CSL Ltd (ASX: CSL) shares are under pressure on Tuesday morning.
At the time of writing, the biotechnology company's shares are down almost 1.5% to $298.99.
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What's going on with CSL shares?
Today's decline appears to have been driven by broad market weakness today, which has offset the release of the company's annual research and development (R&D) update.
In its sizeable 84-page presentation, the biotechnology company provided the market with a breakdown on what it has in its pipeline.
This includes its Horizons 1 & 2 developments for immunoglobulins. Management notes that Horizon 1 is focused on gaining with its current processes. This includes maximising yields with minimal changes to current process and leveraging process analytics to identify new opportunities for improvement. It also aims to reduce regulatory complexity.
For Horizons 2, the company is focusing on the future of immunoglobulins processing. This includes a novel proprietary process to generate high immunoglobulins yields. It also aims to provide a product comparable to its current Privigen and Hizentra products.
Towards the latter end of its pipeline are Hemgenix, Kostaive, RiaSTAP, and garadacimab. Management notes that these are all advancing toward registration and approval for key indications in key regions.
Though, it acknowledges that it hasn't been plain sailing for the company. It concedes that it has "experienced a few late-stage setbacks (KCENTRA Trauma, HIZENTRA DM, clazakizumab AbMR)." Nevertheless, it believes that "each of these products have promising follow-on indications" which it is actively pursuing.
Management also highlights that it has " exciting" novel programs underway. This includes phase II programs for Vamifeport and Hemopexin, as well as Phase III programs for aTIVc, CSL964, clazakizumab, and HIZENTRA POTS).
It believes these have the potential "to add incremental value to patients & CSL."
Should you invest?
As covered here yesterday, analysts at Bell Potter think now is the time to buy CSL shares.
The broker has initiated coverage on the company's shares with a buy rating and $345.00 price target. Based on its current share price, this implies potential upside of over 15% for investors between now and this time next year.
Bell Potter believes that its shares are undervalued based on current multiples and its positive earnings growth outlook. It said:
In our view the stock looks undervalued on a PE ratio 18%/8% below 5yr/10yr historical averages and is set for double-digit earnings growth driven by the core Behring division. Short-term catalysts include the R&D investor update on 22 October and potential garadacimab HAE approval in the current quarter.
