Melbourne-based biotech manufacturer CSL says the slowing of China’s economy will not affect its Asian expansion plans.
CSL chief executive Paul Perreault told the Australian that China’s middle class is continuing to expand as people move from rural areas to cities and, as a result, demand for healthcare services in the world’s most populous nation will continue to grow.
“A small city in China is one million people. This is a massive country … I think there is still opportunity there. Even when we see a ‘slowdown’ in China growth, it is still massive growth in a country of that size,” he said.
“In our business we have been able to expand into the tier-two and tier-three cities and hospitals from the tier one, because there is more and more utilisation of healthcare as people move from the countryside into the city.”
CSL currently sells Albium, a blood plasma protein used in emergency surgery in China. Annual sales of the product in that nation are worth more than $US300m ($414m) to the company.
Currently trading at $89.22, CSL shares have risen significantly in the past 12 months. Most analysts say good management is one of the main reasons behind the company’s success.
On top of that, CSL filed its haemophilia A product in the US recently and has reached some R&D milestones.
And the company has also received regulatory approval for its acquisition of Novartis’ influenza vaccine business.
The deal, which was announced last October, will see Novartis’ influenza vaccine business combined with CSL’s subsidiary, bioCSL to create the second largest vaccine company in the global influenza industry.
It will have manufacturing plants in the US, UK, Germany and Australia; and have strong pre-pandemic and pandemic capabilities.
As the SMH reports, at its annual meeting last week CSL announced a record $1 billion share buyback over the next 12 months. The company expects its expanded influenza business to post its first profit in 2017-18.