‘Competitive advantage’: New flu vaccine research a focus for CSL
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Biotechnology giant CSL will focus on research into new vaccine technologies including mRNA influenza vaccines as it looks to further boost the value of its Seqirus business.
The $139 billion biotech told investors in its full-year report released on Friday that it would double down its research focus into technologies that look set to play a bigger role in the multibillion-dollar influenza market.
This includes cell-based flu vaccines, which use animal cells to grow flu viruses and take less time to make, as well as development of self-amplifying mRNA, the ‘next generation’ of the technology used to make the Pfizer and Moderna vaccines.
Locally produced vaccine vials coming off a Melbourne production at CSL’s Seqirus earlier this year.
The company said that successful innovation in areas like self-amplifying mRNA would deliver competitive advantages, while failure to capitalise on these new technologies would “diminish growth in this product sector”.
Seqirus generates just under $US2 billion of CSL’s $US9.98 billion in annual revenue, but its growth has been a major bright spot for the company. CSL bought out the Novartis influenza business for $US275 million in 2014 and conducted a swift and successful turnaround.
Revenues in the influenza business jumped 34 per cent due in 2021 due to strong demand for products, but CSL is aware of increasing competition in the flu vaccine space.
Messenger-RNA vaccines have risen in prominence throughout the COVID-19 pandemic and flu vaccines may one day use this technology. Meanwhile, other drugmakers like US firm Novavax are starting to consider the development of combined influenza and coronavirus vaccines.
CSL has been clear it does not intend to make its own COVID-19 vaccine at this stage, but management notes in the annual report that the company will be focusing on research and development to ensure Seqirus and its products keep up.
CSL says its mRNA research may lead to products that are more stable and effective than products already on the market.
“When administered, self-amplifying mRNA has the capacity to replicate (or amplify) itself. As a result, far less mRNA may be required in the vaccine formulation to generate equivalent antigen production and an effective immune response,” management explained in its annual report.
CSL spent $US1 billion on research and development in 2021 and this number is set to increase, with the business setting a spending target of between 10 and 11 per cent of annual revenue.
The business has become instrumental in Australia’s coronavirus vaccine rollout through its production of 50 million doses of the AstraZeneca vaccine. CSL has been involved in a number of COVID research projects, but the bulk of its R&D program has nothing to do with coronavirus.
A new cell-based influenza facility at Tullamarine and research hub in Melbourne’s Parkville biomedical precinct are set to open in the coming years.
The company’s research focus goes beyond Australia, with its 1700 scientists scattered across nine countries. A new research and development campus is set to open in Marberg, Germany next year, while the company is also expanding its research centre in California.
CSL chair Brian McNamee said in a letter to investors on Friday that while CSL has not been immune from the coronavirus pandemic, the board has full confidence in the company’s ability to grow moving forward.
Chief executive Paul Perreault will receive a total realised remuneration package worth $US45.3 million ($61.25 million) for steering the company through 2021. Long-term incentives which vested during the year make up the majority of these payments, coming in at $US42 million.
Shares closed up 0.1 per cent on Friday to $303.87.
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