‘We bought companies twice our size’: How CSL became a global juggernaut and finds itself ‘standing tall’ in hometown

The blood products and vaccine giant has opened a new $2bn headquarters in Melbourne, which will also house an incubator for 40 biotech start-ups.

Brian McNamee says CSL’s new headquarters in Melbourne is more than just a building – it’s a centre to create the next big Australian biotech joining the blood products and vaccine maker at top of the ASX.

And Dr McNamee – who led CSL as its chief executive from 1990-2013 before becoming its chairman five years ago – wants there to be plenty more Australian biotech giants.

There is a joke within CSL that it is the biggest company that nobody has heard of. It has been tucked behind Melbourne Zoo – in earshot of the roars of lions and elephants – for 100 years, quietly creating a suite of life saving products that it sells across the world.

It now has a market value of $130bn – overtaking three of the big four banks – and was briefly the biggest company on the ASX, excluding BHP’s then London-listed shares.

But Dr McNamee said the company is now standing tall, literally. Its new $2bn headquarters – with its shiny black facade marked with CSL in red letters at the top, towers over Royal Parade at the gateway to Melbourne’s CBD.

Anyone travelling from Sydney Road will be hard-pressed miss it. But it’s more than just clever marketing. The building will also house an incubator for 40 biotech start-ups where CSL will share its knowledge of running crucial tasks such as clinical trials to building scale to take on the world.

“Drug development is seriously a complicated, highly specialised area where you need people who’ve done the hard yards,” Dr McNamee said.

“It’s very hard for someone who hasn’t done it to really understand all the important things that can go wrong in drug development. So it’s important having this depth of capability, critical mass and us standing tall – yeah, we are standing tall now at the top of the city.

“It’s more than just opening a building for us. It’s much more than that.”

Dr McNamee – who opened the new 18-floor headquarters on Monday with Anthony Albanese – said industries thrive in competition, with “world-class regulators”, industry and academic collaboration and full-scale capabilities.

“I would love to see more advanced manufacturing companies at the top of the ASX, another CSL. Multiple CSLs even. Because that means Australian companies take Australian skills, technology and innovation to the world.”

It is an aim that Dr McNamee knows is achievable. He can clearly remember his job interview for the CEO role at CSL – then known as Commonwealth Serum Laboratories – in 1989.

The new building that houses CSL’s global corporate headquarters in the heart of the Parkville biomedical precinct in Melbourne.

The company was a government-owned business that was founded during World War I when there was a need to deliver plasma to wounded soldiers on the battlefield. But in the subsequent decades the company was in desperate need of another three-letter world: TLC.

“Commonwealth Serum Laboratories was a very different thing – very tired, old facilities in Royal Park (behind the zoo) and really a bit of a confused business model an uncertain future,” Dr McNamee said.

“And we have been on a journey ever since. We’ve done a lot of really good things internationally, we do a lot of good things in Australia. This is now a huge step, in my view, for the company now to sort of signify not just its physical presence here in the centre of biomedical research in the Parkville precinct – but also that is our view of the future for us, medicine, science, in this community.”

But it was privatisation and CSL’s listing on the ASX in 1994 that sent the company on its successful trajectory.

“Privatisation enabled us to stand on our two feet but the reality was our future was very uncertain,” he said.

“We knew we had to go and do remarkably brave things. I mean, we bought companies twice our size. We had a very clear view and understanding of how to add value.

“We were very determined to succeed and we knew Australia was not enough. That’s what makes us different to many of the other government privatisation or other parties here where maximising the Australian market is sufficient for you to succeed. For us, it was a recipe for failure. We knew we had to be in America, Europe because clearly distance didn’t protect us.”

While CSL has now become big pharma, the sector has attracted criticism following several scandals during the pandemic, including a Pfizer executive being caught saying that his employer might be mutating dangerous viruses for profit.

Then there are those who have attacked the roll-out of Covid-19 vaccines, citing the speed at which a jab went from development to being injected into people’s arms.

“I think there is a lot of noise,” Dr McNamee said. “The bottom line is if you’re over 55 or 60, you know the vaccines helped.

“If you’re 20 to 35, you say ‘oh, I’m not sure I needed it’. I get that. There’s a bit of a bifurcation really that’s all. Respiratory vaccines are generally either for young babies or young kinds and more mature adults. That’s the reality for most respiratory vaccines and I think we will get back to that more normal understanding.

“Prevention is wonderful and a lot better than trying to fix a viral disease after you’ve got it.”

CSL boss Paul McKenzie with chairman Brian McNamee.

CSL will run the incubator in partnership with the Walter and Eliza Hall Institute, University of Melbourne, Royal Melbourne Hospital, the Doherty Institute and Murdoch Institute after it secured funding from the Victorian government’s $2bn Breakthrough Victoria Fund.

The Prime Minister said: “This magnificent facility will help position CSL to compete in the global marketplace. The work that CSL does right here will continue to be integral to Australians’ health and quality of life.”

CSL CEO Paul McKenzie said: “Our aim is to catalyse even more research, more development and ultimately deliver more products that can help people in serious need all over the world”.

“CSL is one of Australia’s most essential and successful biotech companies – and I am so pleased to be opening this world-class facility in Melbourne.”