CSL Limited (ASX: CSL) is in the news this morning after news broke of a new manufacturing centre.
What has been announced?
It has been reported in the media that CSL will build a new influenza vaccine manufacturing facility in Melbourne. It’ll be the largest in the southern hemisphere once complete.
CSL’s Seqirus will supposedly invest $800 million into making the facility. But there has also been a $1 billion, 12-year supply agreement with the government which will also help in acquiring land from the Victorian government near the Tullamarine Airport.
If you’re thinking this facility is going to be perfect for COVID-19, then you’ll be waiting a few years. The facility is expected to be fully operational by the middle of 2026. It’s expected to produce influenza pandemic vaccines, query fever vaccines and anti-venoms for animals like snakes, spiders and marine creatures.
This isn’t a brand new arrangement, it replaces an existing arrangement was due to expire in FY25, which is when the Seqirus Parkville facility will be retired.
It will be the only cell-based influenza vaccine manufacturing facility in the southern hemisphere, which will be used to help a shift away from ‘egg-based’ vaccines.
CSL CEO Paul Perreault said: “Providing safe and effective influenza vaccines is essential in securing our defences against serious public health threats.
Cell-based 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.”
Time to buy CSL shares?
I think this agreement shows how important CSL is for the overall health of the country which is why it has such large demand for its facilities and products.
CSL is a high quality business and I think governments will think CSL’s services are more important in a post-COVID-19 world.
The healthcare giant could get a boost if it turns out that we need to take regular COVID-19 vaccines to (hopefully) maintain immunity.
At the current CSL share price I think I’d be willing to make a small investment and buy more on weakness, but there are other ASX growth shares I’d buy first like Pushpay Holdings Ltd (ASX: PPH).
