CSL’s heart medicine misses a beat

Hey Superheroes,

Despite higher-than-expected U.S. inflation data causing some market volatility earlier this week, it looks like markets have continued to push through. The S&P 500 closed at another new high overnight! 

Here are your stories this week.

CSL continues on with trials for heart attack drug

This week was a big week for CSL. 

Australia’s largest healthcare company saw its shares shed over 8% from peak to trough in the last few days. 

That’s a massive price loss of almost $25 per share, which came after it announced that its developmental drug, CSL112, isn’t quite ready for regulatory approvals. Although it did claw back some of its losses with a tidy earnings report and an increased dividend.

❤️‍🩹 What is CSL112?

So what exactly is CSL112 to be able to wipe billions from CSL’s market value in a single day?

According to its reports, CSL112 could reduce “major adverse cardiovascular events” (i.e. another heart attack) at 90 days after a heart attack happens for the first time. 

Second heart attacks often account for a large share of cardiovascular-related deaths and thus CSL’s head of R&D last November said that CSL112 is one of its top three potential “blockbuster drugs” in terms of revenue and earnings potential once it’s developed.

CSL commenced its phase 3 trials of the CSL112 six years ago… it was originally estimated to complete within four years. So far, CSL has not given any further indications on when CSL112 is expected to be ready for approvals.

💵 CSL produces earnings growth

CSL released half-year earnings the next day which showed a 20% growth in net profit year-on-year. It also increased its dividend by 12% to US$1.19 or about A$1.83 per share –  equivalent to about a 1.30% annualised dividend yield based on yesterday’s closing price.

Additionally CSL does not expect the CSL112 trial to make any material impact on its financials. Well… aside from the fact that CSL112 sales, which are estimated to bring revenue of about US$15,000 per patient, will have to wait a bit longer.

🔦  Some other things we’re shining the Spotlight on:

• LYFT’S TERRIBLE TYPO: Lyft saw its share price jump 67% in the afterhours market after posting that margins were set to grow by 500 basis points… except, it was a typo with an extra “0” and margins were only expected to grow by 50 basis points. This was quickly corrected however Lyft’s share price is still up by around 50% for the week.

• AIRBNB SEE-SAWS: Airbnb reported mixed quarterly earnings that showed both strong revenue growth but also an overall net loss. Its stock shed over 5% after the news, but this later reversed to a gain of almost 10%. 

• COINBASE MAKES SOME COIN: Coinbase shares jumped 15% in the afterhours market after reporting earnings that beat analyst expectations by almost threefold. It’s the crypto exchange company’s first profitable quarter since 2021.

Don’t forget that U.S. markets will be closed on Monday in observance of Washington Day. NVIDIA, Walmart, BHP and Rio Tinto will be among those scheduled to report earnings next week.

Keep up to date with market news and insights by following us on Instagram, @superheroau!

That’s all for this week’s Spotlight!