Furthermore, the company noted that the production of 50 million doses will not have any significant material impact on future revenue.
CSL shares have been hammered since late 2020 due to weak investor confidence. But nonetheless, the business still continues to grow at an impressive rate, up 15% on revenue from H1 FY20 to H1 FY21. As such, it seems market fear is the primary force continuing to weigh down its shares.
CSL share price performance
Over the past 12 months, the CSL share price is down around 5%, and almost 10% year to date. The company’s shares reached a 52-week high of $332.68 last April before hitting a recent low of $242.00 this month.
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Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.