CSL Limited (ASX: CSL) is a global biotechnology manufacturer that researches, manufactures and markets products to treat and prevent serious human medical conditions such as bacterial diseases and bleeding disorders.
CSL is operationally split into two divisions: CSL Behring and Seqirus. CSL Behring mainly focuses on the manufacturing and marketing of plasma products and research into plasma and non-plasma biotherapies. Seqirus is the second-largest influenza company in the world and focuses on supplying seasonal influenza vaccine.
CSL posted impressive results in FY17 with revenue increasing 15% to US$6.9bn and underlying net profit after tax increasing 24% to US$1.3bn on a constant currency basis. Breaking this down further, CSL Behring's revenue increased by 11.9% to US$6bn and Seqirus's revenue increased 23% to US$0.9bn.
CSL Behring
In FY17, there was strong growth in immunoglobulin sales as they increased by 16% on a constant currency basis. Immunoglobulins, also known as antibodies, are derived from plasma and administered to patients who need protection against bacterial and viral infections because their immune system isn't functioning effectively.
The growth in immunoglobulin sales was driven by sales growth in two popular immunoglobulin products: Hizentra sales increased by 10%, and Privigen sales grew 21%.
Also, CSL opened 28 plasma collection centres in the FY17 which adds to its already extensive network of plasma collection centres. CSL's network of plasma collection centres and fractionators means that CSL can increase production of immunoglobulins when demand for immunoglobulins spikes. CSL is currently the leader in the immunoglobulin market and its network of plasma collection centres and fractionators places it at a significant advantage in comparison to other plasma companies that often experience capacity constraints.
Seqirus
Seqirus is a division composed of CSL's acquisition of the influenza vaccine operations of Novartis and CSL's own influenza vaccine business. Although Seqirus's revenue grew by 23% in FY17, it has yet to break even, although management is forecasting that Seqirus will break even in 2018. This will likely be achieved as recent data released by the U.S. Food and Drug administration revealed that Seqirus increased its share of U.S. flu vaccines to 50% because of a severe flu outbreak.
