Health Check: Nothing to spook investors in CSL’s update as the blood still flows thick

Blood products giant CSL says current-year earnings should come in 10-13 per cent higher, despite its moves to taper capital expenditure. Here's your health wrap.

Pic via Getty Images

• CSL expects to be able to taper back on capital spending – at least for the time being

• Heramed reports record active users for its pregnancy-monitoring platform

• As with Russell Crowe, we’ll steal Truscreen’s latest achievement from the Kiwis

Blood products and vaccines giant CSL (ASX:CSL) has reaffirmed current-year earnings expectations as it enters a period of reduced capital expenditure.

CEO Paul McKenzie this morning told the gathered throng at CSL’s AGM at Melbourne’s RACV Club that management was still good for current year net profit of $3.2 billion to $3.3 billion, 10-13 per cent better than last year’s run rate in constant-currency terms.

Revenue is expected to grow 5-7 per cent on last year’s $14.8 billion, which was up 11 per cent.

McKenzie said the company expected to go easy on the dollars it needed to invest, having completed new plasma facilities in Switzerland and Germany and a new flu vaccine plant at Melbourne’s Tullamarine.

Or for the time being, at least.

“Whilst we are now entering a period of less capital-intensive growth we will continue to grow as demand for our product increases and we may need to add further capacity to our network before the end of the decade.”

Growth in plasma demand is a kind of no-brainer, given CSL’s life-saving therapies address conditions such as haemophlia.

Demand for CSL's core immunoglobin product range is expected to remain robust.

McKenzie notes the expected regulatory approval of its next product: garadacimab, a subcutaneous treatment for hereditary angioedema.

The Behring plasma arm should also achieve margin growth, on the back of cost initiatives including new ways to collect blood from donors.

But the company’s valuation has been held back by the so-so performance of its acquired iron products/kidney products franchise, Vifor.

As with Resmed, which we mentioned on Monday, there’s concern that the Ozempic-style anti-obesity products will stymie demand for Vifor’s services, which includes one of the world’s biggest dialysis networks, spanning 4000 clinics.

“We are operating within an evolving iron market and while there are pricing challenges for near-term growth, volume growth remains solid and we continue to be the largest and most significant player in the European iron market with further geographic expansion planned,” McKenzie said.

Meanwhile, the CSR Seqirus business (basically flu vaccines) is outperforming the market “albeit in tough operating conditions”.

So, there we have it: nothing to scare the horses – we'll leave that one for the kids on Thursday night – but not too much inspiration from a company trading on a price-earnings (PE) multiple of more than 30 times.

Then again, the stock always trades in a high PE but the company manages to winkle outgrowth in the mid to long term.

CSL shares were down 0.65 per cent to $290.10 in an overall bouncier market.

Record users for pregnancy monitoring platform

After a management and operational shake-up, HeraMED (ASX:HMD) reports record "active users" – a.k.a expectant mums – for its pregnancy monitoring platform Heracare.

As of the end of September the company had registered 3800 users, a record 710 of them active (the previous record was 560 in mid-June).

The company attributes the uptick to the launch of Heracare at Florida’s Broward Health, as per a two-year deal announced this year.

Broward is one of the top 10 US healthcare networks.

“Since live in June 2024, in excess of 200 pregnant mothers were successfully onboarded in the first 100 days,” the company said.

“The number of accumulated Heracare platform mums is expected to continue growing as a number of previously announced agreements and partnerships are implemented across early 2024.”

Heracare's core Herabeat hardware consists of a round sensor (which goes on the belly) and is linked to a smart phone application.

Based on hundreds of tests to date, the company claims the results are the same as those of an ultrasound clinic machine, give or take one heartbeat per minute, of about 110 to 160 beats per minute.

Heracare’s original emphasis on home monitoring has been supplemented by deals such as the Broward compact and a local tie-up with Telstra Health.

In a setback in late September, the local Therapeutical Goods Administration cancelled the use of all home-use foetal doppler monitors, after a two-year post-marketing review.

“The TGA review confirmed that the lack of specialist training to use these devices could result in false reassurance of the health of the baby," the company says.

Heramed needs to meet a more onerous classification but is confident of emerging as Australia’s only home-use foetal heart rate-monitoring platform.

The company’s US and European approvals are not affected.

Heramed, meanwhile, reported revenue of $299,000 and a loss of $1.032 million. End-of-quarter cash stood at $280,000 but the kitty since has been replenished with $3.1 million by way of a two-tranche placement.

Heramed shares were 4.5 per cent lower at 2.1 cents.

Truscreen does us all proud with latest accolade

We’re not in the habit of reporting every single gong, but Truscreen Group (ASX:TRU) has done us all proud by being ranked among the top six women’s health start-ups among 580 companies by an Austrian-based report.

"Done us all proud" also refers to our Kiwi brethren, given the developer of a cervical cancer screening tool is Auckland-based but ASX-listed.

The honour was bestowed by StartUs Insights, in its self-evidently titled report "Six Top Women’s Health Startups Impacting Healthcare".

Well done, bro!

“Cervical cancer is a major cause of female mortality worldwide, with a bigger death toll in the populations that lack screening programs,” the report says.

“Screening methods that don’t require lab facilities for cervical cancer diagnostics can solve the accessibility challenges in developing countries as they are an alternative to traditional Pap smear tests.”

Enter TruScreen, which has a screening device to detects precancerous changes through optical and electrical measurements of cervical tissue.

Truscreen says trialling to date shows the test is equally sensitive to Pap smears, although it claims superior accuracy as well.

Truscreen can be effectively used with minimal training of medical or  paramedical staff and doesn’t require the infrastructure and resource costs associated with cytology-based screening .”

As well as being approved here and in NZ (of course), the device can also be sold in the UK, China, Saudi Arabia, Russia and Mexico.

Truscreen shares were steady at 1.8 cents.

At Stockhead, we tell it as it is. While Heramed is a Stockhead advertiser it did not sponsor this article

Originally published as Health Check: Nothing to spook investors in CSL’s update as the blood still flows thick