The CSL Limited (ASX: CSL) share price has fallen in recent weeks. However, with the latest developments, is now the time to invest into CSL?
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The CSL Limited (ASX: CSL) share price has taken a hammering in recent weeks, falling as low as $242.00 at the start of this month. At the time of writing, CSL shares are trading for $260.57, up 0.15%. The global biotech has struggled to regain its limelight due to COVID-19 vaccine concerns as well as plasma collections.
However, with the vaccine’s latest developments, is now the time to invest into CSL shares?
The CSL share price has barely lifted off despite the positive news released on over the weekend.
According to reports, the Australian Therapeutic Goods Administration (TGA) advised it had approved local production of the COVID-19 AstraZeneca vaccine. This indeed has alleviated concerns caused from either the suspension or slow importation of the much-needed vaccines. Italy blocked the export of 250,000 AstraZeneca vaccine doses that were destined for Australia in early March.
The TGA green-light will see CSL manufacture up to 50 million doses of the AstraZeneca vaccine across two Melbournian sites. The first, located in Broadmeadows, will produce the active raw vaccine material. The second facility, situated in Parkville, will create the final vaccine doses along with vials filled and packaged for distribution.
Each batch is expected to be quality control tested, and approved by the TGA, CSL and AstraZeneca before being released.
CSL plans to manufacture around 1 million COVID-19 doses each week. So far, almost 300,00 people have been vaccinated in Australia.
The key downside risk for CSL remains its plasma collections — an essential raw material used to make life-saving therapies. Derived from people donating blood, plasma volumes are estimated to be around 20% down when compared against December 2019 levels.
CSL has previously noted that there is a lead time of several months between plasma collections and product sales. In addition, the cost per litre of plasma increased by up to 20% in the first-half of 2021.
To address the concerns, the company has moved to open an additional 12 clinics in the near-future. It hopes by expanding its presence, people will be more inclined to donate blood. Currently, CSL has a global network of more than 270 plasma collections centres throughout the United States, Europe, and China.
Furthermore, the company has also reached out to potential donors through targeted marketing initiatives. This includes social media influencers encouraging to give blood, as well as increased monetary incentives (up to US$700 each month).
CSL share price summary
The CSL share price has uncharacteristically been a poor performer in the past 12 months, falling 7%. The company’s shares reached a 52-week high of $332.68 last April on the back of a sharp market rebound.
While its shares are trading around what they were back in October 2019, investing for the long-term is a foolproof way to increase wealth. Blue-chip companies such as CSL have an outstanding track record to deliver strong returns over time.
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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.