CSL said it was raising its interim dividend by 18 per cent to US95¢ ($1.42) per share as it announced the results.
Its shares traded flat on open, jumping 1 per cent, before slipping 0.8 per cent at 10:30am to $323.23.
The result follows a bumper year for the business, with its share price jumping more than 50 per cent in 2019, making it the top-performing blue chip. The company also bulldozed past the $300 per share milestone in January and closed on Tuesday at $325.73.
The company’s core business is the separation of human blood into components that can be converted to therapies used to treat diseases including immunodeficiency and autoimmune diseases, hereditary bleeding disorders and critical care.
Demand for its immunoglobulin products in western market drove much of its growth the past year. These therapies, including Privigen and Hizentra, treat immunodeficiency diseases including Aldrich Syndrome, chronic inflammatory demyelinating polyneuropathy and Kawasaki disease.
Mr Perreault told The Australian Financial Review that CSL still held about 30 per cent market share in the immunoglobulin sector, but because it had invested ahead of its competitors, Takeda and Grifols, in opening plasma-collection centres, it was responsible for about 50 per cent of the growth in the immunoglobulin market.
“I think there will be limited growth for the future in terms of market share, but everyone has been trying to expand as quickly as possible,” he said.
“I’ve been publicly encouraging others to continue to expand because this is hard work. It’s a difficult process thanks to the raw materials and the manufacturing cycles, but we do have a bit of a head start.”
CSL is now one of the biggest biotech companies in the world, with a market capitalisation of more than $147.8 billion.
It is now only $2.1 billion off the already stretched market capitalistion of Commonwealth Bank, which is the second most valuable company on the ASX.
As part of its results, CSL upgraded its full-year earnings outlook of net profit growth of 10 per cent – 13 per cent on a constant currency basis, with profits expected to be in the range of $US2.11 billion to $US2.17 billion. It will be the first time CSL has made more than $US2 billion in a year.
The company’s forecasts factor in its usual slowdown in its Seqirus business in the second half, with the bulk of its growth coming in the first half, in line with the North American flu season, as well as the temporary hit to its albumin sales in China, as it transitions to a direct distribution model in the region. Its albumin sales are expected to return to normal levels in the 2021 financial year.
To date, the company has not experienced any disruption from the coronavirus outbreak.
“Because these are medicines that are in need, I don’t really see that slowing down and to date we haven’t had any disruption to supply or importations of albumin in China or around the world,” Mr Perreault said. “We’re in pretty good stead.”
In the first six months of the year CSL’s specialty products division’s growth was tempered by manufacturing contraints for its Haegarda therapy, Mr Perreault said this bottleneck had been removed and he expected growth to be strong in the second half.
While immunoglobulin therapies make up the lion’s share of CSL’s revenue currently, the business is expecting future disruption of this segment from the emergence of gene therapies.
This is an area the company has started investing in, with it recruiting patients for its first clinical trial of a gene therapy to treat people with sickle cell anaemia. However, it is also likely that the business will maintain growth in immunoglobulin products for some time, with capacity for the business to expand into other geographies like China, where immunoglobulin products are not widely used yet.
The company, which spends about 10 per cent of revenue annually on research and development, is also working on new therapies for a range of conditions including asthma, subarachnoid haemorrhage (bleeding in the brain following the rupture of an aneurysm), prevention and treatment of graft-versus-host disease, lupus, systemic sclerosis and a rare, deadly skin disease called dermatomyositis.
But Mr Perreault, who took on the top job in mid 2013, said that when he one day hands over the reins at CSL, he wants his legacy centred on his committment to patients.
“It’s about making sure people realise through the time I’ve been here, that we’ve had a mission, passion and vision that’s about … a genuine patient focus, not just the sound bite of the day – it’s about improved lives, saved lives and innovative for new thearpiaes for patients that didn’t have one before,” he said.