Health Check: CSL shares do another Humpty Dumpty, but experts say this bruised egg can be fixed
Aroa Biosurgery says growing non-US sales should offset the impact of Trumpian tariffs
'Opthea 2.0' is likely to stick with its knitting
CSL (ASX:CSL) has cemented its status as this reporting season's Humpty Dumpty of the large caps, this morning suffering a further share price fall of up to 8% on top of yesterday's 17% selloff.
Still, the share rout incurred this week reflects a miserable response to both the plasma giant's full-year numbers and a multi-pronged suite of 'transformational initiatives'.
These include 3000 job losses and demerging the Seqirus vaccines arm.
Despite airing a laundry list of grievances, the experts maintain this bruised egg can be put back together again.
The late British writer A.A Gill was reputed to be the world's harshest restaurant reviewer, using descriptors such as 'the bowls and dishes dribble and limp to the table with a yawning lassitude'.
Sadly, brokers deploy a blander literary tone.
But today's 'harshest critic' accolade goes to Bell Potter's Thomas Wakim, who cuts his CSL buy call to a hold and slashes the firm's 'target price' from $305 a share, to $240.
He notes that revenue from the CSL's powerhouse Behring plasma division only grew 1% in the second half, with flagship immunoglobulin sales falling 1%.
CSL's forecast of 7-10% current year earnings growth fell 2 percentage points shy of market expectations.
Also, the 'demerger is unlikely to create value uplift due to falling vaccination rates.'
'Bruised not broken'
Citi reduces its valuation from $335 to $300, but maintains a buy on the grounds that Behring is 'not broken'.
In a note headed 'bruised not broken" – yep, there's a theme going on here – UBS also maintains a buy with a $300 valuation, down from $310.
The firm opines the stock is undervalued, assuming the status quo remains.
'However, it is hard to see a re-rating catalyst, with confidence around Behring unlikely to return .'
The firm cites ongoing risks from Trump's tariff and Most Favoured Nation drug pricing policies.
Suggesting that investors have thrown out the Behring baby with the bathwater, Morgans sticks with a buy at $292 (down from $303).
'While investors have taken a glass-half-empty approach, we believe the restructuring augments – not masks – the underlying business.'
Macquarie values the shares at $295 and dubs the selloff as an overreaction.
As with Morgans, the firm says CSL should still manage double digit earnings growth in the mid-term.
Aroa says boosted non-US sales should offset tariff hit
Aroa Biosurgery (ASX:ARX) chairman Jim McLean says the Trump administration's recently imposed tariffs will 'have some impact' on the Kiwi-based woundcare house.
But the pain should be offset 'to some extent' by expanded sales outside of the US.
In late July the White House plonked a 15% tariff on NZ goods, an inexplicable increase on the announced 10% that also applies to Australia.
Aroa's Nasdaq-listed partner Tela Bio held the European sales rights for Ovitex. The product is a key exponent of the company's extracellular matrix platform, derived from sheep stomach material.
'Sales in are making an increasingly larger contribution to their total sales,' Aroa chairman Jim McLean told today's AGM in Auckland.
In May Aroa reported revenue of NZ$84.7 million for the 12 months to March 2025, up 23%.
Earnings before interest depreciation tax and amortisation (ebitda) came in at NZ$4.2 million, a turnaround on previous $3.1 million deficit.
Management guided to current year revenue of NZ$92-100 million and normalised ebitda of NZ$5-8 million. Today's forum provided the chance for management to tweak guidance, but it hasn't.
'We expect to continue delivering strong growth through FY26 and beyond,' McLean said.
Enhanced product range
During the year Aroa enhanced its existing Ovitex range, including a hernia repair device and larger format options for reconstructive surgery.
The company is also carrying out preclinical and clinical studies of Enivo, to manage post-operative 'dead space' resulting from tissue being removed from the body.
This work is pitched at US Food & Drug Administration (FDA) clearance.
McLean adds that some 'Australian investment market sentiment regarding Tela Bio has been overly negative' and this has rubbed off on Aroa.
'We receive significant cashflow as their business grows and this supports the development of our own sales and marketing capability in the US,' he says.
'Accordingly, Tela Bio's success benefits us greatly.'
Invion wins FDA 'orphan' status
Following cancer play Invion's (ASX:IVX) 57% share romp yesterday, the company says the FDA has bestowed orphan drug designation on its proposed treatment for the oft-overlooked anal cancer.
Invion's program deploys photodynamic light therapy, which uses a photosensitising drug and a specific light to destroy cancer cells.
With Melbourne's Peter MacCallum Cancer Centre, Invion plans a trial covering anogenital cancers. These include anal, vulvar and penile cancers and typically are challenging to treat.
Invion's candidate INV-043 would be in combination with immune checkpoint inhibitors.
FDA orphan designation confers benefits such as seven years of marketing exclusivity, fee waivers and potential tax benefits.
Invion today responded to an ASX query as to why the shares soared from a low of 9.2 cents to a peak of 14.5 cents yesterday, ahead of the announcement.
The short explanation is the company did not know the FDA had published the news on its website – but punters sure did.
The stock today eased 3.5 cents, or 14% today.
Opthea will look inwards, then outwards if needs be
Now free from the threat of bankruptcy, Opthea (ASX:OPT) is likely to use its residual cash to further treatments in its areas of expertise.
Outlining 'Opthea 2.0' following the company's well-reported March phase III trial flops, chairman Jeremy Levin said the company had a 'fundamental repository of knowledge' in vascular endothelial growth factor (VEGF) inhibitors.
Opthea's lead candidate OPT-302 aimed to treat wet aged relate macular degeneration. OPT-302 is a fusion protein blocking the activity of two VEGF proteins: VEGF-C and VEGF-D.
Opthea was developing OPT-302 as a combination therapy with two existing drugs. The trouble is, the sham control group worked spectacularly – and consistently – well.
Opthea yesterday said it had settled with a group of investors owed up to US$680 million – at least on paper.
The deal leaves Opthea with US$20 million plus an unquantified research and development tax credit.
Levin says there's been a lot of VEGF work globally, 'which leads us to think there may be opportunities'.
Otherwise, the biotech landscape is replete with opportunities.
'We will start looking inwards and then look outwards'.
Pared-down management is talking to the ASX about resuming trading. The shares have not traded since the March setback and are frozen at 60 cents.
We make out the current cash backing at 2.2 cents per share.
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