CSL Limited (CSL) Earnings Call Transcript & Summary

Ladies and gentlemen, we'll make a start. I realize we have a few coffee stragglers still to come, but aiming to start pretty well on time. So firstly, welcome. I'd like to start off with acknowledgment of the traditional owners of Sydney. CSL acknowledges the traditions and culture of the Gadigal people, the first peoples of Sydney. We respect and acknowledge their elders, past and present. And a very good morning, everybody, and welcome to CSL's Inaugural Capital Markets Day. For those of you who I haven't met, and I think I've met pretty well everybody here, my name is Mark Dehring. I head up Investor Relations at CSL. I think everybody here is aware of how much CSL has grown over the last decade. And it's grown to the extent where we felt it was important that we have a more fulsome briefing, we can only cover so much at a results briefing. So hence, today's briefing. Our plan is to conduct a Capital Markets Day every 2 years. And in the intervening year, hold our traditional R&D and commercial briefing. Please note, there won't be a separate R&D briefing this year. We'll incorporate that today. Please be aware, this briefing is being webcast, and I'd like to draw your attention to the forward statement disclaimer contained in the slide deck. And for those in the room here, I want to take a moment to ensure that you're familiar with the evacuation procedures to be followed in the unlikely event of an emergency. So if an evacuation alarm does sound, the venue's fire wardens will enter the room and direct us to the emergency evacuation points. Please, of course, follow their instructions. We have a full agenda today, featuring many of our senior leaders, and they'll be providing updates on their areas of business and share some of the initiatives that underpin our strategic ambitions. You'll first hear from Paul McKenzie, and I know a few of you already have. Paul, as you well know, is our CEO and Managing Director. Next, you'll hear from Ken Lim, who will talk about CSL Seqirus. Ken's kindly stepped in at the last moment. Steve Marlow, who actually heads this business is unfortunately sick today. After a short break, Andy Schmeltz will share his views on the CSL Behring business unit. Then we'll take a break for lunch. This afternoon, as you can see here on the agenda, we'll hear from Mark Hill, Joy Linton and Bill Mezzanotte on the topics of digital, financial performance and sustainability and research and development. Each section will be concluded with a Q&A. So there will be plenty of time for Q&A. We've got 3 sessions. Paul McKenzie will then make some final remarks. And then we invite everybody to join us -- to join the CSL team down in the Marble bar for a few drinks and [ nuggets ] and lively conversation. I'll now hand you over to our CEO and Managing Director, Paul McKenzie. Over to you, Paul.

Good morning, everybody. I hope everybody is doing well and great to see everybody here today in Sydney. I got my inaugural dunk in the bond eye pool yesterday. Nobody told me it was actually 17 degrees Celsius. So a little bit tight. But welcome to the first Capital Markets Day. It's outstanding to have you all here. Today, my team and I will cover our strategies for sustainable, profitable growth, which will return shareholder returns. These strategies are underpinned by our focus on preventing and treating disease in growing global markets with significant unmet medical need, combined with CSL's best-in-class durable product portfolio and scaled manufacturing capabilities. This is our recipe for success. Now I have to acknowledge there's been a lot of news about GLP-1s in the last couple of weeks. Bill Mezzanotte will address those in his comments later on during the day. But to give you the punch line that you'll hear from Bill, based on the high-level results announced last week, we do not see GLP-1s as having a material impact on the business. I would like to make sure today, you take away a few key points. First, CSL expects to deliver annual double-digit earnings growth over the medium term. Second, CSL has a clear and executable road map to increase CSL Behring's gross margin to pre-COVID levels. CSL expects and will deliver a steady improvement in our return on investment or ROIC, fueled by our double-digit earnings growth. And finally, as you'll see today, CSL possesses an exceptional management team, comprising highly experienced and globally diverse industry leaders. So those are the 4 points. So we'll tell you about them and then you'll hear about them later on. I'm pleased to see so many familiar faces in the room. For those I haven't met, which I haven't -- it almost seems like I've met everybody, but I joined CSL in 2019 as the Chief Operating Officer. And that was after 30 years in different parts of the business, starting my career at Merck, Bristol-Myers Squibb, Johnson & Johnson, and then Biogen. I'm an engineer by training, having both a bachelors and a doctor in chemical engineering. CSL is truly an iconic company. Given the essential nature of our work and the history of this great company and the world-class quality of our team around the globe, I am certainly humbled but yet very excited to be the CEO. CSL is led by our purpose to develop and deliver innovative medicines that help serious and life-threatening medical conditions, help those patients live a fuller life, and protect the health of communities around the world. Over the last few weeks, I've had the opportunity to go to numerous patient events. These events are extremely energizing. You see firsthand the impact of our medicines on patients, their caregivers, their families. You also see the passion and dedication of our commercial team, and how they connect to the patient communities around the globe. Recently, I was in Japan, and I met with the President of the HAE Japan Society, followed by a visit to the office of the Health Minister of Japan. These meetings highlighted the journey these patients go on to get a clear diagnosis, and how beneficial our portfolio of products in HAE is for them. As many of you know, I'm also a frequent visitor and donator of plasma. I really enjoy engaging with our donors and frontline leaders at the collection centers. And I'm very conscious and thankful for the generosity of our donors. I enjoy getting to know them, understanding how we could do a