Biotech giant CSL still expects double-digit earnings growth despite weak flu vaccine sales

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Biotech giant CSL still expects double-digit earnings growth despite weak flu vaccine sales

Low immunisation rates in the US has dented first-half sales for CSL’s flu vaccine business, but the biotech giant says it’s on track to deliver double-digit earnings growth this year.

CSL — Australia’s third-biggest company by market capitalisation at $130 billion — said revenue rose 5 per cent to $US8.48b ($13.5b) in the six months to the end of December, with net profit lifting 6 per cent to $US2.01b.

The company operates three divisions: Seqirus is its flu vaccine business, Vifor focuses on iron deficiency and nephrology products, while Behring collects and processes blood plasma.

CSL chief executive Paul McKenzie reaffirmed its guidance for the full financial year, with net profit expected to be in the range of about $US3.2b to $US3.3b, representing growth of 10 to 13 per cent.

Revenue for Seqirus fell 9 per cent to $US1.66b, which Dr McKenzie blamed on the decline in vaccination rates for influenza in the US, particularly in the 18 to 64 age cohort. The result was 15 per cent below consensus.

“After increasing sharply during the COVID pandemic, vaccination rates have declined for various reasons, with consumer apathy and reduced access being two of the main factors,” he told analysts on Tuesday.

“Lower vaccination rates have also led to competitive pressures in the market.

“This weak market backdrop has led to a disappointing result CSL Seqirus this *******.”

Dr McKenzie added the incidence of influenza and hospitalisation rates were up.

“This poses a significant public health risk. In Europe, there are signs that vaccination rates are stabilising and overtime, we expect to see a similar recovery in the US,” he said.

At the Behring division, sales rose 10 per cent to $US5.7b, while Vifor revenue grew 6 per cent to $US1.01b.

“While the market conditions for CSL Seqirus remain challenging, influenza will continue to be a burden to public health systems. We believe our differentiated strategy is well placed to grow market share,” Dr McKenzie said.

“For CSL Vifor, the iron market growth remains strong and we expect to maintain a leadership position. We will also build on the momentum in our nephrology business.”

In the past six months, shares in the company have fallen 12.4 per cent to $270.79.

CSL will pay an interim dividend of $US1.30 a share.

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