By David Swan
CSL boss Paul McKenzie says his company will learn much from its costly failed trial in the development of a heart attack treatment as investors sent its shares lower for the second day in a row.
Shares in Australia’s largest health company fell 3 per cent on Tuesday, taking its losses over the past two days to 7.7 per cent, after it announced on Monday a major setback in the development of one of its drugs, CSL112, which was being developed to prevent repeat heart attacks.
CSL chief executive Paul McKenzie.Credit: Eamon Gallagher
The drug did not effectively deliver its desired result after 90 days, the company admitted, and saw more than $7 billion of its market value wiped out as a result.
Presenting the company’s half-yearly financial results on Tuesday, McKenzie said the company would still reap benefits from the years-long trial despite the failed outcome.
“We learned a lot in this trial and just how to execute an unbelievable trial,” McKenzie said in an interview.
“So we’re going to take some of that learning with how we interact with clinical trial investigators and how we follow up [with patients] so it becomes institutionalised across all our trials. That’s a real positive.”
“You also learn on the science side. Obviously, there’s a lot more data analysis to go, a lot of conversations with key opinion leaders, a lot of conversations with regulatory agencies around what did we learn and is there enough curiosity from a scientific viewpoint to consider something else. So time will tell.”
While the clinical outcome wasn’t what CSL was hoping for, McKenzie said the study had been well-designed and well-executed. CSL said it had excluded any financial contribution from CSL112 in its forward-looking earnings estimates and did not expect any material financial impact after the study ended.
For the half-year to December 31, CSL booked revenue of $US8.05 billion ($12.3 billion), up 11 per cent year-on-year, while net profit soared 20 per cent to $US1.94 billion.
The company reaffirmed its full-year net profit forecast of US$2.9 billion to US$3 billion and declared a first-half dividend of $US1.19 per share, up 12 per cent on the same time a year earlier.
McKenzie singled out CSL’s Behring unit for “exceptional performance”. CSL Behring operates CSL Plasma, one of the world’s largest plasma collection networks, with more than 12,000 employees globally.
Its history dates back to 1904, when Behringwerke was founded in Germany by Emil von Behring. “CSL Behring is a unique and resilient business with a strong growth outlook, and my first 12 months as the CEO has only reinforced that view,” McKenzie said.
The century-old company played a critical role in manufacturing vaccines during the COVID-19 pandemic and its share price soared as a result, climbing to all-time highs in early 2020. Its vaccine arm, CSL Seqirus, posted revenue of $US1.8 billion on Tuesday – up 2 per cent – while its CSL Vifor unit posted revenue of $US1.01 billion.
The CSL Behring segment in particular was a strong performer with revenue and gross profit exceeding expectations, RBC Capital Markets analyst Craig Wong-Pan said.
“[But] both Seqirus and Vifor revenues and gross profit were disappointing and missed expectations,” Wong-Pan said. “We think the market will view this as an in-line result, although with a different segment composition than they expected.”
McKenzie, who has just passed 12 months in the top job, said AI had quickly become a key driver of productivity for his own role and CSL more broadly.
“We’re an early adopter of Microsoft Copilot, which is amazing,” McKenzie said. “It’s actually quite helpful, if I have a one-on-one, it can send me a summary of everything we discussed, we’ve started using it for meetings.
“I just think it’s going to be unbelievable in terms of business productivity.”
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