After early budget woes, flu-shot expert Seqirus swings to its first-ever profit

Former CSL CFO Gordon Naylor took the reins of flu vaccine unit Seqirus after the unit's formation in 2015. (Seqirus)

During an “intense” time of year for Seqirus—as characterized by the CSL unit’s president Gordon Naylor—the company can take a moment to appreciate that, after three years, it has swung to profitability. 

Seqirus started in 2015 when Australia’s CSL purchased Novartis' flu vaccine offerings and combined that business with its own bioCSL. During the unit’s first year in business, Seqirus lost $245 million, according to a spokesperson.

But in newly released results for fiscal 2018, which ended June 30, Seqirus posted a profit of $52 million on total sales of $1.09 billion. 

The results come as Seqirus ramps up production for the 2018-2019 northern hemisphere flu season, having just shipped its first doses. Naylor said this time of year is intense as Seqirus’ commercial, quality and manufacturing teams work together closely to ensure that millions of flu vaccine doses make it to the public. 

During the three years of Seqirus’ existence, the company has significantly boosted production at the Holly Springs, North Carolina, plant inherited in the Novartis buy, without extra staffing or investment, Naylor said. The company makes its cell-based Flucelvax Quadrivalent vaccine at the plant and has taken production from 3 million doses per year to an estimated 20 million doses for this season.

In another big development for the company, the FDA on Thursday approved a new manufacturing process that’ll allow Seqirus to double production at the site to about 40 million doses for the 2019-2020 flu season.

To work on improving its profitability, Seqirus has shifted its focus from older trivalent flu vaccines to the cell-based quadrivalent Flucelvax and Fluad, an adjuvanted flu vaccine for people 65 and older. This season, Fluad is the only approved flu vaccine for people 65 and older in the U.K. 

In CSL's fiscal 2018, quadrivalent flu sales jumped 109% over 2017's figure to $341 million, while sales for adjuvanted shots increased 142% to $138 million. All told, flu vaccine sales increased 53%, according to the company. 

As industry watchers know, traditional egg-based flu vaccines have experienced efficacy problems in recent years, and experts are looking to determine whether cell-based options can provide better protection. Initial research has documented better efficacy for the alternatives. Naylor said Seqirus' new manufacturing process that aims to provide twice as many cell-based flu shots—plus potentially better efficacy—positions the company well to respond to flu vaccine efficacy problems.