CSL Share Price Spurred by New Vaccine Manufacturing Plant (ASX:CSL)

Australia’s largest company by market cap, CSL Ltd [ASX:CSL], is trading higher today on the news that it will build a next-generation vaccine manufacturing facility.

It has been a volatile year for the biotechnology company, with the CSL share price falling from its 52-week high during the market crash and remaining well under that level ever since.

ASX CSL Share Price Chart

Source: Tradingview

Nevertheless, CSL shares have made a return of 15.80% over the past 12 months.

At time of writing the CSL share price is up 1.40% or $4.34 to trade at $313.80 per share.

Morrison government to make Australia self-sufficient

In an announcement released this morning, CSL said its wholly owned subsidiary Seqirus will spend $800 million on the construction of a new biotech manufacturing facility in Melbourne.

The intention of the manufacturing facility is to supply influenza vaccines to Australia and the rest of the world.

Should another pandemic like the coronavirus sweep the world in the future, the plant could also be repurposed to develop a vaccine without Australia having to bid for one from overseas.

The Morrison government will spend $1 billion over a decade to underwrite the construction of the new vaccine production facility.

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As part of the deal, the federal government will agree to buy 10 years’ worth of influenza vaccines along with antivenins to treat the bites from the nation’s deadliest spiders and snakes.

CSL’s CEO and Managing Director Paul Perreault said:

The facility will be an important addition to our global influenza manufacturing supply chain, incorporating the technology platform used in our Holly Springs, North Carolina facility. Cell-influenza vaccine technology offers many advantages over the existing process including being more scalable and offering faster production – particularly important in the case of influenza pandemics.’

A nod to Australia’s future economy

Today’s news isn’t only good for CSL shareholders; it’s also good for all Australians in general.

Yeah, sure, we get our own supply of vaccines, but it’s a subtle nod to a change coming in Australia’s economy.

CSL’s current facility is old and unable to cope with new cell-based technology and production demands.

Its current deal with the government is due to expire in 2024–25.

Without the new arrangement, the government says the facility would have closed, and 1,300 jobs would have been lost.

Science and Industry Minister Karen Andrews said of the new deal:

This investment will not only allow us to continue to manufacture the essentials we need well into the future but it will also create and secure high paying manufacturing jobs across a range of skills.

If CSL becomes a frontrunner in Australia’s future economy, one could argue it is the best blue chip stock on the ASX.

In fact, we have already discussed that argument here.

And CSL could become even juicer, as demand for its products ramps up we could see an even bigger dividend. But it’s not just CSL who is in with a chance of maintaining a nice dividend. In our latest report we reveal our top five ASX-listed dividend stocks with a great chance of maintaining big payouts during and after the crash. Click here to download your free report.

Regards, 

Lachlann Tierney

For The Rum Rebellion

 


Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 


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