MENU

Why the CSL Limited share price just hit another record high

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.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Andrew Chen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.