Australian pharmaceuticals heavyweight CSL has announced its chief executive Dr Paul McKenzie is retiring with immediate effect, as the company tries to rebuild confidence among investors following a grim year and sharp sharemarket sell off.
A day before the company delivers its half-year results on Wednesday, CSL said that McKenzie was retiring, effective from Tuesday. The biotech giant said senior executive Dr Gordon Naylor would be the interim chief executive while the board searched for a permanent replacement.
The abrupt departure of McKenzie was announced late in the day, and CSL shares had dropped nearly 5 per cent to $171.39 by the close of trading.
CSL chair Dr Brian McNamee told investors in a late call the company had a sense of “urgency” as it looked to improve its performance, and that Naylor had the skills and experience needed to lead the business in the interim.
“Paul and the board have determined that now is the right time for new leadership to continue to drive CSL’s strategic transformation and performance,” McNamee said in a statement on the ASX.
McNamee thanked McKenzie for his contributions during his time at the company, including three years as CEO, saying he had helped to stabilise the business during COVID-19 and lifted its collections of plasma.
CSL is one of the biggest companies on the ASX, but its share price has slumped by a third in the past year. Investors have been underwhelmed by its general performance, while it has also been hit by growing vaccine hesitancy in the United States and by concerns about its exposure to US tariffs.
The company in October downgraded its earnings guidance amid falling US vaccination rates and reduced demand from China for the blood protein albumin, leading to a sharp sell-off in CSL shares.
McNamee expressed his frustration and disappointment at the company’s annual general meeting last year, adding CSL’s operations had become too complex for it to react decisively.
McKenzie said the past three years had been challenging for the business but he was proud of its organisational improvements, continued investment in research and development and new vaccine facility in Melbourne.
Naylor has a 33-year tenure at CSL, including as chief financial officer and president of CSL Seqirus, its flu vaccine subsidiary.
McNamee was asked on the call with investors what had changed since the company’s annual meeting last year. He said the company had made progress under McKenzie, but it was “impatient” and wanted to return to growth. “To some degree, I’d say there were clear signs at the AGM that we had a sense of urgency,” McNamee said.
He said the company was announcing the change late on Tuesday so that it did not confuse its message at the company’s results on Wednesday. The departure also comes after CSL’s chief financial officer Joy Linton retired in October.
McNamee said the company will look at both internal and external candidates for the next CEO. With Naylor working as interim CEO, it could take its time to find the right person, he said.
with AAP
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Clancy Yeates is deputy business editor. He has covered banking and financial services, and was previously national business correspondent in the Canberra bureau.Connect via X or email.