Australia biotech firm CSL says plasma business hit by
Omicron, but demand robust
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[February 16, 2022]
By Byron Kaye and Arundhati Dutta
SYDNEY (Reuters) -Australian
biopharmaceutical firm CSL Ltd said first-half profit fell as the
Omicron COVID-19 outbreak stopped people giving blood plasma, the core
of its treatments, but declared a return to pre-pandemic collections,
sending its shares soaring.
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The vaccine unit of Australia's biggest biotech firm has benefited
from heightened demand for inoculations amid the pandemic, including
for the AstraZeneca Plc coronavirus vaccine it makes in Australia.
But most of its profit comes from selling blood plasma treatments
for rare diseases.
"We anticipate a return to pre-pandemic collection levels," CSL
chief executive Paul Perreault told reporters on a call on Wednesday
after the earnings were released.
"The underlying demand for these products is still quite robust. The
problem is the raw material."
The company's shares were trading up 7% by mid-session, their
biggest intraday gain since March 2020, helping push the broader
market up 0.5%. The former Australian government laboratory is now
the country's fourth-largest company by market capitalisation.
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The interim result "exceeded our forecasts and consensus
expectations", said RBC Capital Markets analyst Craig Wong-Pan in a
client note.
Jefferies analysts noted that CSL stuck to previous guidance of a
full-year profit between $2.15 billion and $2.25 billion, down from
the previous year's $2.38 billion. But it said the guidance now
factored in $90 million to $110 million of costs to buy Swiss
drugmaker Vifor Pharma AG, implying a 5% upgrade in earnings to
offset those costs.
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In the first half, net profit fell 5% to $1.72
billion on a constant currency basis, the
company said, declaring an interim dividend of
$1.04 cents per share, same as last year.
The pre-tax profit contribution from its plasma
unit fell 22%, while profit from its vaccine division jumped 24%.
Since the same period a year earlier, the profit contribution from
the company's vaccine unit has risen from 30% to 40%.
CSL has reported continuous disruption with plasma donations since
the pandemic began. It said it had sought to offset the collection
downturn by raising the fees it pays its donors - most of whom are
in the United States - opening new centres and amping up its
marketing.
The turnaround in collection volumes had started since the company
took a more assertive approach in April 2021 but would not
immediately be reflected in profits because of the lengthy time to
convert the plasma into treatments, CEO Perreault said.
(Reporting by Byron Kaye in Sydney and Arundhati Dutta and Yamini C
S in Bengaluru; Editing by Shinjini Ganguli and Kenneth Maxwell)
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