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Shares in Australian biotherapeutics giant CSL Ltd (ASX: CSL) slumped to a seven-year low this morning after CEO Paul McKenzie slashed growth forecasts for the company in FY26, largely due to a sharp decline in influenza vaccination rates in the US.
The shares hit a low of $176.01 – down almost 17 per cent – after the company revealed it was targeting revenue growth of 2 to 3 per cent for the year, down from 4 to 5 per cent previously.
CSL is also targeting NPATA growth of 4 to 7 per cent, down from 7 to 10 per cent previously forecast in constant-currency terms.
The share slump, which wiped almost $17 billion from the value of the company, has come on the heels of sharp falls in August after CSL announced plans to spin off its Seqirus influenza vaccine business into a separate ASX-listed entity by the end of the current financial year.
The move is part of a strategy to simplify CSL's business operations and deliver savings of more than $500 million to the group by FY28.
However, a drop in business growth by Seqirus has raised concerns among investors about the potential valuation of the business.
“As a company we’ve been in these situations before,” CSL chairman Dr Brian McNamee told shareholders this morning.
“We’ve seen periods of growth and faced periods of challenge, and we have come back stronger.
“The actions we are taking now will position CSL for its next chapter of growth.
“The reality is that for some time now CSL has been operating in a way that is too complex, and this has impacted our ability to react decisively to geo-political headwinds and to maintain our market position.”
However, McKenzie’s financial update sent ASX investors in the company towards the exit this morning.
“While the majority of the business is performing well, we are seeing two factors that impact our results in the first half of the financial year,” says McKenzie.
“In our Seqirus business, we have seen a greater decline in influenza vaccination rates in the US than we expected.
“This is despite a positive recommendation from the US administration on influenza vaccines and an unprecedented level of infection impacting public health.”
McKenzie says that based on insurance claims so far, CSL is expecting US vaccination rates this season to slump by 12 per cent for the overall population and 14 per cent for the 65-plus age group compared to last year.
“The 65-plus age segment is where our differentiated product FLUAD® has, and continues to grow share, even with this market downturn,” says McKenzie.
“This challenge impacts our forecasts, resulting in overall Seqirus revenue for financial year 2026 declining by mid-teens, versus our previous outlook of revenue declining by high single digit.”
Despite the reduced growth forecast for Seqirus, CSL says that heading into FY27 and FY28 the company expects that its CSL Behring division, which develops medicines for rare and serious diseases, will maintain “sustainable and robust growth, with strong group cash generation and balance sheet metrics”.
“That said, due to ongoing uncertainty in the US influenza vaccine market, while there are some scenarios in which group NPATA growth may touch double digits, we believe high single-digit growth is a more appropriate expectation until the US influenza vaccine market improves,” says McKenzie.
CSL shares were trading at $176.89, down 16.3 per cent, at 11.37am (AEDT).
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