CSL Limited [ASX:CSL] is a biopharmaceutical company involved in research, manufacturing and product marketing. CSL develops a range of products to treat viral and bacterial illnesses, bleeding disorders and coagulation disorders such as blood clotting.
The CSL share price closed 1.30% higher on Friday.
Recently CSL acquired the Novartis influenza vaccine business for US$275 million. Settlement will occur in the middle of 2015.
The $950 million share buyback plan will continue, as CSL are using surplus cash for the sale.
The Novartis influenza business will be combined with the company’s subsidiary, bioCSL.
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Combing these two businesses will make CSL is the number two player in the US$4 billion influenza vaccine industry. The growth potential of this increases the value of CSL. Sales could be US$1billion per year over the next three to five years.
In additional, CSL has been exploring a plasma treatment for the Ebola virus at the request of the Gates Foundation.
In the two weeks since the Ebola announcement, followed by the Novartis acquisition, the share price has increased almost 8%.
CSL is now reaching $80 per share.
Some analysts believe CSL’s market share will be tested this year and next. Baxter International Inc. [NYSE:BAX] is soon to have immunoglobin product HyQvia approved in the US. This product could take market share from CSL’s Hizentra.
However, the new business may offset investors’ fears of greater competition.
This new high will see many investors taking profits, so be prepared for a fall in the share price in the coming weeks. CSL regularly dips with market news, so time your entry into this stock carefully.
CSL remains a solid defensive stock.
Shae Smith+
Editor, Money Weekend
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