CSL Announces the Development of a New Manufacturing Facility

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CSL Announces the Development of a New Manufacturing Facility

  • The new facility will be built in Melbourne
  • Influenza vaccines, as well as anti-venin will be produced
  • Further cements the robust positioning of the group

CSL Limited (ASX:CSL) announces the development of a next-generation vaccine and anti-venin manufacturing facility, due for construction in Melbourne. The development, through a wholly owned subsidiary, Seqirus, anticipates an investment of more than A$800 million for the construction of the facility, for the supply of influenza vaccines in Australia and the world. The announcements follows an agreement made with the federal government, in which the government will purchase vaccines, anti-venin and Q-Fever vaccines for 10 years. These serums will be delivered to the Australian population. The Victorian government is also contributing to the development of the facility.

The manufacturing facility will be constructed in the Melbourne Airport Business Park, using cell-based technology to develop influenza vaccines for seasonal and pandemic purposes. CSL anticipates construction to begin in 2021, with a operational date around the middle of 2026. In addition to producing influenza vaccines, Seqirus’ MF59 will also be developed. This is a substance added to certain formulas to enhance immune responses and decrease the volume of antigens required for vaccines.

Commenting on the announcement, CSL CEO and Managing Director, Paul Perreault states the importance of providing safe and efficacious vaccines for the population. Moreover, the CEO emphasises the critical nature of the facility in the company’s influenza manufacturing supply chain. In conjunction with this, the cell-based nature of the technology provides CSL with a unique process possessing several key advantages, as it is inherently more scalable and is more quickly produced. On another positive note, the creation of the facility will create more than one thousand Science Technology Engineering and Manufacturing jobs in Victoria, with a A$300 million dollar per annum supply chain.

The announcement is highly positive and further cements the position of CSL as a leading provider of health solutions to Australians and the rest of the world as well. The state-of-the-art facility in Melbourne will enhance the company’s ability to facilitate the provision of influenza vaccines to Australia, allowing for enhanced streamlining of processes and the supply chain. As opposed to sourcing influenza vaccines from other sources, they will be acquired from a domestic producer. Moreover, the introduction of this manufacturing centre will further enhance the financial position of the company, while also providing substantial levels of employment.

Considering this, the prospectus for the company appears quite positive. Having secured distribution to several Covid-19 vaccine candidates as well, CSL’s operations moving forward are driven by highly promising activities. Taking a longer-term view, the announced development will compound upon this, further promulgating the strong position of the group in the near future.

Caroline Wong

Caroline Wong is a Research Analyst at KOSEC – Kodari Securities. She writes on markets and focuses on ASX Top 300 companies. Email Caroline at c.wong@kosec.com.au.

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