Dr Brian McNamee has done a great job
with blood products giant CSL since it was privatised in 1994, but
there have been a couple of recent skirmishes which highlight its
history as a division of the Federal Government.

First, there
was the announcement last month to stop making Q fever vaccines in
2007. Q fever has acute influenza-style symptoms in farmers of cattle,
sheep and goats, and can lead to serious liver and heart problems in
the longer term.

Bad move boys. A coalition including the
National Party, Bill Shorten’s Australian Workers’ Union and the
Australian Veterinary Association quickly formed and extracted a
backflip, as this story in The Age explains.

Dr
McNamee is something of a golden boy who is usually lauded for creating
a $7 billion empire while saving lives around the globe. He
clearly didn’t enjoy seeing CSL described as “a pack of greedy,
corporate bottom feeders” by Bill Shorten on The 7.30 Report on 30 November .

The backflip was announced within 48 hours, but Shorten had also written to
CSL’s largest shareholders a couple of days earlier in what was a quick
and effective campaign. So is CSL really going to spend $40 million
updating the process for such an uncommercial vaccine as this exchange
explains?:

HEATHER EWART: The Q Fever vaccine has been available
for about 20 years. At the height of the vaccination campaign in 2003,
CSL estimates around 50,000 Australians received the vaccine. That’s
now dwindled to 5,000. As well, the sole producer of the only Q Fever
vaccine in the world claims it’s been using an old-fashioned process
that needs updating.

CSL’S DR RACHEL DAVID: We’ve realised
that would cost us about $40 million to do for a product which sells
about 5,000 doses a year, which is a very small number, and we probably
put through one batch of that product every two years. So for CSL as a
major commercial vaccine provider, that is not a viable situation.

All of this drama could well have passed CSL shareholders by as the company has not seen fit to announce any of the information to the ASX. Clearly it is not material, so what was the problem in the first place?

CSL is potentially facing another PR challenge as some vets speak out about the dwindling supplies
of anti-venom treatment, which once again was pioneered by the blood
products giant in its days as a government-owned business. However, the
company’s website
explains how it still produces anti-venoms for the likes of Tiger,
Black, Brown and Tiger snakes, along with red-back spiders, funnelweb
spiders and even ticks.

Given that CSL floated at $2.40 a share and is now above $40, the
company might have to keep producing uneconomic vaccines and treatments
for some time yet. Can you imagine the outrage if they stopped
producing the red-back spider anti-venom?