Welcome!

We've spun the wheel for the Developed Asia-Pacific bucket (~600 companies). The ticker has landed in Melbourne, Australia, on a company that started in 1916 mixing snake antivenoms and is today one of the most important biotech companies on earth.

Before we dive in, a reminder of what the index itself has delivered over time.

Every week, we pull one company at random from the FTSE All-World with ~4,200 companies representing 90% of global stock market wealth. We share the index's long-term returns as a reminder of why we're here: the long game. New to the newsletter? Start here.

Founded in 1916 in Melbourne, Australia. Privatised in 1994. Listed on the ASX.

Imagine a child who can catch every infection that comes through the school gate, because their immune system simply cannot make antibodies. Or someone with haemophilia, whose blood doesn't know how to clot. Or a burns patient in a trauma ward whose body is leaking fluid faster than it can replace it. For all of them, the medicine that keeps them alive comes from the same unlikely place: human blood plasma, donated by a stranger, separated into its component proteins, and bottled.

Three companies in the world do this at scale. CSL is one of them.

A few key facts:

The company reports in US dollars. Reporting in your largest customers' currency makes sense when half your revenue comes from there.

In 1916, with European medical supply lines cut by the war, the Australian government founded Commonwealth Serum Laboratories to make vaccines and antivenoms for Australians. For most of the 20th century, that's exactly what it did. Snake antivenoms. Tetanus shots. Insulin. The kind of unglamorous, vital work governments used to do themselves.

Then, in 1994, it was privatised. What followed is one of the great corporate transformations in Australian business history.

The pivotal moment came in 2004. CSL bought the plasma business of Aventis Behring for US$925m, paying nearly its entire market value at the time for a German plasma fractionator most Australians had never heard of. It was a bet-the-company acquisition, and the bet paid off. CSL Behring became the engine of the company. Two more big deals followed: the Novartis flu vaccine business in 2015 (now CSL Seqirus), and Swiss-based Vifor Pharma in 2022 for US$11.7B (now CSL Vifor).

A snake antivenom maker in Melbourne, in roughly thirty years, became one of the largest healthcare companies on earth.

Three divisions, three different worlds.

CSL Behring is the heart of the company and ~72% of revenue (US$11.2B in FY25). This is the plasma business. Donors give. CSL collects, ships the plasma to facilities in Switzerland, Germany, and the US, and "fractionates" it, which is just a fancy word for separating it into its component proteins. Each donation can treat multiple patients across multiple conditions.

The biggest product line is immunoglobulins, sold under brand names like Privigen and Hizentra. These are antibody concentrates given to patients whose immune systems can't make their own. A single patient might receive infusions every few weeks for the rest of their life. Other Behring products include albumin (used in trauma, burns, and surgery), coagulation factors for haemophilia, and treatments for rare conditions like hereditary angioedema, where patients can swell up dangerously without warning.

CSL Seqirus is the world's second-largest flu vaccine maker (~14% of revenue, US$2.2B). When you roll up your sleeve at the pharmacy in October, there's a decent chance the vial came from here. They also hold pandemic preparedness contracts with governments including the US, UK, and Australia, the kind of arrangement nobody thinks about until they desperately need it.

CSL Vifor is iron deficiency and kidney disease (~14% of revenue, US$2.2B). Their flagship product, Ferinject, is the leading IV iron treatment globally. If you've ever known someone whose iron pills weren't working and they had to be infused at a clinic instead, that's the product.

Roughly US$15.6B in revenue across the group, and most of it is sticky. Patients with chronic conditions don't switch suppliers. They depend on the same product for years, sometimes decades.

Worth pausing here, because most people don't think about where these therapies actually come from. Plasma can't be synthesised. It has to come from human donors. The US is one of the few countries where compensating donors is legal and common, which is why two-thirds of the world's plasma supply originates there. CSL's centres are usually tucked into mid-sized US cities, often near universities, where students top up their bank accounts a couple of times a week.

The economics work because of scale. Fractionation plants cost billions and take years to build. Once running, they produce dozens of therapies from each litre of plasma. CSL, Spain's Grifols, and Japan's Takeda dominate the global market because nobody else can match the collection footprint. Building 350 plasma centres from scratch is a decade-long project, and that's before you've fractionated a single drop.

This is the moat, and it's a deep one. Regulatory approvals. Plant construction. Donor recruitment. Global cold-chain logistics. New entrants don't really exist.

For decades, Australian brokers had a saying: "you never sell CSL". The stock was a one-way ticket. Up, and to the right, year after year.

Then this year happened. The share price has more than halved, from above A$275 to around A$125 at the time of writing. The H1 FY26 results, released in February, made the picture clearer.

Reported net profit fell 81% to US$401m. The headline looks alarming, but most of that was a US$1.05B impairment, mainly the write-down of an sa-mRNA COVID vaccine platform that hasn't panned out, and an iron product called Venofer now facing US generic competition. Strip those out and underlying profit was US$1.95B, down 7%. Still soft, but not a crisis.

Inside the segments, a more interesting picture: Behring, the crown jewel, declined 7% on tough comparisons and policy headwinds in the US and China. Vifor, long criticised for underdelivering since the 2022 acquisition, grew 12% with strong nephrology momentum. Seqirus declined 2% in a US flu vaccine market disrupted by falling immunisation rates.

There is also new leadership. Long-time CEO Paul McKenzie has stepped down, with former Seqirus president Gordon Naylor taking over on an interim basis. The restructuring announced last August (~3,000 job cuts, R&D consolidation from 11 sites to 6) is on track, with 60% of FY26 cost savings already achieved and a US$750m share buyback underway.

It's a familiar pattern. A long-term compounder going through a hard transition. DCC is doing something similar in Europe. The 30-year track record doesn't disappear overnight, but the next few years require management to execute on a plan that wasn't necessary a decade ago. With an interim CEO at the helm, those years just got harder to predict.

Earnings per share have compounded at roughly 11–12% per year over the past 20 years. The forward P/E has compressed from above 30x at the highs to around 15x today. The dividend was held flat in H1, currently yielding around 1.9% in Australian dollar terms.

Whether the current valuation reflects fair caution or an overreaction is the kind of question we don't try to answer here. What we can say: CSL still collects more plasma than almost anyone on earth. It still serves patients who depend on its products for the rest of their lives. And the underlying tailwinds, aging populations, rising diagnosis rates, and demand from emerging markets, haven't gone anywhere.

For much of the last decade, Australia's most globally significant company was not a miner or a bank. It was a former government lab that started by mixing antivenoms for soldiers cut off from European supply in 1916.

CSL is in every global index fund with Asia-Pacific exposure. We had no idea it was in our portfolio. Did you?

Data and images sourced from CSL Limited Annual Report FY2025 and CSL Limited H1 FY26 Results presentation. Share price and market cap as of late April 2026.

Next week, we'll be looking at a company from Emerging Markets.