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Price has fallen more than I expected today (down $1.21 to $27.87 atm). Hope this is just a quick over correction to the steady rise, although the late selldown yesterday afternoon along with today's decline does have me worried. A 5% decline this quickly is more than I think should occur as a normal reaction.
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In reply to: drrc on Tuesday 21/09/04 08:22pm

this may explain the fall:


"Human plasma products maker CSL fell 3.2 per cent, or 95c to $28.13, extending its fall after going ex-dividend on Monday.


This followed an analyst update dimming prospects for higher blood-product prices and falling stocks of CSL's key Intravenous Immune Globulin product."









Worry spreads on price of plasma

September 22, 2004




Some have business in their blood. Others have their business in blood. Takes all kinds.


Shares in CSL fell sharply as analyst commentary filtered back from a site tour of the US and Europe renewing concerns over blood plasma prices.


CSL shares fell 95c to $28.13 after one analyst said management cautioned there was a risk that the market had run ahead of itself on intravenous immunoglobulin (IVIG) price expectations while declining to give more specific guidance on prices.


Traders also noted that the roadshow was being conducted by Morgan Stanley, which recently poached the same CSL analyst from JPMorgan.


"The concern is that the analyst had a screaming buy at JPMorgan but only has a hold at Morgan Stanley," one trader said.


Other traders dismissed the concerns saying distributors were confident of rising prices, meaning the share price fall combined with the stock going ex-dividend on Monday made it a buy.


CSL shares have risen 25 per cent over the past three weeks buoyed by analysts' earnings upgrades amid optimism over rising IVIG prices and further industry rationalisation.





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this may cause a bit more pain today:


FDA Warns CSL Unit on Misleading Promotions

Tue Sep 21, 2004 11:48 AM ET


WASHINGTON (Reuters) - U.S. regulators warned CSL Ltd's ZLB plasma unit that some promotions for its immune globulin treatment Rhophylac were misleading, according to a letter made public on Tuesday.


Rhophylac is given intravenously or by injection to prevent hemolytic disease, a condition in which antibodies produced by pregnant women with a certain blood type attack the red blood cells of her fetus. The condition can be fatal.


The Food and Drug Administration said in a letter to ZLB Bioplasma Inc that a sales brochure, an information sheet for patients and a company Web site omitted important warnings about potential complications such as the possibility of allergic reactions.


"Your failure to provide appropriate risk information misleads consumers and professionals to believe that Rhophylac is safer than has been demonstrated in the approved populations," the FDA wrote in a letter dated Sept. 14.


The agency told the company to immediately stop circulating any materials that failed to fully explain safety risks.


A representative of ZLB Bioplasma could not immediately be reached for comment. The Web site to which the FDA objected, www.rhophylacusa.com, said it was "being updated with additional relevant information."




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Blood giving backers a hit




DESPITE substantial share-price gains this year, analysts are backing blood-products company CSL to keep rewarding its investors.


The shares were down at $16.05 a year ago but closed at $28.80 on Friday, up 10 per cent in the past month alone.


CSL announced a $219.6 million record profit late last month, when chief executive Brian McNamee predicted a $270 million result in 2005.


However, the strong growth has not stopped Deutsche Bank analysts tipping CSL shares to hit $34 in 12 months.


In a note to investors, Deutsche analyst David Low says there are several reasons to re-rate CSL. The key "was a 30 per cent increase in the expected synergies from the Aventis Behring integration reflecting a higher number of staff positions being cut".


Mr Low said if CSL management's prediction that the price of one of its core blood products, IVIG, would top $56 per gram was accurate, it would add $50 million to earnings.


Deutsche Bank says CSL "should trade at a premium to the market, given its increasingly attractive growth profile."


Ord Minnett client adviser Tony Catt said each day there was no bad news about the ongoing $1.3 billion Aventis Behring integration was a good day as far as the market was concerned. "How much upside there is depends on IVIG prices," Mr Catt said.


Ord Minnett has an "overweight" rating on the stock.


In contrast, Shaw Stockbroking's Brent Mitchell recommended investors reduce their holdings in CSL.


"We think they've run a bit hard ... they're still on a high price-to-earnings premium," he said. "They need to get some runs on the board."


The Aventis Behring integration had progressed well so far but there was still work to be done. This included expanding CSL's distribution chains.




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  • 3 weeks later...

Thursday October 14, 2:55 PM


UPDATE: Price Rises Start Flowing For Australia's CSL


By Richard Noonan



MELBOURNE (Dow Jones)--Australia's CSL Ltd. (CSL.AU) said Thursday that prices for its key blood products have finally started to rise in the U.S. and will continue to edge higher over the next year as collected plasma volumes fall.


After a few lean years and sagging profit margins due to a mismatch between supply and demand, CSL said prices for intravenous immunoglobulin, or IVIG, climbed up to 5% in the past six months.


Chief Executive Brian McNamee said IVIG prices are currently around US$36 to US$37 a gram and will probably rise another 5% over the next six months.


"IVIG prices are certainly improving," McNamee told reporters after CSL's annual shareholder meeting in Melbourne.


"People have stopped selling products where they were losing money. As the volume in the sector has been reducing, and as supply and demand come back into equilibrium, you need economic prices," he said.


CSL, whose fortunes are tied to the price of IVIG, has seen earnings eroded in recent years by steep price discounting in blood products, which are used to help treat blood-related disorders such as hemophilia.


Acknowledged by analysts as a price follower in the key U.S. market, Melbourne-based CSL competes mainly with Baxter International Inc. (BAX).


