Australian biotech giant CSL Ltd. suffered its largest single-day decline in nearly 17 years, despite announcing plans to spin off its Seqirus vaccine business and a restructuring program aimed at cutting approximately $500 million in annual costs. The underwhelming earnings performance continued to undermine market confidence.

During early trading in Sydney, CSL shares plummeted as much as 12%, marking the largest intraday decline since November 2008. While the company reported annual net profit growth of 17% to $3 billion (slightly above the $2.97 billion expectation), analysts questioned the quality of earnings, noting that its core Behring division failed to meet revenue expectations and that profit growth was primarily driven by lower tax rates.

"Markets hate uncertainty, and this restructuring introduces numerous variables. Such significant changes inevitably carry execution risks," said eToro market analyst Josh Gilbert.

To streamline business operations, accelerate decision-making processes, and optimize the new drug development pipeline, CEO Paul McKenzie announced plans to spin off the Seqirus vaccine division as an independent publicly listed company. This move will allow CSL to focus more intensively on blood and iron products, particularly treatments for rare diseases and chronic kidney disease.

The company simultaneously announced plans to consolidate its global R&D centers from 11 to 6 locations and close 22 underperforming plasma collection centers in the United States. These measures will reduce workforce by up to 15%, achieving approximately $500 million in annual cost savings. While CSL employs roughly 32,000 people globally, specific layoff numbers remain undisclosed.

"While cost reductions and strategic adjustments may superficially boost earnings per share, we need to consider whether these initiatives should be valued using lower valuation multiples," noted Wilsons Advisory analyst Shane Storey.

Subject to regulatory approval and shareholder vote, Seqirus is expected to list on the Australian Securities Exchange before the end of the current financial year. Additional spinoff details will be disclosed at CSL's Capital Markets Day event in the United States, scheduled for November 4-6.

The only positive development for investors was CSL's announcement of a AUD 7.5 billion ($4.87 billion) share buyback program for the current financial year, representing the first phase of a multi-year repurchase initiative.