CSL's Vaccine Division Spin-off: Delays Amid Falling US Flu Immunization Rates

CSL, one of Australia's top biotech firms, has revised its profit forecast downward and postponed the spin-off of its vaccine division. The revisions come in the wake of an unprecedented drop in U.S. flu immunization rates, a situation that has slashed its shares by 16.6%, hitting a seven-year low. During CSL's annual meeting in Melbourne, frustrated investors also voted against executive pay packages for the second consecutive year, although the board remained intact after a spill motion failed.

In August, CSL announced plans to demerge its Seqirus vaccine unit and make it a separate entity listed on the Australian Securities Exchange by June next year. These plans now stand shelved due to what the company calls 'heightened volatility' in the U.S. market, which expects a 12% decrease in vaccination rates this winter season. The U.S. policy shifts under Health Secretary Robert F. Kennedy Jr., who has cut vaccine research funding and made significant changes at the Centers for Disease Control and Prevention, contribute to this situation.

In response to these challenges, CSL has trimmed its full-year revenue growth forecast to 2% to 3%, down from a previously predicted 4% to 5% for the financial year ending June 2026. Annual net profit expectations were also reduced. Amid these developments, CSL's share prices hit their lowest since December 2018. The delays in the demerger plan are seen as CSL's effort to ensure conditions are right for maximizing shareholder value in the future.