CSL’s unique and responsible strategy

CSL is a Melbourne based global biotechnology company specialising in plasma products, vaccines, gene therapy and rare disease medicines, with global annual sales of over US$9b. Immunoglobulin (Ig) is their largest product category with sales of over US$4b in fiscal year 2020. The company has a history of innovation and invested US$922m in Research and Development in fiscal year 2020. They also invested over US$1.6b in their own facilities to support the future growth of the company.

We think CSL is a responsible company and their unrelenting focus on patient outcomes has led to innovative treatments, improved access, patient trust, as well as strong shareholder returns. For example, CSL’s therapies are often priced below competitor products despite superior performance, and annual price increases are often minimal, a rarity within global pharmaceutical and biotechnology companies. Furthermore, the Ig industry is seeing demand outweigh supply, and given the tightness in the market, we have seen some competitors direct their supply to higher-priced markets to maximise short-term profits. However CSL’s strategy is to prioritise access and continuity to patients around the world as opposed to directing products to the highest priced market for short-term financial gain. We think that CSL’s strategy is much more sustainable and in fact leads to long-term value creation for shareholders, as the company builds a reputation globally as the reliable supplier of Ig, a complex and high-value therapy that is needed by all countries.

This note has been prepared by ELM Responsible Investments (‘ELMRI’) ABN 70 607 177 711 AFSL 520428, for Australian wholesale clients for the purposes of section 761G of the Corporations Act 2001 (Cth).

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Past performance is for illustrative purposes only and is not indicative of future performance.