CSL to buy Novartis's flu vaccine business

CSL (ASX:CSL) is buying Novartis’s global flu vaccine business for US$275 million ($311.7 million) in a move to capture a greater share of the global market.

CSL plans to acquire the business and merge it in with existing vaccines and pharmaceutical subsidiary bioCSL.

The merged company will be the second-largest player in the US$4 billion global influenza industry and have manufacturing plants in the US, UK, Germany and Australia.

The combined business will market both bioCSL and Novartis influenza vaccine brands simultaneously. It is expected to achieve sales approaching US$1 billion per year within the next 3-5 years. Novartis’s flu vaccine business alone recorded net sales of US$527 million in calendar 2013.

Both Novartis and bioCSL are transitioning their three-strain influenza vaccine brands into four-strain formulations. These clinical programs will be completed by the combined business.

In addition, the joint business will continue to in-license and distribute vaccines and specialty pharmaceuticals, and continue to manufacture anti-venoms and Q fever vaccine.

“This [merger] will transform bioCSL’s existing influenza vaccine business, giving us first-class facilities, global scale and product, and geographical diversity,” bioCSL GM Dr John Anderson said.

“bioCSL is absolutely focused on its critical role as Australia’s onshore supplier of influenza vaccine, which underpins its pivotal position in both the nation’s influenza pandemic preparedness and swift seasonal responses to influenza.”

CSL (ASX:CSL) shares were trading 1.22% higher at $76.58 as of around 2.30 pm on Monday.