Why the CSL share price opened 2.13% higher on Monday
We examine the news that potentially contributed to the biotech’s run up at the open on Monday, 7 September.
The CSL Limited (CSL) share price opened higher on Monday, after the company revealed it had signed an agreement with the Australian government and the UK-listed AstraZenecta to manufacture two separate Covid-19 vaccines – should their respective clinical trials prove successful.
Investors responded optimistically to this news at the open, bidding the stock 2.13% higher – to $285.00 per share. CSL however gave back most of those gains as the session wore on, last trading around $280 per share.
After hitting a 52-week high of $342.75 per share in February, CSL has proven volatile, trading to a low of ~$270 per share in March. Concerns over plasma collections and currency headwinds have continued to weigh on the stock.
CSL share price: details of the Covid-19 agreements
Looking at the specifics of today’s market update, CSL revealed that it had signed two heads of agreements (HOAs) – one with the Australian Government and one with AstraZenecta.
Under the agreement with the Australian Government, CSL has committed to manufacturing some 51 million doses – based on a two dose per person regime – of the coronavirus vaccine currently being worked on by the University of Queensland.
The company said first doses of this vaccine are set to be released by mid-2021.
'CSL has been working at pace to respond to the pandemic and has invested significant resources in the rapid development and large-scale manufacture of UQ-CSL V451, along with a number of other therapeutic programs,’ the company pointed out.
Early stage results from the University of Queensland’s Covid-19 vaccine have been described as promising, however it was noted that later stage success remains uncertain.
Assuming the University of Queensland's Phase 1 study is a success, it was noted that 'CSL will take full responsibility for the subsequent Phase 2b/3 clinical trial, which is expected to commence in late 2020.'
Want to take a position in CSL, long or short?
Create an IG trading account or log in to your existing account to get started now.
AstraZenecta’s Covid vaccine in focus
Beyond the agreement with the Australian Government, CSL noted that it had also agreed to manufacture some 30 million doses of AstraZenecta’s covid-19 vaccine – also based on a two doses per person regime – which is set to become available in early CY21.
The company elaborated that the Australian government would provide funding to support CSL’s manufacturing efforts around AstraZenecta’s vaccine. The scope or amount of this funding commitment was not quantified.
'Acknowledging that CSL is the only company in Australia with manufacturing facilities capable of producing this vaccine, we thank the Australian government for their support,' CSL's CEO, Paul Perreault said.
Mr Perreault further added that:
'While there are still a number of milestones to be met, we are hopeful that by next year we'll be in the fortunate position of having a vaccine candidate to support Australia and the world's emergence from this crisis.'
As noted at the start, both Covid-19 vaccine manufacturing agreements are contingent upon the successful completion of clinical trials.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets