Shares in CSL hit a new a record high of $137.65 yesterday after it made a big play to expand in the huge Chinese healthcare market via a $A460 million part acquisition.
CSL told the ASX yesterday that it had agreed to buy an 80% stake in a company called Ruide, a Chinese biotech from owned by Humanwell Healthcare Group for about $US352 million.
Humanwell Healthcare and CITIC Capital China Partners said last month they would buy Ansell’s condom division for $US600 million.
CSL shares jumped more than 1% before settling back to be up and then rising again in afternoon trading to close on the all time high of $137.65. That took the year’s gains so far to more than 35%.
Ruide develops, manufactures and commercialises blood plasma-derived products for the Chinese market, and also owns four plasma collection centres and one manufacturing facility in Wuhan, Central China.
The deal will give CSL a “strategic presence” in the Chinese domestic plasma fractionation market”, the company said in its announcement to the ASX on Tuesday. CSL is the world’s second biggest blood group, with a major presence in vaccines.
CSL CSO, Paul Perreault said the expansion of the company’s footprint in China through the Ruide stake will allow CSL to deliver on its “promise to save lives and protect the health of people around the world.”
Mr Perrault added: “We will contribute our extensive plasma manufacturing expertise with a goal to expand and grow plasma collection capabilities and introduce new products into this high-growth market.
Humanwell’s Chairman, Dr Wang Xuehai, said in yesterday’s statement, “We are excited to establish a long-term collaboration with CSL, a global leader in biopharmaceuticals, particularly in the plasma sector. Combining CSL’s advanced technical capabilities with Ruide’s established presence in the Chinese plasma sector will enable the partners to improve access to innovative therapies for patients that need them.”
According to CSL, “China’s plasma products market exceeded $US3.3 billion in 2016, with a 15% growth rate for the past five years. China is also the fastest growing immunoglobulin (Ig) market in the world, and in volume, second only to the United States. Improved physician awareness and recent changes to reimbursement coverage for plasma-derived products such as Ig will continue to drive strong demand.”
CSL says it will fund the acquisition with existing debt. The transaction is expected to be completed late this year subject to relevant regulatory approval.
