CSL's Vaccine Setback: Shares Plummet Amid US Flu Shot Decline

CSL's shares fell by 16.6% after it announced a delay in its vaccine division spin-off due to declining U.S. flu vaccination rates. Originally planned for next June, the spin-off has been postponed to maximize shareholder value amid reduced revenue and profit growth forecasts.

Australian biotech firm CSL announced a significant delay in its planned spin-off of the vaccine division and slashed its earnings forecasts in response to an unexpected decline in flu vaccination rates in the United States. This announcement triggered a sharp drop in its share value.

CEO Paul McKenzie explained during the company's annual meeting that the decision followed U.S. vaccination rates not stabilizing as anticipated, despite positive public health recommendations. The company saw a decline that surpassed expectations, amid contentious health policy shifts in the U.S.

Craig Sidney, a senior investment adviser at Shaw and Partners, noted the share sell-off was driven by the unexpected financial guidance revision. CSL stated the demerger of its vaccine arm, Seqirus, would proceed when conditions favor shareholder value optimization, while its CSL Behring division remains strong.

(With inputs from agencies.)