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A plunge in US vaccination rates since the appointment of US President Donald Trump’s health secretary Robert F. Kennedy has delivered another massive blow to Australian biotechnology giant CSL, which warned its vaccine profits would take a hit, sparking a share price collapse.
Company chair Brian McNamee told CSL’s annual meeting on Tuesday that the double-digit decline in US vaccination rates was a shock to the group given the declines already experienced over the previous two years and the “severity of the disease last year.”
Robert F. Kennedy Jr has espoused misinformation around vaccine safety, including a discredited theory that childhood vaccines cause autism.Credit: AP
CSL forecast US flu vaccination rates will decline by 12 per cent for the overall population and will deliver a “mid teens” drop in revenue from flu vaccines in its business Seqirus, compared to a previous outlook expectation of a high single digit decline.
CSL shares plunged more than 16 per cent, wiping as much as $17 billion off its market valuation after the group downgraded its FY26 revenue and earnings guidance due to the significant fall in US vaccination rates since Kennedy’s appointment and actions which have undermined confidence in vaccines.
Kennedy has been a persistent critic of vaccines in the US, which has led to open disputes over vaccine policy with key public health staff, adding to fears about vaccine safety in the public.
McNamee said it would also delay the spinoff of the Seqirus vaccine business as US influenza vaccination rates have declined at a greater rate than expected rate since the spinoff was announced in August.
“To maximise shareholder value, given the heightened volatility in the current US influenza vaccine market, we have concluded that advancing with the previously proposed demerger timing will not fully capture Seqirus’ value potential,” he told investors at the annual meeting in Melbourne Tuesday morning.
“We’re no longer targeting completion of the demerger in financial year 26; timing will be revisited when we’re confident that market conditions would support the maximisation of shareholder value for you.”
CSL shares have dropped significantly this year, with investors underwhelmed with its general performance, spooked by anti-vaxxer sentiment in its large US market, and Trump’s threats to put tariffs of up to 250 per cent on pharmaceuticals.
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RBC Capital Markets analyst Craig Wong-Pan said the lowered outlook was part of the reason for the market reaction on Tuesday.
“While management’s tempered growth outlook is somewhat understandable given it has been mostly attributable to weakness in the influenza vaccine market, we nonetheless expect the stock to underperform the market today on the weaker-than-expected growth outlook. Partially offsetting that is the delay to the Seqirus demerger, which we believe investors will view positively given most did not expect it to create value,” he said.
CSL was also delivered another strike against its remuneration report at the meeting and faces a resolution to spill the entire board.
Two proxy advisors recommended a vote against the report, which follows a first strike last year, but recommended that shareholders do not vote to remove the entire board.
CSL shares were trading 15 per cent lower at $179.87 before noon and have declined as much as 37 per cent this year.
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