With the former Novartis ($NVS) flu vaccine unit in hand, CSL has big plans for its newly formed Seqirus unit. But it’ll be a bumpy path toward reaching its goals, as the company reported Tuesday that the Novartis business posted a $205 million loss for the 2016 fiscal year.
Seqirus--formed from the joining of the Novartis business and CSL’s bioCSL unit last fall--posted sales of $652 million for the 11 months following the deal close late last July. In its earnings announcement, CSL said a mild flu season negatively impacted sales. But the company stressed the “business turnaround program remains on track.”
Losses from the former Novartis biz dragged on CSL’s overall results, pulling profit down 10% to $1.24 billion and initiating a 5% share slide that wiped $2.5 billion off of the company’s value, according to the Australian Financial Review. But that’s compared to a $10 billion increase in value over the last year, the newspaper reported.
Currently the second largest provider of flu vaccines, Seqirus trails French pharma Sanofi ($SNY) in the space, but execs have said they’re aiming for “industry leadership” in 5 to 10 years by moving into quadrivalents, launching Fluad and growing sales in emerging markets.
In those areas, the unit has gathered momentum since its October formation. In May, the company won approval for its Flucelvax Quadrivalent flu vaccine, joining Big Pharma competitors Sanofi, AstraZeneca ($AZN) and GlaxoSmithKline ($GSK) in that market. That followed a December nod for Fluad, the first publicly available adjuvanted flu vaccine in the U.S., and a shot picked up from Novartis. The FDA approved that vaccine for people 65 and older.
Despite that progress, the company says it expects the unit to post a loss for the upcoming fiscal year and break even in 2018. In speaking about the results, CEO Paul Perrault called the unit a “big turnaround,” adding that “it's not a straight line--it's a hockey stick really,” according to the AFR.
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