CSL to pay $466m for stake in Chinese firm

CSL PlasmaCSL has secured a foothold in the world’s fastest growing plasma therapeutics market with a $US352 million ($A466 million) stake in Chinese biotech Ruide.

The purchase of an 80 per cent stake gives the ASX-listed vaccines and blood products supplier access to China’s plasma product market, which was valued at more than $A3.3 billion in 2016 and is tipped to grow at an annual rate of about 15 per cent.

CSL on Tuesday said China’s immunoglobulin market is the second biggest and second fastest growing after that in the United States. At 1515 AEST, CSL shares were $A2.005, or 1.5 per cent, higher at $A137.055. CSL said the transaction will complement its current position in China as a supplier of albumin and allow the firm to better service patients there with rare and serious diseases.

“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,” CSL managing director and chief executive Paul Perreault said.

Citi analyst Victor Windeyer said the acquisition was small but gives the firm a “solid springboard” for further expansion in China.

“We think this is a positive development,” Windeyer said in a note. “The acquisition provides CSL with a strategic presence in the Chinese plasma market, as the largest albumin import supplier and the first foreign controlled domestic manufacturer.”

The deal will be funded through CSL’s existing debt facility and is set to complete in the second half of the current calendar year. Humanwell Healthcare Group will retain ownership of the remaining 20 per cent of Ruide. With total revenues about $US30 million last year, Ruide develops and manufactures a range of plasma-derived products for the Chinese domestic market.

It owns and operates four plasma collection centres and a manufacturing facility in Wuhan, Central China. CSL expects strong, ongoing demand for Ruide’s products, and said it has an advanced pipeline of multiple coagulation factor products that it plans to roll out across China in the coming years.

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