By Rebecca Thurlow
SYDNEY-- CSL Ltd., Australia's largest pharmaceutical company,
warned rising competition in the blood-plasma-therapies market will
crimp its full-year earnings growth, after its first half profit
missed market expectations.
The blood-products-and-vaccines maker has been expanding
globally in recent years, making acquisitions and taking advantage
of difficulties faced by rivals -- such as product recalls and
plant closures -- to boost its own sales. Those easy market-share
gains are set to slow, as rivals including Baxter International
Inc. open new facilities and overcome supply constraints.
"We expect that global demand for plasma therapies will continue
to grow, but the market will become increasingly competitive, with
new competitors and new products," said Chief Executive Paul
Perreault.
CSL said Wednesday its net profit in the six months through
December rose 9.1% to US$705.0 million in constant currency terms,
below the US$711.1 million median of four analyst forecasts
compiled by The Wall Street Journal. Revenue from the sale of
immunoglobulin products, used in treating immunity conditions,
slowed.
The company, which operates in more than 20 countries and
generates most of its revenue outside Australia, now expects net
profit this financial year to rise by about 10% in
constant-currency terms, down from a 12% rise flagged by management
in August.
CSL shares initially fell nearly 10% on the result, hitting a
low of A$81.48, before recovering slightly to be down 7.8% at
A$82.99 in late trading. Broker Citi recommended selling CSL
following the result.
"Multiple competitive threats could see CSL lose market share
through financial year 2015 and financial year 2016 in its
immunoglobulin franchise and its hemophilia franchise," the broker
said. Immunoglobulin is essentially pooled antibodies from healthy
blood donors which are used to treat patients with serious immune
deficiencies.
The company said first-half sales rose 8.3% to US$2.8 billion in
constant currency terms. Sales of immunoglobulin products grew 5%
in constant currency terms, driven by ongoing demand for Hizentra,
a subcutaneous immunoglobulin treatment, in the U.S. and Europe.
Subcutaneous immunoglobulin products use a small needle inserted
into the tissue just below the surface of the skin, rather than
into a vein, allowing them to be administered at home.
CSL's top-selling product is its liquid intravenous
immunoglobulin product, Privigen. Demand for Privigen was strong in
Europe where authorities expanded its allowed uses, however
increased competition reined in demand in the U.S. where sale
prices are higher, Mr. Perreault said.
CSL also makes and distributes vaccines, including for seasonal
flu, and receives royalties from Merck & Co. for the rights to
distribute a human papillomavirus vaccine, Gardasil, which it
helped to develop. Human papillomavirus can cause cervical cancer.
In October, CSL agreed to buy Novartis AG's influenza-vaccine
business for US$275 million.
Write to Rebecca Thurlow at rebecca.thurlow@wsj.com
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