By Roushni Nair and Byron Kaye
SYDNEY, Feb 11 (Reuters) – CSL Ltd on Wednesday reported an 81% drop in first‑half profit, knocked by weaker blood plasma product and vaccine sales and one-off charges, a day after CEO Paul McKenzie stepped down, sending its shares plummeting to an eight-year low.
The Australian biotechnology giant named long‑time insider Gordon Naylor as interim chief after markets closed on Tuesday, announcing the surprise retirement of McKenzie.
Its shares plunged as much as 18% in early trade to A$150.23, their lowest since April 2018. The drop marked their steepest intraday fall on record and made it the biggest drag on the benchmark, which rose 0.6%.
CSL’s slump underscores the mounting pressure on one of Australia’s biggest and most widely-owned stocks, long prized as a dependable global growth outperformer on the back of its rare-disease treatments.
A softer earnings print, a large impairment tied to weaker expectations in acquired units, and an abrupt CEO change are now forcing investors to reassess how quickly the biotech giant can restore momentum, particularly as its core plasma business struggles to meet forecasts.
“I’m not prepared to accept that we can’t do better,” interim chief Naylor said on an analyst call, adding that the company’s vaccine unit is facing an “extraordinarily difficult” U.S. market.
CSL flagged it would take about $1.1 billion in after-tax impairments for the current fiscal year, including restructuring costs, with most of it booked in the first half. A large part of the charges are tied to cutting the value of intellectual property at its iron‑deficiency and kidney medicines unit Vifor and its vaccines business Seqirus.
Naylor said the company remained focused on its blood plasma products unit, its biggest earner, noting that “this is where the greatest opportunity lies”.
CSL reported net profit after tax of $384 million for the six months ended December 31, down from $2 billion for the period a year earlier. The result missed expectations, analysts said.
The shortfall was driven by CSL Behring, the group’s plasma business, where revenue lagged forecasts as immunoglobulin sales slipped 6% and albumin sales dropped 27%, hit by new price caps in the U.S. and policy changes in China.
It also moved to expand its ongoing share buyback by $250 million in a bid to signal balance‑sheet strength and reassure markets.
However, brokerage Citi said investors were likely to focus instead on whether the company can deliver the sharp turnaround implied in the second half.
CSL reaffirmed its full-year outlook, forecasting modest revenue growth and mid-single-digit growth in underlying profit, excluding one-off costs, despite the softer first half.
The company cautioned that Seqirus will contribute less in the second half due to influenza seasonality and the loss of last year’s avian flu windfall, while ongoing generic competition is set to keep Vifor earnings subdued.
Analysts at Citi said that leaves little margin for error, noting that Seqirus typically contributes little to second-half earnings and Vifor continues to face pressure from generics, leaving Behring to “do most of the heavy lifting” if guidance is to be met.
(Reporting by Roushni Nair and Sherin Sunny in Bengaluru and Byron Kaye in Australia; Editing by Alan Barona and Sonali Paul)
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