Csl Expects Revenue to Ascend On Plasma Sales, Swine Flu Vaccine
Net income will probably be between A$1.16 billion ($960 million) and A$1.26 billion in the year ending June 30, based on the average value of the Australian dollar against the U.S. dollar, euro and Swiss franc last year, CSL said today. Based on current values for those currencies, net profit may be between A$1 billion and A$1.1 billion, the Melbourne-based company said.
CSL predicts earnings will rise as more patients switch to Privigen from a less profitable, older product. The company is more than tripling Privigen production to 10 million grams from 3 million grams last year, Chief Executive Officer Brian McNamee said on a conference call. It also expects to book about A$300 million in sales of its vaccine against the H1N1 pandemic flu virus, he said.
“You really cant fault the underlying business in terms of the way theyre performing,” said Don Williams, who helps manage A$1.25 billion, including about A$30 million of CSL shares, as chief investment officer at Platypus Investment Management Ltd. CSL isnt unique among health-industry stocks to be affected by currency fluctuations, Williams said by telephone from Sydney today.
CSLs net income rose 63 percent to A$1.15 billion in the last fiscal year, exceeding the A$1.09 billion median of six analyst estimates compiled by Bloomberg in the past four weeks. Sales gained 32 percent to A$5.04 billion.
CSL fell 1.3 percent to close at A$33.12 in Sydney trading, while Australias S&P/ASX 200 Index declined 0.2 percent.
Higher Payout
The company declared a final dividend of 40 Australian cents a share to be paid on Oct. 9. That takes the total payout for the year to 70 Australian cents, a 52 percent increase from the previous 12-month period, it said.
CSL saw “vigorous growth” for Privigen last year, which had its first full year of sales in the U.S. after gaining approval in February 2008.
“Global demand for plasma therapies continues to be robust,” McNamee said in a statement. Sales of CSLs plasma products will rise about 12 percent in the current 12-month period, based on last years average exchange rates, he said.
CSL gets plasma, the watery liquid in which blood cells are suspended, from a network of blood collection centers. Doctors use plasma-based products such as Privigen to treat diseases in which immune cells attack the nervous system.
Deerfield, Illinois-based Baxter International Inc., the market leader in blood-disorder treatments, last month raised its full-year profit forecast after second-quarter earnings beat analyst estimates.
A weaker Australian dollar contributed A$156 million to net income, said the company, which gets about 85 percent of sales outside its home country. The currency declined 17 percent on average against the U.S. dollar in the year ended June 30.
The Australian dollar, currently at 82.4 U.S. cents, is forecast to strengthen to 84 U.S. cents by the second quarter of next year, according to the median of 38 estimates compiled by Bloomberg.
“It is tough for a lot of businesses to prosper in an appreciating Aussie dollar environment,” McNamee told analysts. “You feel as if youre a little plant trying to grow under a pine tree.”
Royalties, Own Products
Royalties from Merck & Co.s cervical cancer vaccine Gardasil fell 3.6 percent to A$161 million. Sales of the vaccine in Australia and New Zealand dropped 19 percent to A$185 million. Revenue from the vaccine is likely to “substantially decline” as an Australian government program to inoculate girls and women comes to a close, CSL said.
“Over the longer term the company intends to develop new products which are protected by its own intellectual property and which are high margin human health medicines marketed and sold by the companys global operations,” CSL said.
CSL, the Southern Hemispheres only flu vaccine maker, expects preliminary results on the first dose of its swine flu vaccine next week, Rachel David, a company spokeswoman, said by telephone yesterday. No severe adverse reactions have been observed so far, and the company plans to submit the data to the Australian government on Sept. 4, she said.