CSL lowered its revenue forecast for the fiscal year to $15.2 billion from $15.8 billion, another sign of the company’s financial woes since its ill-fated $11.7 billion acquisition of Swiss iron deficiency and kidney disease specialist Before Pharma in 2022.
In addition to revising its earnings forecast for CSL’s fiscal year (ending June 30), the company announced it will take a $5 billion asset impairment charge. This update is a review of the company’s financial position following the sudden departure in February of Dr. Paul McKenzie, who served as CEO for three years.
CSL’s stock price fell about 16% on the news, its lowest since 2017. Since the beginning of the year, CSL’s share price has fallen 41%.
“The failure of several late-stage research and development projects and the loss of some market share in key markets have led to a loss of confidence in the growth prospects of the business,” Interim CEO Gordon Naylor said in a conference call Monday morning. “There is no fundamental change in business strategy. This is primarily about execution excellence.”
CSL’s new revenue forecast calls for a 2.6% decline from fiscal 2025 revenue of $15.6 billion. This is the first decline in revenue for the company in more than a decade, and it comes less than four years after its largest acquisition.
Specifically, CSL cut its adjusted revenue forecast by $300 million from this year’s U.S. immunoglobulin (Ig) sales forecast due to “excess Ig inventory in the channel, which is creating a disconnect between customer demand and CSL’s reported sales,” Chief Financial Officer Ken Lim said.
Naylor added that CSL has been “slow to respond” to competitive pressures in the Ig market.
The company believes that demand for Ig in the US is still increasing and market share is expanding. Revenues from plasma-derived products exceeded $3 billion in the first half of the fiscal year, accounting for 56% of the revenue generated by CSL Behring.
Additionally, CSL expects sales of albumin, another plasma product, to be $200 million lower than previously forecast. The company blamed the decline on the decline in albumin market value in China.
CSL also cut $150 million from its fiscal year forecast due to a combination of factors, including the suspension of sales to Iran due to the Middle East conflict, slower-than-expected growth for its hemophilia gene therapy Hemgenics, and increased generic competition in the iron market.
Analysts at Jefferies said CSL’s downgrade was not a complete surprise given “documented issues” with sales of immunoglobulin in the United States and sales of albumin in China. Analysts said they did not believe the forecast was indicative of long-term difficulties for the company.
“We continue to believe that both markets have low penetration, and the industry should grow over the medium term,” the Jefferies team said in a note to investors.
Regarding the impairment charge, which applies to fiscal years 2026 and 2027, CSL said it relates to underutilized manufacturing capacity and assets from the unsuccessful Vifor acquisition. This writedown is in addition to a further $1.1 billion impairment charge that will occur in the first half of fiscal 2026.
CSL also announced the retirement of Chief Commercial Officer Andy Schmeltz and the promotion of Diego Sacristan to that role. Sacristan served as CSL’s U.S. head last year.
