CSL’s Seqirus Spinoff Put on Ice
Just last week, we finally got around to covering CSL’s (CSLLY) planned spinoff of its vaccine business, Seqirus — an ambitious move intended to unlock value for CSL shareholders. Now? Never mind.
In a classic case of “right idea, wrong timing,” CSL has indefinitely postponed the spinoff due to “market volatility,” citing the plunging demand for flu vaccines in the United States. Per Reuters, U.S. flu vaccine coverage for adults is down to just 41.3% this season, compared with 49.4% the year before.
When investors heard the news, they didn’t exactly cheer. Shares of CSL, already under pressure from the original restructuring announcement, have been treading water, with skepticism building about the company’s decision-making and strategic execution.
A Shot in the Dark
Originally, the pitch was that Seqirus — which generated about USD $2.2 billion in FY2025 revenue — could operate more nimbly as a standalone. That pitch looked shaky even then, but now CSL has admitted what many suspected: this isn’t the right environment to take a cyclical vaccine maker public.
Investors were already wary. Flu vaccine demand is choppy, COVID fatigue is real, and peer multiples are a lot less exciting than they were in 2021. And it’s not just market timing — the restructuring involved laying off thousands and consolidating R&D. These are not exactly the signals you want to send while preparing a spinoff.
Capital Return Instead of Capital Creation
To soften the blow, CSL had announced a A$750 million buyback as a consolation prize. That may have bought them a few days of goodwill, but with the spinoff now shelved and cost cuts still looming, the logic is looking thinner. One-time charges of nearly USD $770 million were expected, along with multi-year savings. None of that goes away — the breakup pain is already in motion, but now without the potential upside.
CSL’s Seqirus delay is another cautionary tale: big talk, big plans, and then… nothing.
Disclosure: The author holds no position in any stock mentioned.