Health Check: CSL is not out of the woods yet, bearish analysts warn

• CSL watchers slash their valuations, yet retain faith in an eventual turnaround
• Medibank Private investors should Live Better now
• Dimerix’s trial plans are on track

CSL (ASX:CSL) analysts haven’t exactly given up on the stock following yesterday’s revenue and earnings downgrade.

But they’re not convinced that the worst is behind the vaccines and plasma giant, either.

Citing the dire US vaccination climate, the company revised full-year revenue growth to 2-3%. This is compared with the 4-5% guided to at the company’s August 19 full-year results.

Management trimmed net profit growth expectations to 4-7%, compared with the previously envisaged 7-10% increment.

The board has also shelved plans to demerge its Seqirus vaccines business.

CEO Paul McKenzie pointed to a likely recovery in the 2026-27 FY, while chairman Brian McNamee stressed the strategic direction for CSL and Seqirus was “unchanged”.

CSL shares plunged 16%, which broker Citi today dubs as “outsized” relative to the earnings downgrade.

But that’s not the way it works. Indeed, the stock this morning lost a further 4% or so.

“The start to the flu season looks worse for vaccine uptake than expected, and there are headwinds for albumin [a key plasma derived product],” Citi says.

“Whilst we see upside on a 12-month view, we think investors are not yet convinced that this is a true clearing event and that CSL is now a ‘show-me’ story.”

Paring valuations

Citi retains a buy call on the stock, but lowers its valuation from $265 to $230 a share.

UBS similarly maintains its faith, but pares the stock’s worth from $300 a share, to $275.

The firm wants “better confidence” in the profit outlook for CSL’s key Behring plasma division.

It also wants evidence that management has a plan to avoid potential US tariffs and pricing pressure. The latter could result from the Trump administration’s ‘most favoured nation’ drug pricing policy.

Broker Morgans also retains a buy call, with a target price of $249 compared with $293 previously.

“Although it remains challenging to know when US influenza vaccination rates will stabilise, we believe the risk of a permanently lower base is being over-priced,” the firm says.

That’s code for ‘Trump (and RFK Junior) won’t be in power forever’.

… or will they, after a constitutional tweak?

Morgans adds that the Behring is valued well below its peers and its long-term average worth, “which we see as unjustified”.

Medibank Private aims for healthier profits

Encompassed in a 60-page summary, Medibank Private’s (ASX:MPL) ‘health immersion’ manifesto is all about emphasising primary care and wellbeing over the “hospital-centric curative model”.

The insurer’s measures include beefing up its Live Better health and wellbeing program. It also wants to move from generic care to a more personalised approach.

“Australia’s healthcare system is one of the best in the world, but it is under pressure and urgently needs meaningful transformation to ensure we can keep up with the increasing needs in the community,” Medibank CEO David Koczkar intones.

“It’s time for the health system to shift from treatment to prevention, from hospital to community, from analogue to digital and from generic to personalised care.”

The insurer targets boosting its primary health insurance market share to 26.8% from 26.5% now.

That seems a modest increment, but Medibank Private is already leader in a tough market for attracting new customers.

Through its wider wellbeing initiatives, the company hopes to service ten million people compared with five million now.

That all sounds fine – if not fluffy in parts.

But the headline message is the company’s target of boosting annual earnings to $200 million by 2029-30, compared with $76.7 million last year.

So while the health system might be strained  – some say broken – health insurance can be nicely profitable in the right hands.

Investors weren’t exactly immersed in joy, sending Medibank shares a tad lower.

Dimerix girds for pivotal FDA chat about endpoints

Dimerix (ASX:DXB) and its US partner Amicus Therapeutics are girding to approach the US Food and Drug Administration (FDA) on using a key surrogate endpoint in the company’s phase III kidney disease trial.

Further findings from a third-party analysis by a group called Parasol concluded the trial, dubbed Action 3, should be able to avail of proteinuria as a primary endpoint at 104 weeks.

This is opposed to waiting years for the actual outcome of the drug on the patients’ spuds.

Proteinuria is the level of protein in the urine and a key indicator of kidney health.

In March the FDA confirmed the acceptability of proteinuria endpoints for the trial.

The company will seek further FDA feedback “in coming months”.

Action 3 tests Dimerix’s drug candidate DMX-200 for the rare kidney disease focal segmental glomerulosclerosis.

In its quarterly report, Dimerix said it had dosed 259 patients in the trial across 190 sites.

The company is targeting 286 patients, so there’s an end in sight.

Meanwhile Dimerix expended $18.7 million for the quarter, “in line with company expectations”. The figure included one-off costs.

That left end of quarter cash of just over $49 million.

The company says trial expenditure is not linear and expects cash outflows to be “appreciably lower” in future quarters.

Dimerix’s coffers were engorged by upfront payments from four global distribution agreements.

These cover the US, Japan, the Middle East and Europe, Canada and locally.

These agreements could deliver up to $1.4 billion when potential milestone payments are accounted for.

The company eyes further licensing deals “with potential partners in territories not already licensed.”

Hopes rise for LTR Pharma’s US rollout

The developer of a nasal spray-based treatment for erectile dysfunction (ED), LTR Pharma (ASX:LTP) says it is on track to launch a variant product in the US market in the first half of 2026.

The therapy, Roxus, is a variant of the company’s Spontan. Also based on the established orally delivered ED agent vardenafil, Roxus avails of the FDA’s 503A personalised healthcare pathway.

Spontan is yet to be approved and is subject to a phase III trial in the US, in late 2026 or early 2027.

In effect, Roxus allows for faster entry into the US$3.7 billion US market.

To help pave the way, LTR has appointed two leading US ED specialists to its scientific advisory board.

“These appointments position LTR Pharma to enable prescriber adoption and market penetration ahead of Roxus’s planned launch,” the company says.

LTR reported September quarter outflows of just over $2 million.

This left a cash balance of $29.7 million, “providing substantial runway to execute strategic objectives across multiple markets”.