In an effort to restore pricing power, CSL and Baxter have been slimming down their plasma collection and manufacturing activities.


While he dismissed any chance of product shortages emerging, McNamee predicted that some prices may reach a more sustainable US$40-a-gram level within 12 months.


"They need to get to US$40, but it's not going to happen overnight, we have long-term contracts," he said.


Even so, "we can say with some confidence that we think the momentum will continue as demand for the product remains solid in the U.S. market, growing around 5% to 6%."


Analysts noted prospects for better prices have already been factored into CSL's forecasts after Baxter recently advised customers that its spot prices would progressively lift 10% by Christmas.


Despite expectations of better times, CSL on Thursday reiterated its net profit forecast of up to 23% growth for the current fiscal year ending June 30, 2005. It made A$219.6 million in fiscal 2004.


Confirming a forecast made in August, CSL said net profit would be at the upper end of its A$250 million-to-A$270 million target range, subject to currency fluctuations and "material" price gains for its core products.


Shares in CSL closed down 3.1% at A$28.00, paring gains so far this year to 57%. Analysts said there may be some concerns that price gains are flowing slower than expected and that CSL didn't raise its profit forecast.


Aventis Behring Job Cuts Continue


McNamee said the integration of Aventis Behring into its own ZLB plasma business is progressing, with 70% of the integration milestones completed and its target of at least US$100 million in cost savings intact.


"Everything's gone quite well from the integration perspective," he said.


CSL bought Aventis Behring from drug group Aventis SA (AVE) for US$675 million in April.


As part of the ongoing cost-cutting program, CSL has closed a third of its U.S. plasma collection centers, shut plants and slashed global manufacturing output by a quarter.


McNamee told reporters that about 2,500 jobs, or 30% of the combined ZLB and Aventis Behring workforce prior to the acquisition, will be shed by mid-2005.


Earlier, he told shareholders that China represents an emerging niche opportunity for CSL, noting it recently set up two sales offices in the country with 33 staff.


CSL is the biggest importer of blood products into China, and McNamee said it wants to expand that business, but has no plans to set up a manufacturing operation in the fast-growing country.


Turning to its research program, McNamee said the HPV vaccine it is developing with Merck & Co. (MRK) to treat cervical cancer and genital warts is moving ahead, with an application for U.S. regulatory approval set for 2005.


CSL is expected to get royalties on sales of the vaccine from late 2006.


"There will be information coming through over the next three to six months that will continue to give people confidence that the program's progressing," he said.


"We think it's a great program and going to be an important product, and we're confident the product will work."






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In reply to: drrc on Friday 15/10/04 10:38pm

CSL recently upgraded 'flu facility seems good timing in light of Chiron's disaster.


Some relevant posts on BTA string.


CSL manufacture 'flu for Northern Hemisphere so may make an opportunity for year round operation and potential to massively boost ROI.

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  • 1 month later...

explains the recent weakness?


CSL dips on contract news


Health-care group CSL's revenue is likely to be crimped when its main Australian contract to supply blood plasma products to the federal government is replaced with a new agreement from January, according to a report in Wednesday's edition of The Australian Financial Review. Negotiations between the company and the National Blood Authority for a new contract to replace CSL's 10-year, $1.2 billion plasma fractionation agreement have reached a sensitive stage. The new deal was intended to be finalised by the end of September, well before the December 31 expiry of the existing agreement. CSL shares dipped 23ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ to $26.37.





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  • 3 weeks later...

CSL outlines hopes for warts vaccine


Date: December 17 2004


By Trevor Chappell


Blood products company CSL said yesterday that global pharmaceutical giant Merck & Co was close to seeking regulatory approval for a vaccine against human papillomavirus (HPV), which causes genital warts and cervical cancer.


CSL, which has the worldwide rights to technology behind the vaccine, licensed the rights to Merck, which has been developing the vaccine.


In addition to worldwide royalties under the licensing deal with Merck, CSL has the exclusive right to market in Australia and New Zealand any Merck HPV vaccine developed using CSL's technology.


CSL chief scientific officer Andrew Cuthbertson said Merck expected to apply for a licence for the HPV vaccine in the second half of 2005, following extensive Phase III trials.


"They [Merck] don't expect that competing intellectual property claims will delay their program," Dr Cuthbertson told reporters.


"We're very excited about this project, not just because we believe it is commercially important for CSL.


"I think from an Australian science point of view, this is terribly important."


Dr Cuthbertson said CSL had not released any information in relation to milestone payments linked to the HPV vaccine or to potential royalties from sales.


The vaccine could be on the market about 12 months after gaining regulatory approval.


Dr Cuthbertson said Merck expected to be the first to sell the vaccine, under the trademark Gardasil, in the major markets of the United States and the European Union.


The initial target group would be women aged 19 to 24, of which there were 60 to 70 million in the US and Europe.


Merck was carrying out studies on vaccinating women aged 25 to 45, which comprised about 100 million women in the US and Europe, Dr Cuthbertson said.


The company was also looking at preventing infection in men.


The technology licensed to Merck involves tricking the immune system into thinking it has been exposed to HPV, prompting the production of an antibody or an immune response.


Dr Cuthbertson said CSL had entered into a new research collaboration with vaccine company Aventis Pasteur to develop a vaccine for chlamydia.


The collaboration was still in the pre-clinical phase and clinical trials for any vaccine would be about two years away.


CSL shares were 91c higher at $28.99.





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