How are CSL shares performing after finalisation of Vifor acquisition?

Highlights:

• CSL shares managed to end a little higher on Tuesday (9 August 2022).
• In its last announcement dated 2 August 2022, CSL had stated that it expects to complete the acquisition of Vifor on 9 August 2022.
• The company is expected to conduct a dedicated Vifor market briefing to discuss the growth strategy of the acquiring entity in October 2022.

Shares of CSL Limited (ASX:CSL) have been on the investors’ radar since the company announced to to acquire all the shares of Vifor Pharma Ltd. for US$179.25 per piece. Today (9 August 2022) is the day that company expected to complete the transaction, as CSL said in the last announcement, dated 2 August 2022.

Although, the CSL has provided no update regarding the completion of the acquisition.

On the back of the expectation of completion of acquisition, the shares of CSL have taken an upward trend on Tuesday. During the early trading hours, the share price touched AU$298.10 apiece (at 10:25 AM AEST). Later, the shares were buzzing around its previous day’s close. At 2:47 PM AEST, the shares were spotted trading 0.14% up at AU$296.05 per share and finally ended 0.449% higher at AU$296.970 apiece.

It would not be an exaggeration to say that CSL shares mimic the share price movement of the benchmark index, ASX 200 Health Care (INDEXASX:XHJ). XHJ touched the high of 43,899.80 (at 10:25 AM AEST) during the trading session and ended 0.2% lower at 13,590.9 points.

Why is the acquisition of Vifor big news?

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Vifor Pharma is a pharmaceutical company, known for leadership in iron deficiency and renal diseases. The acquisition of the global company – Vifor would deliver higher level benefits to the patients as it has a leadership position across adjacent and complementary franchises.

The transaction would expand the portfolio breadth of CSL with the addition of seven commercialised products. The combined company would expand the pipeline of 37 products in the development phases, an increase from the 32% standalone pipeline of CSL. Also, more than four products are expected to be launched in 2022/23.

Vifor had formed joint ventures that makes it the first choice for innovation in nephrology. CSL mentioned that nephrology market is to see vast growth and is estimated to reach a value of US$25 billion in 2026. Thus, the transaction would empower CSL to take advantage of the growing nephrology market.

Vifor Pharma would also offer access to logical new adjacencies in Iron deficiency and renal disease with significant growth opportunities and market positions.

In a statement, CSL said that the resources, R&D capabilities and global reach of CSL would accelerate growth in transplant, renal and cardiovascular-metabolic. The company also expects a run rate of pre-tax cost synergies of US$75 million, phased in more than three years after the closing of the acquisition.

Recent update on the Vifor acquisition

Last week, CSL shared that it has received all the regulatory clearances required for closing the transaction. Herve Gisserot, a seasoned biopharma executive, has been appointed as the general manager to lead the business after the acquisition.

The tentative date for the full-year results is 17 August 2022, and at that time, the company won’t be in a position to share the guidance for the fiscal year 2023.

The growth strategy of Vifor, along with the insights into the financials and product portfolio, will be discussed on 17 October 2022 through a Vifor market briefing.