ASX biotech shares provided a mixed bag of results in 2021 with many names underperforming their benchmarks while others flourished amid COVID-19 related tailwinds.
Whilst many Aussie biotechs came in behind the pack this year, the S&P/ASX 300 Pharmaceuticals & Biotechnology Index (AXPBKD) has springboarded off its 3-month low in August. It's climbed almost 9% in that time, indicating strengths in the broad sector.
Now that the effects of the pandemic are starting to diminish, visibility for the Australian biotechnology sector is clearer and several experts have weighed in with their analysis on ASX-listed companies in the space.
So, as we roll on out of 2021 and into the new year, let's dissect the expert commentary to give investors an outlook on several ASX biotech shares in 2022.
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CSL Ltd (ASX: CSL)
Shares in Aussie biotech giant CSL have reclaimed losses sustained earlier in the year and are now up more than 4% off their 3-month low in October.
CSL shareholders have endured their fair share of volatility this year to date, with the comany's shares trading as low as $248.50 in February and as high as $318 in November.
Despite the wide range, both Morgans and Macquarie are bullish on CSL shares coming into 2022.
Both like CSL's growth profile, backed by long-term tailwinds in the immunoglobulins (Ig) and plasma collection sectors as the impacts of COVID-19 start to settle.
JP Morgan is less constructive on the company, however, noting that US Ig volumes contracted by 9% in the US, CSL's major market.
"This is consistent with our expectations (and CSL forecasts) as supply has been constrained by the drop in plasma collections," the firm says.
Despite this, it expects a recovery to begin in the coming months as plasma collection volumes continue to improve in the US, yet isn't swayed enough to change its neutral rating on the share.
Whilst Morgans and Macquarie value CSL a buy at $324 and $338 per share respectively, JP Morgan is more conservative and has a $285 price target on its share price.
Nevertheless, in the list of analysts provided by Bloomberg Intelligence, 53% of the group has CSL as a buy. The remaining 47% — or 8 analysts — have it as a hold. There are no sell ratings from this group.
Mesoblast Ltd (ASX: MSB)
Share price returns in regenerative medicine player Mesoblast have been jagged these past few months, trading as high as $1.90 and as low as $1.505 in that time.
Despite the volatility, the Mesoblast share price has actually been trading sideways over the previous 3-month period.
Investors first reacted positively to study readouts on its rexlemestrocel-L product candidate back in November. The label, being developed to treat inflammatory diseases in both adults and children, was shown to exhibit a reduction in cardiovascular mortality, heart attacks, and strokes in a recent clinical trial.
The trial confirmed that a single dose of rexlemestrocel-L in conjunction with the current standard of care reduced the onset of heart attacks or strokes by 65% across the study's population group.
Bell Potter has Mesoblast as a "speculative buy" and values the company at $3.45 per share, whereas Eidson Investment Research has a $6.35 price target on the company's share price.
Meantime, Jefferies isn't convinced and caution investors on the risks of investing in early-stage biotechnology products, valuing Mesoblast at just $1.90 per share.
Given the wide spread in analyst sentiment, it appears judgement of Mesoblast's outlook in 2022 is mixed. In this case, it's wise to wait on the company's earnings to develop a more informed decision on the same.
In the last 12 months, the Mesoblast share price has plunged 63% into the red and is also down more than 24% this year to date.
Telix Pharmaceuticals Ltd (ASX: TLX)
Shares in oncology company Telix have soared to 12-month highs in recent days and now trade at $7.99 apiece at the time of writing.
Telix's Illuccix imaging platform for prostate cancer has created a wave of momentum in the past few months. This has seen has investors piling in to grab a spot for the ride in 2022.
The company recently advised it had received approval of its marketing authorisation application (MAA) in Europe for registration of Illuccix. This marks the final stage of regulatory assessment for the platform and is an important milestone in launching the offering on a global scale.
It now expects European approval for registration status to be provided no later than 23 March 2022. This is after it had already received regulatory approvals in Australia and potentially the US.
This regulatory momentum had analysts at several investment firms raising their valuations on the company's shares, such that the consensus price target for Telix is now $8.07.
Wilsons is most bullish on the company. After the updates, it recently raised its price target by 53% to $10.35 and rates the company as a buy.
Meanwhile, Bell Potter also just upgraded its valuation on the stock and sees it fairly valued at $8.30, while Jefferies and Jarden value Telix at $7 and $7.90 respectively.
6 out of the 7 firms from the list of analysts provided by Bloomberg Intelligence have Telix as a buy right now, reaffirming this bullish sentiment on its outlook for 2022.
Similar to the sector's performance in 2021, it appears the outlook for ASX biotech shares in 2022 is equally as mixed. Of course, there remains the looming threat of COVID-19 in the domain as well.
