Australia won’t save the world, this time, after trials of our promising COVID vaccine were abandoned.
It’s a rare setback for biotech behemoth CSL.
CSL is one of our largest companies — a global biotech giant worth more than some of our biggest banks — but one that many Australians would have never heard of.
The failure to produce a successful vaccine is unlikely to even knock its share price on the stock exchange in the medium to long term, because it has a contract to manufacture up to 30 million doses of a rival company’s treatment.
“They’ve made the prudent decision, the right decision to not continue,” said Maria Halasz, the chief executive and managing director of drug development company Cellmid Limited.
“It’s only a small part of what they do, they have a quasi-monopoly on blood products worldwide.”
It’s that blood that’s powered its dominance and surging share price.
In August it announced a $2.1 billion full-year profit, up 10 per cent, with its chief executive lauding solid growth in its “immunoglobin portfolio” of products. Immunoglobins, or antibodies, are produced by white blood cells.
CSL’s chief executive and managing director Paul Perreault, noted an “exceptional result against a backdrop of complex and unexpected challenges brought about by the COVID-19 pandemic”, praising its “largest franchise, the immunoglobulin portfolio” for performing extremely well.
In the past five years CSL’s share price has more than doubled. As the calendar flipped into the year 2000 a share cost just below $7. In February the same share was worth $340.
Clinical trials of a potential COVID-19 vaccine being developed by the University of Queensland and CSL have been abandoned, a statement to the stock exchange said this morning.
Some participants in the UQ clinical trials of a COVID-19 vaccine returned what are called false positive test results for HIV. (Importantly, the participants did not develop HIV or any of its symptoms, but in tests for disease they returned results that incorrectly looked positive for it).
The vaccine is one of four the Federal Government had signed deals for, and agreements had been made to secure 51 million doses of the vaccine.
In a statement to the ASX, CSL said it would not progress with Phase 2/3 trials, stressing there were no serious adverse events or safety concerns reported in the 216 participants in the trial.
Australia’s economy is often lambasted as ‘dumb’, for lacking in complexity and relying heavily on mining and mortgages. But for a period in March, CSL was the biggest company on our stock exchange, ahead of miner BHP and the mortgage-fuelled Commonwealth Bank.
Both CBA and CSL used to be owned by the federal government. CSL was founded in 1916 as the Commonwealth Serum Laboratories and has powered world-changing technologies like penicillin and insulin. Its core business is now blood products and vaccines.
Merricks Capital head of distribution Fiona Clark said the market and analysts were in consensus on the company.
“Its one of the best-managed, highest-quality businesses on the ASX, and you’ll find very few analysts in the market with anything negative to say about it,” she said.
“This would be a disappointing day for the scientists and managers who’ve worked tirelessly on this (vaccine) but, for the company, it’s been operated in a faultless manner over the last many, many years.”
Cellmid Limited’s Mr Halasz agreed.
“CSL is an amazing company. They way they’re run, the way they’ve operated commercially, a great company, full stop,” she said.
“They’re an example to the rest of Australia. Not just to the biotech sector, to all companies.”