CSL says it expects growth to continue for the year ahead after announcing 8.2 per cent growth in revenue for the past year.
According to CEO Paul Perreault, the company's net profit after tax is expected to grow at around 11 per cent, at constant currency, for the year head after adjusting for the impacts associated with the acquisition of the Novartis flu vaccine business.
Full-year revenue of $6.1 billion for FY2016 was highlighted by 10 per cent growth in sales reported by CSL Behring, including almost $1.5 billion in immunoglobulin product sales, up 11 per cent at constant currency.
The key growth driver was HIZENTRA, CSL Behring’s subcutaneous immunoglobulin product - demand has been strong in both the US and Europe, with sales growth of 31 per cent.
Demand for intravenous immunoglobulin has also been solid, led by PRIVIGEN, which delivered sales growth of 7 per cent. PRIVIGEN is manufactured for export at the Turner Manufacturing Facility in the Melbourne suburb of Broadmeadows.
CSL completed the acquisition of the Novartis flu vaccine business in 2015, integrating it into bioCSL and changing that company’s name to Seqirus, which is now the world’s second largest flu vaccine manufacturer.
As a result, it reported a significant jump in flu vaccine sales, up from US$412m in 2015 to US$652m, but costs associated with the acquisition and its integration impacted the company's earnings. Sales of flu vaccine were also lower than expected due to the more mild flu season, said the company.
The company's net profit for 2016 of $US1.24 billion, down 10 per cent compared to the previous year, would have been up 5.2 per cent to $US1.47 billion excluding the impact of costs associated with the flu vaccine business.
“The Seqirus business turnaround program is now well underway," said Mr Perreault. "The transition to quadrivalent influenza vaccines has commenced, we’ve increased production from our unique cell culture facility and we received approval and launched our differentiated adjuvanted influenza vaccine, FLUAD. Notably, we were the first manufacturer to have an influenza vaccine released in the US market for its upcoming flu season.”
CSL reported $120 million in royalties related to sales of HPV vaccines, up 14 per cent in constant currency, although total revenue from its intellectual property segment was down 10 per cent.
Commenting on the company's outlook, Mr Perreault said: “At the core, CSL is a growing, broadbased, stable business which generates solid earnings growth. We are igniting this growth with innovative biotechnology advancements, including our newly approved and launched novel recombinant therapies IDELVION and AFSTYLA. Ongoing demand for our CSL Behring therapies is expected to continue, with ongoing strong performance in differentiated products such as HIZENTRA. Our range of specialty plasma products is again expected to grow strongly.”
Mr Perreault also said the company plans to raise around $500 million through a private placement in the US. He said it would also consider a further $500 million share buyback program following completion of its current $1 billion buyback later this year.
The company also announced the appointment of Dr Tadataka 'Tachi' Yamada KBE as a Director of the Company, effective 1 September. Mr John Akehurst has indicated his intention to retire from the CSL Board of Directors at the conclusion of the Company’s Annual General Meeting in October.
Dr Yamada is presently a Venture Partner at Frazier Healthcare Partners, a leading provider of growth capital to healthcare companies, a position that he has held since 2015. Prior to this, he was the Chief Medical and Scientific Officer at Takeda Pharmaceuticals, as well as a member of the Board. Dr Yamada has held a range of leadership positions in the health sector, including as President of the Bill & Melinda Gates Foundation Global Health Program and Chairman of R&D at GSK.
“I am delighted that we have been able to appoint a person with such deep industry knowledge and extensive international experience. I am certain that his knowledge and insights will be of benefit to CSL as we enter the next exciting phase in the Company’s future,” said CSL’s Chairman, Professor John Shine AO.