CSL share price on watch after Thermo Fisher deal

The CSL Limited (ASX:CSL) share price will be on watch on Wednesday after announcing an agreement with Thermo Fisher…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The CSL Limited (ASX: CSL) share price had a rare off day on Wednesday.

The biotherapeutics company's shares finished the day 6% lower at $288.00.

Shareholders will no doubt be hoping for better on Thursday. Especially after the release of an announcement after the market close yesterday.

What did CSL announce?

According to its announcement, CSL has entered into a long term strategic partnership with the world leader in serving science, Thermo Fisher Scientific.

This partnership is for the lease of CSL's state of the art biotech manufacturing facility, which is currently under construction in Lengnau, Switzerland.

The company made the move following a strategic review to determine a pathway that would fully optimise the capabilities of the facility once construction is completed next year.

How will CSL benefit?

Thermo Fisher will lease and operate the facility and is responsible for providing production to support CSL's biologics portfolio. It will also provide other contract manufacturing services such as packaging and fill-and-finish for a number of CSL products.

CSL Chief Operating Officer Paul McKenzie commented: "As part of the strategic review, we are in the process of transforming our end-to-end supply chain with a view to ensuring the company's global manufacturing network is operating at a best-in-class level. This includes balancing internal investment with access to capabilities and capacities that are available with an experienced partner."

"CSL will now be able to access a wide range of capabilities provided by a leading pharma services provider, and we are confident that the management of the facility and the team will be in the very best of hands," he added.

This isn't the first time the two parties have worked together.

For some time now, Thermo Fisher has been a key provider of third-party services to CSL. This includes fill-and-finish, cell culture growth media, single-use technologies, and laboratory instruments and supplies.

There was no update in relation to its guidance for FY 2020. I would interpret this to mean the company remains on track to achieve it. Management has previously guided to a profit of ~US$2,110 million to US$2,170 million this year.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Person handing out $50 notes, symbolising ex-dividend date.
Broker Notes

Where to invest $20,000 into ASX 200 shares

Brokers think these shares could be top picks for Aussie investors.

Read more »

The words short selling in red against a black background
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

Woman in celebratory fist move looking at phone
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format.
Share Market News

Record CBA share price and blockbuster merger push ASX 200 financials sector to the top

ASX financial stocks led the 11 market sectors last week with a 1.95% gain.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Market News

CBA Shares in focus: How Australia's most valuable company is using AI to compete

Could AI initiatives drive CBA shares higher?

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Broker Notes

These ASX 200 shares could rise 20% to 50%

Looking for big returns? Brokers think these shares could do the job.

Read more »

asx share price represented by cartoon letters spelling the word FOMO
Share Market News

What did Macquarie's "FOMO Meter" reveal about the stock market in May?

Is the market getting frothy or is there still room to climb?

Read more »

Market up or down
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough end to the week...

Read more »