CSL share price: Plunging US vaccination rates ravages Australian global pharmaceutical giant on ASX

CSL, the Australian global pharmaceutical giant, has been hit by declining vaccinations in the US under President Donald Trump and cuts to government spending on blood products in China.

CSL shares fell 15 per cent, costing shareholders $15 billion, in early trade today after chief executive Paul McKenzie said profits this financial year would rise 4 to 7 per cent. The Melbourne-based company previously expected profits to grow as fast as 10 per cent. The revenue growth forecast was halved.

As of 10.30am, CSL on the ASX has dropped to $179.81.

Mr McKenzie blamed a forecast 12 per cent decline in US flu vaccination rates this year, a drop scientists attribute to a shift in attitudes towards the flu during the COVID-19 pandemic and misinformation about vaccines.

In February, the Trump Administration halted a vaccination advertising campaign run by the Centres for Disease Control and Prevention, although the president received a flu and COVID-19 vaccine during an annual check-up two weeks ago.

Government budget savings in China was reducing demand for albumin, a drug used to treat blood loss, the company said.

CSL plans to save more than $500 million over the next two years by cutting back on research, merging teams working on two popular drugs and reducing head-office costs.

“We had become disproportionately complex and we are taking steps to simplify and streamline our business,” Mr McKenzie told shareholders at the company’s annual meeting in Melbourne. “These are difficult but necessary decisions to position us for the long term.”

Once regarded as an Australian success story for generating huge sales of plasma and other medical products around the word, for the past five years CSL has been seen as a lumbering bureaucracy unable to develop new blockbuster products.