The CSL Limited (ASX: CSL) share price is climbing higher today on news that the global biotech giant will be building a manufacturing facility in Australia.
The CSL share price kicked off the day reaching as high as $315.85. However, before the ASX experienced a technical glitch which halted market trade, CSL shares slightly retreated to $315.04, up 1.8%.
What is driving the CSL share price?
CSL advised that its subsidiary, Seqirus, plans to invest more $800 million in the construction of an influenza vaccine manufacturing facility.
Based in Melbourne, the state-of-the-art factory will produce and supply flu vaccines to Australia and the rest of the world. The decision follows a deal with the Federal Government for a range of life-saving treatments to the Australian population for over 10 years. This includes anti-venoms for Australian snakes, spiders and marine creatures, and influenza pandemic protection.
Under the terms of the deal, the Morrison government will contribute $1 billion over 12 years along with CSL's Seqirus investment. The Victorian Government is also expected to commit to the project but has yet to announce a support package.
The new facility will be built at a site in the Melbourne Airport Business Park, with construction to start in 2021. Housing innovative cell-based technology to produce these critical vaccines, CSL will also manufacture Seqirus' MF59 substance. The latter is a formula that is added to improve immune response and reduce the amount of antigen needed for each vaccine.
Final completion is projected to be around mid-2026, with the facility becoming fully operational.
What did the head of CSL say?
Commenting on the opportunity, CSL CEO and managing director Paul Perreault said:
Providing safe and effective influenza vaccines is essential in securing our defences against serious public health threats.
The facility will be an important addition to our global influenza manufacturing supply chain, incorporating the technology platform used in our Holly Springs, North Carolina facility. Cell-influenza vaccine technology offers many advantages over the existing process including being more scalable and offering faster production – particularly important in the case of influenza pandemics.
As a proudly Australian company, we are pleased to make this investment in world- class advanced manufacturing. This decision will ensure the future of 1,000+ Science Technology Engineering & Manufacturing jobs in Victoria and a supply chain of more than $300 million annually.
About the CSL share price
The CSL share price has been on a mini-rollercoaster ride over the past 6 months. Besides reaching today's new high since May, shares in the biotech company have been up and down alongside COVID-19 and economic impacts.
As Australia largest company, CSL has a market capitalisation of $143.3 billion and a price-to-earnings (P/E) ratio of 68.2.
