As Neuren Rises, CSL Shares Down Amid Trump’s Tariff Warnings
This week, the biotech market saw some drama. Neuren Pharmaceuticals’ stock rose by nearly 1%. At the same time, CSL shares dropped again, falling to an 18-month low. What caused this split? A warning from U.S. President Donald Trump.
President Trump plans to add tariffs on foreign-made medicines to boost U.S. drug production. That includes drugs coming from Australia and Europe. This made investors nervous, especially those holding big players like CSL.
However, here’s the twist: some smaller biotech stocks, like Neuren, gained. Why? Perhaps people are betting on new research, or maybe they believe smaller companies will be less affected.
Let’s take a closer look at what’s going on. We’ll look at why Neuren went up, why CSL dipped, and what Trump’s tariff warning could mean for the whole industry.
Trump’s Tariff Threat: The Ripple Effect
Trump, speaking at a cabinet meeting, said drug imports could face “a very, very high rate, like 200%,” with a grace period of 12-18 months. The goal? Force offshore producers to bring manufacturing to the U.S.
Australia, home to CSL, a major vaccine and plasma exporter, watched closely. The nation exports about A$2.1 billion in pharmaceuticals annually to the U.S. Treasurer Jim Chalmers urgently demanded clarification, warning of “very concerning” consequences.
Neuren Pharmaceuticals: Small, Nimble, Resilient
Neuren makes treatments for neurodevelopmental disorders. Its early-week jump of ~1% came as tariff headlines rippled through the sector.
Interestingly, bigger biotech indices in the U.S. rose slightly, hinting at investor doubt about the policy’s follow-through.
Why Neuren was immune:
- It has minimal U.S. sales exposure; its main market is elsewhere.
- It just cleared an important FDA meeting for its Rett syndrome drug.
- Small caps often swing on news, not fundamentals, and investors saw a possible bounce.
CSL: Tariff Target and Investor Worry
CSL is Australia’s biotech powerhouse. But it’s feeling the pressure.
Stock Drop
CSL shares slid ~5% after the tariff alert, trading near A$233, down nearly 17% year-to-date.
Tariff Exposure
CSL sources ~49% of revenue from U.S. customers, especially plasma products. Tariffs here would hit hard, even a 10-25% duty could erode EBIT by up to 20%.
Adding to concern: these products rely on the global collection and export chains fragile under new trade barriers.
Company Response
CSL is increasing U.S. manufacturing, such as ramping up Kankakee, IL, capacity. This is costly long-term insulation. Also, they’re lobbying for tariff carveouts. But Trump’s admin has shown reluctance to exempt pharma.
Analyst and Investor Commentary
Motley Fool Australia
CSL remains down ~6.4% since early April when Trump first raised tariff talk. They say caution remains.
Bell Direct
Notes investor sidelines: “renewed uncertainty and global volatility” have kept the ASX‑200 rangebound recently.
Capital Brief
Sees dual risk and opportunity in biotech. Big firms like CSL face exposure, and nimble players like Neuren can ride investor flows.
Industry Alerts
The Biotechnology Innovation Organization warns tariffs could disrupt global supply, delay R&D, and hike costs; most supply chains can’t pivot fast.
What Could Happen Next?
Short-term
- The U.S. Commerce investigation is due soon. If it moves ahead, market jitters will deepen.
- There’s a grace period, but delays or uncertainty will drag sentiment for weeks.
Long-term
- Companies may relocate U.S. manufacturing, which costs time and cash.
- Australia might push back via trade talks, leaning on PBS protections.
- Biotech investors may rotate to smaller players with less U.S. exposure.
Who Wins and Loses
- Winners: Small biotechs with minimal U.S. revenue (e.g., Neuren, Mesoblast) may find gains. ETFs could grow too, gambling on recovery.
- Losers: Big exporters CSL especially will likely stay under pressure until clarity arrives.
- Wildcard: Global supply chains. If companies re-shore production, it could temporarily disrupt drug access and prices, especially for generics.
Final Thoughts
We face a biotech tug-of-war. Trump’s tariff threats shook markets but haven’t fully landed yet. Neuren rose on investor speculation and solid drug news. CSL fell amid fear of heavy U.S. levies. The health of Australia’s pharma sector now depends on three things:
- U.S. investigation outcomes
- Aussie and global supply chain adaptation
- Clarity on policy timing and carve-outs
For investors, the split highlights risk and opportunity.
Big policy news can move stocks fast. But not always fairly. Neuren rode optimism, and CSL got spooked. That’s why we track both market reactions and real-world exposure to judge the biotech industry’s next turn.
Frequently Asked Questions (FAQs)
CSL shares may stay under pressure due to U.S. tariff risks. But long-term growth is possible if global demand for vaccines and plasma stays strong.
Some experts think CSL is undervalued because the stock has dropped a lot. But others say it’s risky until the U.S. gives clear rules on drug tariffs.
Disclaimer:
This content is for informational purposes only. Do not take it as financial advice. Always conduct your research.