CSL shares spike on record flu vaccine volume, return to pre-COVID levels for blood therapies

CSL shares spike on record flu vaccine volume, return to pre-COVID levels for blood therapies

Shares in Melbourne-based biotech giant and Australia's third-largest listed company CSL (ASX: CSL) rose by more than 7 per cent in early trading after the company revealed a 20 per cent rise in seasonal flu vaccine sales in the December half, as well as triple-digit growth for human papillomavirus (HPV) vaccine royalties and strong growth for several blood therapy lines.

The announcement follows a woeful two months for the company having fallen from a 52-week share price high of $319.78 in late November to $253 per share at the close of trading yesterday, partly due to a dilution of shareholdings at a discount to help pay for the planned $16.4 billion buyout of Switzerland's Vifor Pharma.

On Monday the group announced it had completed a $750 million share purchase plan (SPP) for funding the deal, complementing a $6.3 billion institutional placement and $8.4 billion in new debt and existing cash.

In today's announcement the company reported a 3 per cent decline in December half net profit after tax (NPAT) to US$1.76 billion ($2.46 billion), and forecasts for a full-year profit that will be around 5 per cent shy of the FY21 result at the top of the guidance range.

"CSL’s net profit after tax for FY22 is anticipated to be in the range of approximately US$2.15 billion to US$2.25 billion at constant currency," CEO Paul Perreault said.

"This includes approximately US$90 million to US$110 million in transaction costs related to the agreement to acquire Vifor Pharma."

The group highlights double-digit sales growth for two blood-related products from its division CSL Behring, as well as a record volume of 110 million doses of seasonal flu vaccines in the northern hemisphere for its Seqirus business. However, the company's core franchise - its immunoglobulin portfolio from blood (plasma) collections - continues to face difficulties.

"CSL has delivered a result in line with our expectations in a challenging environment brought about by the ongoing impacts of the global COVID pandemic," Perreault said.

"Our core franchise, the immunoglobulin portfolio, has been impacted by the industrywide constraints on collecting plasma in FY21 during the course of the global pandemic.

"We have responded by implementing multiple initiatives in our plasma collections network, which has given rise to significant improvement in plasma volumes collected. Given the long-term nature of our manufacturing cycle, this will underpin stronger Ig and albumin sales going forward."

He said CSL's key products, not limited by plasma collections, continue their strong growth trajectory.

"Our leading recombinant haemophilia B product, IDELVION , increased sales by 17 per cent with its compelling clinical profile driving patient demand and market share," the CEO said.

"KCENTRA, our peri-operative bleeding product, grew a strong 15 per cent as hospital demand began to return to pre-pandemic levels and HAEGARDA, our transformational therapy for patients with Hereditary Angioedema (HAE), increased 7 per cent driven by the continued shift from on-demand to prophylaxis treatment and successful new launches."

The record volume of flu vaccines led to a 17 per cent increase in sales for that segment on a constant currency basis.

"This was achieved by significant growth in seasonal influenza vaccines driven by record demand and Seqirus’ differentiated and high value product portfolio," Perreault said.

He said the Vifor Pharma acquisition would represent a meaningful acceleration of CSL's 2030 Strategy, by "further enhancing our focus on our therapeutic leadership areas, innovation, and sustainable growth". The executive expressed his pride in the way the company has responded to additional challenges from the Omicron variant of COVID-19, noting he remained optimistic for the future.

"Over the last six months of visiting our operations around the world and talking to staff and patients, I’m very encouraged by seeing increased social mobility and the beginnings of a return to a more normalised environment," he said.

"Following the initiatives we have implemented in our plasma collections network, collections have been improving and are expected to underpin stronger sales in our core plasma therapies.

"Seqirus continues to perform strongly as increased demand for influenza vaccines together with our differentiated product portfolio will see it deliver another profitable year. Consistent with the seasonal nature of the business we anticipate, however, a loss in the second half of the year."


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