The Trump Administration has withdrawn its proposed rebate rule which was intended to stop the practice of pharmacy benefit manager rebates from January 1, 2020. UBS suggests the most likely reason was the cost of implementation.
UBS continues to expect around 15% of the company’s global immunoglobulin sales will be exposed to potential reform of the international pricing index, the only remaining comprehensive drug pricing reform available in the US.
A -18% price reduction is estimated, which would reduce valuation by around -6%. No changes are made to forecasts because of the significant uncertainty. Buy rating and $223 target maintained.
Sector: Pharmaceuticals, Biotechnology & Life Sciences.
Target price is $223.00.Current Price is $219.77. Difference: $3.23 – (brackets indicate current price is over target). If CSL meets the UBS target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
