CSL wins $206m US contract: Biotech Daily CRITERION: Tim Boreham...

CSL wins $206m US contract: Biotech Daily



CRITERION: Tim Boreham | September 17, 2009
Article from: The Australian

IT must be nice to be of such a grand corporate scale that you're not obliged to disclose a $US180 million ($206m) US contract for flu vaccine drugs -- which CSL has just chalked up -- to the bourse.

Industry newsletter Biotech Daily will report later today that the US Department of Health has ordered said amount of the H1N1 vaccine, with the required bulk antigens in production.

We guess BHP doesn't bother the ASX every time it sells an equivalent amount of iron ore, but the sale is significant in that the picky Food and Drug Administration only approved the drug yesterday -- and in what looks like record time.

Trials of the relevant (low dose and cheaper) form of the drug were initiated in Adelaide only three months ago, with the positive results announced last Friday.

The trial -- of 240 healthy volunteers -- showed that a smaller (15 microgram) dose was effective, with the patient not having to come back for a second jab.

CSL spokeswoman Rachel David has told Biotech Daily the approval was swift because the FDA is treating the drug as a remedy for a strain change, rather than for a new malady.

Locally, the feds have ordered 21 million doses, pending Therapeutic Goods Administration approval.

Of course, the welcome US news doesn't quite erase the disappointment of having CSL's proposed $US3.1 billion takeover of plasma rival Talecris Biotherapeutics torpedoed by the US competition regulator.

It's also safe to assume the margins on the US batch aren't that fat, as CSL has to be seen as the good corporate citizen when it comes to the pandemic.


Meanwhile Biota shares have run up from the $2 level at the start of the month on not much news -- or at least the disclosed variety. But we gather its flu drug Relenza is walking out the door. We eagerly await next month's update from the drug's marketer GlaxoSmithKline.

Criterion last has CSL as a long-term buy at $33.12 on August 12, after the company reported a $1.15bn profit and gave every impression of not knowing what to do with its mountains of cash.

Somewhat regrettably we suggested profit taking on Biota at $2.17, on August 11.

We'll keep CSL as a long-term buy but our Biota call is under review.