Alongside the U.S. government’s overhaul of the federal vaccine infrastructure, influenza vaccination rates in the country have plummeted below the expectations of a key player in the space. That company, CSL, is now delaying a move to part ways with its vaccine business as a result.
Oct. 28, at its annual general meeting in Australia, CSL’s chairman Brian McNamee and its CEO Paul McKenzie provided investors with an update about the company’s intent to separate out its vaccine division, CSL Seqirus. In August, the company announced its intention to spin off the division into a publicly traded firm on the Australia Stock Exchange by next June, but, now, that will not happen as planned.
In prepared remarks (PDF) to investors, McNamee explained that “heightened volatility in the current US influenza vaccine market” has caused the company to conclude its “previously proposed demerger timing will not fully capture Seqirus’ value potential.”
“Timing will be revisited when we are confident that market conditions would support the maximisation of shareholder value,” McNamee added, according to the prepared remarks.
Citing insurance claims data, CSL’s leaders said that they expect this season's flu vaccination rates in the U.S. to decline by 12% overall and by 14% for people ages 65 and older compared with last year.
The precipitous drop has prompted the company to forecast a mid-teens-percentage revenue decline for its Seqirus unit in the current fiscal year. Across the board, the vaccine woes and other factors caused CSL to lower both its revenue and profit outlook for the fiscal year, which ends in June 2026.
CSL investors sent the company’s share price down by nearly 16% Tuesday in response. The firm is now trading at a seven-year low, according to Reuters.
In addition to the share-price plunge, investors also rejected CSL’s proposed executive pay packages for the second straight year, Reuters added.
About two months ago, CSL unveiled plans for the CSL Seqirus spinoff as part of a companywide reorganization aimed at cutting thousands of jobs. With the cost cuts, CSL said it aimed to save $500 million to $550 million progressively over the next three years.
CSL's decision to delay the spinoff comes at a time of uncertainty for vaccine companies that are active in the U.S. marketplace. Under Secretary Robert F. Kennedy, the Department of Health and Human Services has removed a prominent vaccine regulator, overhauled an influential advisory committee and raised doubts about mRNA vaccine technologies. Besides those disruptions, this year has also seen tumult and high-profile leadership switches at the Centers for Disease Control and Prevention.
A look at the share prices of prominent vaccine makers shows that most are flat or down over a one-year span.