Why are CSL shares charging higher today?

The company has been awarded a big contract relating to pandemic preparation.

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CSL Ltd (ASX: CSL) shares are having a good session on Thursday.

At the time of writing, the biotechnology giant's shares are up 1.5% to $290.84.

Why are CSL shares charging higher?

Today's gain appears to have been driven at least partly by some news relating to the company's CSL Seqirus business.

CSL Seqirus is one of the world's largest influenza vaccine companies. It was created when CSL acquired the Novartis influenza vaccine business in 2014 and combined it with vaccine subsidiary, bioCSL.

According to an announcement, CSL Seqirus will expand its Vendor Managed Inventory (VMI) program for its proprietary MF59 adjuvant to further support the U.S. government's pandemic preparedness efforts.

This deal was made through its public-private partnership with the Biomedical Advanced Research and Development Authority (BARDA). It is part of the Administration for Strategic Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS).

What is MF59 adjuvant?

The company notes that its MF59 adjuvant is an important part of pandemic preparedness planning as it reduces the amount of antigen required to produce an immune response, increasing the number of vaccine doses.

When combined with influenza antigens in a vaccine, the adjuvant is designed to enhance and broaden the body's immune response by creating a broad, cross-reactive antibody response.

CSL Seqirus' Global Executive Director for Pandemic, Marc Lacey, commented:

Once again, we're honored to partner with BARDA on pandemic preparedness. This expanded program will increase outbreak resilience and help to protect against threats such as avian influenza.

It will also pull in a nice amount of revenue for CSL. The company will receive US$121.4 million from the multi-year award. This will see CSL Seqirus deliver MF59 adjuvant to increase the inventory of the VMI program to 40 million equivalent doses.

The manufacturing will be done at CSL Seqirus' Holly Springs, North Carolina facility, which was built under a long-term public-private partnership with BARDA to provide domestic influenza pandemic preparedness.

Why now?

The release highlights that avian influenza A(H5) virus is widespread in wild birds around the world and is causing multi-state outbreaks in poultry and U.S. dairy cows.

And while alarm bells are certainly not ringing yet, it notes that several human cases of avian influenza A(H5) virus infection have been reported in the United States. As a result, the Centers for Disease Control and Prevention (CDC) is watching the situation carefully and working with states to monitor people with animal exposures.

MF59 from the VMI program can be used to manufacture vaccines to protect against the threat of avian and other strains of influenza.

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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