Cochlear Limited

ASX:COH

Cochlear Limited

ASX:COH
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$298.23 (+1.8%)
Last close price
#227
Rank
3
Held by
17
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Reports (1) My Report Forum Investors
Forum Topics COH COH Risks

Pinned straw:
Aaronfzr
Added 2 months ago

Cytomegalovirus Vaccines in development


CMV is the major cause of congenital deafness; mothers infected during their pregnancy can transmit the virus to their foetus, inducing a wide range of problems in the unborn baby, including deafness. This impacts 1:200 babies, 1:5 of whom develop some congenital complication.

At least one vaccine is in phase 3 trial that i can find (Moderna's mrna vaccine, CMVictory trial).

https://trials.modernatx.com/study/?id=mRNA-1647-P301


Results anticipated 2026. If positive, I'd expect rapid approval and probably government-funded rollout to women of childbearing potential, given the public health problem. If so, would expect significant decreases in congenital deafness by 2030-2031. This might seem a long way away (7/10 years of a DCF model!), but my opinion is that the risk has not been adjusted-for by the market. Based on current multiples, the assumption for COH is that it will continue to grow with a locked-in user base for decades to come.

If congenital CMV is eradicated, the game isnt over for COH. There are other causes of comgital deafness, it can continue to sell devices to people with implants already installed, and can continue expanding to developing economies where the deafness is under-treated. It can also keep pushing for a piece of the age-related deafness market, although implants are not really accepted therapy here yet. In those cases, COH continues to have a market but much lower margins and growth potential.


Im positive on COH but with these risks caution against buying too at current multiples within the next 18 months
lowway
Added 2 months ago

Great work @Aaronfzr, really fascinating information on one of my pet stocks (see best performing stock forum article where I still hold my original investment purchased for ~$20/each).

Even though this is new information for me, and I align pretty much with your thinking about the longer-term impact, maybe the market is on to this as well, or maybe as I've witnessed over the years of holding $COH, this is just another blip in the upwards trend.

That said, at a current PE of ~52 and a fall in pricing from $340 to $291 over the past 3 months (see Commsec chart below), maybe the market is already (like you) on to this as a longer-term mark down.

Really appreciate the heads up as I had no prior knowledge of this information, even though it is a major holding in my RL portfolio.


f56ce61e34e9263ed1e6db1cf5edd2d2449d09.png

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Aaronfzr
Added 2 months ago

Its a good company esp if youve held it for a long time! Wouldnt be a sell for me yet, but keep a close eye on this space to see where it belongs in your overall portfolio.

personally I havent seen much commentary on the vaccines... more talk about slowing growth potential due to market saturation in some economies, and expansion into lower-margin markets, while the bulls talk about mutli-decade customer retention from newly implanted devices. All of that is true, but if new-device growth in developed economies fell by 50-70%, I dont think the current PE could sustain it


on the other hand, if implants can become accepted for age-related hearing loss, thats an even bigger market

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