CSL heading for global pharma stage after Vifor Pharma tie-up, mRNA sagaROBERT GOTTLIEBSEN

The mRNA saga and the Vifor Pharma deal show that Australia’s largest biotechnology company, CSL, is set to be very different from the CSL of old.Many analysts see CSL as a company that develops vital drugs out of plasma with a flu vaccine adjunct. That’s no longer CSL of 2021 and beyond; it’s set to be a global pharmaceutical company that takes its research successes into production and marketing.For decades, CSL has been pumping vast sums into research. It now has 1700 researchers and has spent around $5.5bn over the past five years. That research thrust is now set to fundamentally change the company over the next 10 years.

CSL is already a global player in flu vaccines and in the very early days of the pandemic approached Moderna about working together in mRNA vaccines. Understandably, the US company wanted to take its own path.The company responded by stepping up its research to develop its own mRNA technology with initial emphasis on new flu vaccines, but with the aim of becoming a global player in mRNA vaccines over a wider spectrum.CSL has had success and has started first stage clinical trials in the US.

It is confident it will be a developer of the next generation of mRNA vaccines, which will be an improvement on the current generation. As well as providing better protection, the next generation will require less cold storage and less arm soreness.CSL’s proposal to the government was too fast-track a Melbourne plant next to its flu vaccine facility and link with another vaccine group to hasten development in advance of its research.The Federal government had several decisions to make. But first was whether to accept the CSL plan or whether to go with the Moderna proposal to build a plant in Australia to make the nation a regional mRNA production hub. The Moderna plan overtook a South Australian proposal.The Federal government took the certainty and potential of Moderna rather than CSL. Then there was the decision of where the Moderna plant should be sited.

Last week, NSW thought that it had secured the Moderna plant but instead but it went to Victoria to be part of the very large base of vaccine talent expertise in the state and to establish a regional centre of excellence. This was a decision made at ministerial level. There were many Canberra public servants who wanted the plant anywhere but Victoria. Clearly, there were deep negotiations over funding with the Victorian government.

CSL will now proceed with its mRNA clinical trials and at a later date will decide whether to put a mRNA plant next to it’s flu vaccine plant in Melbourne or whether to site the plant in the US or Europe where CSL also has major operations.CSL’s global research headquarters is in Melbourne and is building a regional plasma production hub next to its existing facility.

One of the legacies of retiring Health Minister Greg Hunt will be the establishment in Melbourne of a large vaccine expertise network. If the Victorian government was planning a major attack on the Federal government in the 2022 election over alleged favouritism to NSW, the Moderna plant and the Korean defence facility will mute that attack.There are remarkable similarities between with the mRNA developments and the Vifor Pharma deal. CSL began to achieve research breakthroughs in kidney treatments which would vastly improve outcomes including heart side effects. This is a huge market.In the case of plasma, CSL built up its own marketing network but it took a long time. In 1996, CSL sub-licensed its HPV technology to Merck.In kidney treatments, Vifor is much closer to the market but does not have the research base to improve its products and techniques. And the company was for sale.CSL is confident that the combination of it’s research and the Vifor involvement in the marketplace will open a totally new set of very large markets for CSL.But this is not a takeover about profits next year or the year after but rather a long-term investment in a big market.

There might not be any plans in the pipeline but the fact that CSL is backing its research in mRNA and kidney treatment with production will not be the end of the story. CSL now has global scale and over the years many more opportunities will arise.CSL chief executive Paul Perreault made it clear on his appointment in 2013 that his task was to leave his successor with a similar or better set of future opportunities to that was left to him by his predecessor and now chairman Brian McNamee.