Months after its formation last fall, CSL's flu vaccines unit Seqirus is a loss-making entity. However, execs there believe the operation can achieve "industry leadership" in 5 to 10 years by relying on a move into quadrivalent vaccines, the launch of Fluad and emerging markets growth.
Today, the unit is in a "challenging situation" as it is losing money, President Gordon Naylor said in an interview with FierceVaccines. Naylor explained, "but the pieces are in place to turn the business around and to move toward that long term objective."
Formed from the combination of bioCSL and Novartis' flu vaccines unit, Seqirus will launch its adjuvanted flu vaccine, Fluad, in the U.S. in time for next year's flu season, Naylor said. Developed by Novartis, Fluad received FDA approval last December for adults over 65, becoming the United States' first approved adjuvanted flu vaccine.
"We think that Fluad will emerge to be one of the most important products in the sector," Naylor said, adding that Seqirus will ultimately market it to another group vulnerable to flu: children.Seqirus' president Gordon Naylor
The company will also look to a move toward its quadrivalent vaccines--with Naylor saying they'll likely be available in the U.S. in the coming months--to propel growth. Another area he thinks Maidenhead, U.K.-based Seqirus can develop is emerging markets.
"We think there is significant unmet need for influenza vaccines globally," Naylor said. "Today, the majority of vaccination actually occurs within wealthy, Western countries… that leaves a substantial portion of the population which doesn't receive the benefits of these important vaccines. We see opportunity there as well."
Currently, Sanofi is the world's largest flu vaccine provider. Sanofi ($SNY), GlaxoSmithKline ($GSK) and AstraZeneca's ($AZN) MedImmune market quadrivalent flu jabs.
With about 2,000 employees and manufacturing facilities in the U.S., U.K., Germany and Australia, Seqirus currently produces egg and cell culture trivalent flu vaccines for more than 20 markets.
CSL completed its Novartis flu vaccines purchase last July and combined the unit with its bioCSL to form Seqirus, which was branded in the fall. In the short term, the company needs to develop some infrastructure such as IT, Naylor said, because the purchase was "a carve out of a carve out."
Naylor, formerly CSL's CFO, says the parent company has a long history with integrations, and from this experience he knows that efficient supply chain operations can be a platform for growth. He said CSL "didn't make this acquisition in order to shut operations down," but that the company is conducting an examination of all operations, including the labor force, to maximize efficiency.
- here's a recent Seqirus investor/analyst presentation (PDF)