CSL Rumours

Submitted by Craig Strzelecki on 24 May, 2007 - 20:45

CSL shares have fallen over 4 percent this morning following rumours, circulated via a public interest website, that the Gardasil vaccine (for which CSL receives a net ~6% royalty) has caused three deaths, as part of 1,637 adverse reactions so far reported to the FDA. This is clearly gaining traction in the market with the stock down ~8% over the last two days. The recent press surrounding minor patient reactions to Gardasil vaccinations in Australia would appear to have compounded the current noise. Stockmarket analysts Macquarie Research Equities are yet to fully confirm the veracity of the claims of the 'Judicial Watch' website. Even assuming the assertions are factually correct, it is important to put the claims into context. 1,637 reactions (mostly minor reactions) is relatively insignificant when considered against the ~1.6m Gardasil inoculations performed so far in the US. According to the site, 342 or the reactions, recorded via the Vaccine Adverse Event Reporting System (VAERS), were considered serious. Of the three deaths apparently reported, the details of one is vague, the other two are recorded as occurring 6 and 14 days post vaccination (one of the deaths reported received a number of different vaccines on the same date). The causes of the latter two apparently relate to the cardiovascular system but the causes of death were essentially different. The analysts consider it unlikely that the FDA has considered the linkage of death and/or serious adverse reactions as specific to the Gardasil vaccine, as it would surely have acted (the 'public interest' website seems to suggest that the FDA panders to Pharma industry profitability). Further, the analysts also find it unlikely that this would have escaped the attention of the financial markets with respect to Merck whose recent earnings outperformance is materially due to Gardasil. As for the reactions in Australia, pre-pubescent children often have minor reactions to vaccine inoculation, particularly psychologically-driven reactions. Minor physical reactions are generally related to the type of vaccine adjuvant used, and the vaccine adjuvant used for Gardasil (Aluminium-based) the most common type of adjuvant used in modern vaccines. At this stage HPV represents 8.7% of MRE’s CSL valuation. The analysts retain their Outperform recommendation

CSL Limited is listed on the Australian Stock Exchange (ASX) under stock code CSL. You can view their investor website here. CSL was listed on the ASX on 8 June, 1994. Elizabeth Alexander is the chairman for CSL and Brian A McNamee the CEO. This company is a global, specialty biopharmaceutical company that develops, manufactures and markets products to treat and prevent serious human medical conditions. They are involved in the development, manufacturing and marketing of pharmaceutical and diagnostic products, cell culture media and human plasma fractions. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade CSL. Check your charts and good luck with your share trading!