CSL Shares Slide After Vaccine Spinoff Delayed

By Mike Cherney

SYDNEY--Shares in Australia-based pharmaceutical company CSL tumbled 15% on Tuesday after the company delayed the spinoff of its flu vaccine unit and cut annual guidance.

In late morning trade Tuesday, CSL shares were at 179.64 Australian dollars, equivalent to US$117.75.

CSL had previously planned to spin off flu vaccine unit Seqirus in the 2026 fiscal year, which is currently underway and runs through June. But it said Tuesday that the uptake of flu vaccines in the U.S. was worse than anticipated, and that it would put the demerger on hold until shareholder value could be maximized.

More broadly, CSL said the flu-vaccine impact--along with a decline in demand for albumin in China--would hit its bottom line. It cut guidance for annual growth in its key profitability metric to 4% to 7%, compared with previous expectations for 7% to 10% growth. CSL added that high-single-digit growth in the coming years was a more appropriate expectation until the U.S. flu vaccine market improves.

The announcements reflect how shifting attitudes toward vaccines is scrambling the pharmaceutical industry. In the U.S., for example, some people more skeptical of vaccines have said they are more comfortable discussing their concerns openly since Robert F. Kennedy Jr., who has emphasized rare risks of vaccines, ascended to the top U.S. health job.

Scientists generally consider vaccines safe and say their benefits, preventing deadly or serious disease, outweigh uncommon risks.

CSL had believed the time was right for the Seqirus spinoff, which could have given it an opportunity to unlock value away from its main blood-products business. When CSL announced the plan in August, the decline in flu vaccination rates was moderating, the previous flu season had been particularly bad, and the U.S. government's vaccine advisory panel had endorsed a recommendation that everyone older than six months should have an annual flu vaccine.

But the declines have intensified. CSL said it expects flu vaccination rates in the U.S. this season to decline 12% for the overall population and 14% for people older than 65 years.

"Our priority is to maximize shareholder value," CSL Chair Brian McNamee said in a speech at the company's annual shareholder meeting on Tuesday. "Given the heightened volatility in the current U.S. influenza vaccine market, we have concluded that advancing with the previously proposed demerger timing will not fully capture Seqirus' value potential."

No specific timeline was given for the spinoff, though the company indicated it still wanted to separate Seqirus in the longer term.

Some analysts said investors would likely agree with the decision to delay the spinoff, given the issues in the flu vaccine market. But the tempered growth expectations would still be cause for concern.

"This guidance downgrade so early in the FY26 year will clearly not help sentiment," analysts at Jarden told clients in a note.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

October 27, 2025 21:52 ET (01:52 GMT)