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CSL sees strong flu shot demand, plasma collection challenges amid pandemic

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CSL sees strong flu shot demand, plasma collection challenges amid pandemic

CSL Ltd. said demand for flu shots surged amid the COVID-19 pandemic, while the outbreak created challenges for its plasma business.

Sales of CSL's influenza vaccine business Seqirus — which includes the cell-based vaccine Flucelvax and a shot targeted at the elderly called Fluad —increased 44% year over year during the six months ended Dec. 31, 2020, with a record more than 100 million doses sold in the Northern Hemisphere, the Australian biotechnology company said in its Feb. 18 earnings release.

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CSL CEO Paul Perreault
Source: CSL Ltd.

"COVID-19 has been responsible for driving high demand for influenza vaccines as governments around the world look to protect their populations from influenza so that the healthcare systems are not burdened or stretched further during the crisis," CEO Paul Perreault said in a Feb. 18 earnings presentation.

CSL posted a 44.9% increase in profit for the six-month period, and Perreault said he expects demand for the Seqirus unit to remain high even if the pandemic is brought under control thanks to the rollout of increasing numbers of COVID-19 vaccines.

"My hope would be ... we would at least be at the same level next year in terms of demand because ... as the COVID vaccines continue to roll out, they don't protect against influenza. And as people get out and start [interacting] more, I believe next year you'll see more to these than you saw this year in terms of influenza," he said.

Messenger RNA technology has reaped rewards in the race to produce a COVID-19 vaccine, and Perreault noted that CSL has an mRNA vaccine for influenza in preclinical development.

Pressure on plasma

Along with vaccines, plasma-derived treatments such as immunoglobulins and albumin, targeted at immune deficiencies, are another key focus area for the business. But lockdown and other restrictions during the pandemic stopped some people from donating plasma, while COVID-19-related hygiene measures added pressure on the cost per liter collected, Perreault said.

"I think immunoglobulin [supply] has been tight. In the past, CSL has been able to step in and really fill gaps for competitors ... created due to either lack of collections or manufacturing difficulties, and we're all in the same boat at the moment. So there's nobody that has enough inventory that can just come in and be the superhero of the day," he said.

As a result, CSL is limiting how many new patients it is signing up for its plasma treatments.

"I think there will be tightness in the market, and I think you've seen some of the reaction in terms of ... European pricing and tenders and things going up because it is a supply-constrained situation at the moment," the CEO added.

The amount of plasma collected in December 2020 was 20% lower than the same month previous year, Perreault said. Cost per liter of plasma, on the other hand, was up about 20% compared to the previous year, added John Levy, senior vice president of corporate finance and interim CFO.

However, experts suggested that an end to the current setbacks is in sight.

"While sales volumes are constrained near-term, we think the current headwinds are likely to be temporary as product demand is largely driven by chronic indications and CSL is on track to open 29 new collection centers in fiscal 2021," Mathew Hodge, director of investment research at management company Morningstar, said in a Feb. 18 report.

CSL opened 17 new plasma collection centers during the half-year ended Dec. 31 and plans to open another 12 before June. 30, 2021. The Melbourne, Australia-based company is also using digital technologies to make plasma donation easier for donors.

"We've adopted new technologies such as a donor app, mobile phone video consent and self-administered health history questionnaire kiosks. Usages of these technologies are growing and providing donors with a better user experience as they enter the centers. As the rollout of COVID-19 vaccines becomes more widespread, mobility is expected to increase and lead to more foot traffic at our collection centers," Perreault said.