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CSL wins contracts

CSL Limited‘s (ASX: CSL) bioCSL branch has been busy this week. The company issued back-to-back releases announcing new vaccine distribution contracts and its re-entry into influenza vaccine production for Australia. Here’s what you need to know.

On Monday, CSL notified shareholders that the company has successfully won two contracts (one with New South Wales Health and one with the Western Australian Department of Health) to “provide storage and distribution services” for each government’s vaccine programs.

With a combined value of $6.8 million, the announcements aren’t massive market movers by themselves, but they might serve as signals for additional (and potentially much larger) government contracts to come.

BioCSL will work with West Australia under a three-year contract, while its partnership with New South Wales will last for two years. “bioCSL is pleased to be able to support the secure supply of important vaccines under the National Immunisation Program, helping protect the health and wellbeing of Australians,” said VP of Operations Stephen Marlow in a statement.

On Tuesday, bioCSL announced that it’s back in the influenza production business after Australians upped their demand this season. In the first two weeks of April alone, General Manager Dr. John Anderson noted significant demand jumps in both public and private markets. bioCSL was revamping its vaccine in preparation for the Northern Hemisphere season when the demand spike pushed the company to refocus efforts on local markets.

The company expects to have additional doses ready by June, which will be distributed first and foremost to age-appropriate at-risk groups. Currently, CSL maintains a unique geographic advantage as the only influenza vaccine manufacturer in the Southern Hemisphere. “Restarting production of Southern Hemisphere influenza vaccine is a significant undertaking, but as Australia’s only on-shore manufacturer we are committed to responding to local needs,” said Anderson in a statement.

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The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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