‘Not infinite’: CSL unable to quickly flick switch on vaccine plans

Biotech giant CSL’s finances won’t be impacted by the shock overhaul of the federal government’s COVID-19 vaccine strategy but the company cannot shift its focus from making AstraZeneca doses to alternatives such as Novavax.

The $120 billion company said it will continue to make the AstraZeneca vaccine in its facilities in Melbourne, as part of an agreement with the federal government to produce 51 million doses in Australia.

Its commitment to AstraZeneca comes despite new federal guidance on Thursday recommending the use of the Pfizer vaccine over AstraZeneca for under 50s due to blood clot concerns.

A worker rolls a batch of AstraZeneca vaccines onto a truck at a CSL factory in Melbourne.
A worker rolls a batch of AstraZeneca vaccines onto a truck at a CSL factory in Melbourne. Credit:Getty Images

A CSL spokeswoman said the new vaccine advice from the government will not have an adverse effect on the biotech’s bottom line. Under the terms of the agreement between the federal government, AstraZeneca and CSL, the ASX-listed biotech will still be paid to produce the vaccine, even if the doses don’t end up being used.

“Our contract manufacturing arrangement with AstraZeneca does not have any material impact to the financials of the company. We remain very focused on fulfilling our commitment to the Australian government to provide the AstraZeneca vaccine to those Australians most vulnerable to COVID-19,” the spokeswoman said.

Australia has ordered 51 million doses of the Novavax vaccine but CSL cannot manufacture it locally at the same time as the AstraZeneca vaccine. In a hearing of the Senate select committee on COVID-19 last month, senior vice president of manufacturing at CSL’s vaccine arm Seqirus, Chris Larkins, said making Novavax required “a different process” compared to other vaccines.

“It would be quite technically challenging for us to do,” he said.

“I go back to the fact that we just couldn’t do them at the same time. As soon as we finish the [AstraZeneca], we are open to perhaps investigate doing other vaccines.”

Making the Novavax product in Australia would require significant re-tooling of CSL’s facilities. As part of CSL’s agreement to make the AstraZeneca vaccine onshore, the Australian government provided funding to the biotech to prepare its facilities.


Platinum Asset Management’s international healthcare portfolio manager Bianca Ogden, an early investor in mRNA vaccine maker Moderna, said the federal government needs to reconsider what it can do to kickstart local production of Novavax and other vaccines.

Potential measures could include the government providing additional support to CSL to update its facilities further. “You just have to put the capital behind it. It could be a public-private partnership,” she said.

Department of Health Secretary Dr Brendan Murphy said on Friday the government was in discussions with CSL about whether it could make other vaccines. It has also been in contact with smaller companies about their abilities to make vaccines after conducting an audit of national capabilities in August last year.

However, industry experts, with knowledge of local manufacturing, said at this stage there were no firm plans for local manufacturing of Novavax doses. US-based Novavax was contacted for comment.

CSL shares slumped 1.2 per cent to $262.80 on Friday, however, analysts are unfazed by the detour on vaccines from the federal government.

“The production of the AstraZeneca vaccine is expected to make only a modest financial contribution and this should be received irrespective of whether the doses are used,” JP Morgan analyst David Low said.

However, the country’s pivot to a new vaccine strategy has drawn the limits on CSL’s production capacity into sharp focus. Mr Low said while CSL was Australia’s most advanced sovereign manufacturer, it did not have endless scope for producing vaccines.

“CSL is the only [manufacturing] capability we have in Australia at scale, but it’s not infinite — that message became pretty clear when CSL was working with both the AstraZeneca and the University of Queensland vaccine candidates.”

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Source: Thanks smh.com