CSL first glance

In absolute terms, a very strong result, but still looks like FY24 is a little light on relative to consensus, $2.9bn-3bn vs street at $3.02.

Since plasma collections improved with the end of the COVID pandemic (recall that borders were closed, making it hard to collect plasma, and with such generous unemployment benefits, many people didn’t want to donate, forcing CSL to raise the price it paid for donations), IVIG production has recovered, improving sales and unit economics.

CSL also point to ongoing efficiencies to improve the yield, which supports margin. I did enjoy this SoftBankesque diagram. Arguably much more credible, but still, up and to the right.

Vifor has now been held for 11 months and appears to be growing well, with synergies on track. Overall, management commentary seems sufficiently pleased.

Deep down, the market is also likely still suspicious on the investment rationale of Vifor, for what it implies about the rest of the CSL franchise.

Does CSL see risk from competing products/new-therapeutics in CIDP (e.g. FcRn) that might make the overall IVIG franchise less valuable, and hence went looking for M&A to diversify the business?

If so, why make such a large acquisition for a company where one of the key products is about to face generic label competition?

CSL management were sanguine enough about FcRn, and didn’t see it as much of a risk, even if the product worked, given customer satisfaction and health outcomes associated with IVIG treatment of CIDP.

And the follow up question, with a similar enough answer.

Overall, new therapeutics from CSL continue to come to market, and we think the CSL growth trajectory remains strong. However, the market is unlikely to like the small shortfall in guidance.

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