better job on our donation experience. Trust me, like you, they are not shy. But that donation experience is critically important for us, and we are laser-focused on it. And you'll hear more about that later today from Andy and Mark. So let's talk about CSL's strengths that position us extremely well to deliver annual double-digit growth over the medium term. We are the global leader in plasma-derived therapies, influenza vaccines, hemophilia and iron. We operate globally in large and growing markets. We deliver innovative medicines to patients in more than 100 countries. And every day, our donors in 340-plus and growing plasma centers around the world, our donors save lives. We have fueled this growth recently by more than $5 billion in capital investments over the last 5 years, advancing our capabilities, our capacities and expanding our geographic reach. We are also investing in R&D and will continue to do so at a rate of 10% to 11% of our earnings. Our R&D portfolio underpins the future of CSL. And our pipeline has several exciting opportunities in late-stage clinical trials and they're soon approaching regulatory decisions. We have opened up several state-of-the-art R&D facilities. Here in Elizabeth Street in Melbourne, in Marburg, in Germany, and in our new facility in Waltham, right outside Boston. We are forging strategic partnerships to accelerate the delivery of leading innovations for our patients. Like we have done with uniQure to deliver Hemgenix, the world's first and only gene therapy for hemophilia B patients. All of these strengths are underpinned by our more than 32,000 dedicated employees around the world, who are passionate to deliver on our promise to patients. Our 2030 strategy, which you see in the top right of the slide and that you've seen many times before, was designed to ensure resilience and delivery of sustained and profitable growth, not in the short term, but in the long term while it has evolved over the years. For example, it now includes COVID, iron, nephrology. In essence, our focus has not changed. The core therapy areas where we can differentiate and develop a competitive and sustainable advantage. Innovation comes across all parts of our business. It's vital to our success and will continue in every part of the business. We have a broad and agile supply chain. And as I mentioned before, regardless of whether we're making plasma-derived proteins, gene therapies, monoclonal antibodies, influenza vaccines, iron, the processes, operations are proven and scale to respond. To remain a global leader, we need to focus not only on our reliability, but continue to focus a laser focus on our manufacturing efficiency. This manifests through many different ways, but the 2 big ones are technology and continuous improvement. These are following what has been a sizable capital investment over recent years. For the sustainable growth of our enterprise, we have and are continuing to invest in our strategic platforms, plasma fractionation, monoclonal recombinant technology, cell and gene therapy, preventative vaccines and iron therapy. And of course, I've already mentioned some of our benefits of digital transformation. You'll hear more about that from Mark Hill later in the afternoon. Today, I'd like to focus on some specifics, as what we are doing specifically to deliver on our 2030 strategy. We are extremely well positioned to deliver annual double-digit growth. Over the midterm, we expect to deliver those -- that growth through these strategic drivers. I've already touched on our leading positions in high-growth markets. This is true for all of our businesses and therapeutic areas. Today, you will hear from each member of the management team on how they will continue to grow by meeting significant unmet patient need across our therapeutic areas. You'll hear about our unique experience in complex manufacturing platforms, plasma-based therapies, influenza vaccines and iron, combined with a continuous innovation mindset that will ensure the durability of our products. To illustrate this, Ig has been available in various forms for over 4 decades, and it is clearly the standard of care for many diseases with significant further growth to come. Our ability to continue to innovate to meet patient demand with this durable complex product, which is complex to manufacture is what is CSL's secret sauce. It's our industry-leading expertise. Moving to R&D. Our pipeline is fueled by diverse sources of innovation, with several R&D programs nearing trial conclusion across each of our therapeutic areas. If successful and approved, these will drive additional growth. These include garadacimab as a new and potential treatment for HAE, Clazakizumab for their treatment of active antibody-mediated rejection in adult kidney transplant recipients, KCENTRA to improve survival in patients with traumatic injury and acute major bleeding, CSL 112 for the treatment following an MI or myocardial infection, Sparsentan for the treatment of IgAN, a very important disease moving forward. AQIVc, our next standard of care in influenza business. It combines the best of our adjuvanted products with our best flu cell technology. And self-amplifying mRNA, seasonal COVID-19 booster vaccine, which uses the platform -- the best of the 2 platforms, platform we got from Arcturus therapeutics and our own platform in self-amplifying mRNA. You'll hear more about all of these through the presentations and the near-term launches. I will note, however, we will not be spending time on CSL 112, because as we shared at the year-end, that news will come with the card flip in the first quarter of 2024. In addition to this great unbelievable pipeline, we have a period of substantial capital investment to expand our manufacturing network, and now have the capacity balance through the pipe to deliver on our future growth. Last year, we opened up a new plasma fractionation facility right here in Broadmeadows near Melbourne, 9x the capacity of the legacy facility. This facility will process not only domestic plasma, but commercial plasma sourced from across the CSL global network. We have expanded our leading-edge Holly Springs facility that delivers FLUCELVAX around the world. And if you're near the airport in Melbourne, you'll see our carbon copy of that, our new facility at Tullamarine, a FLUCELVAX facility, which will help us deliver on our aQIVc aspirations. Efficiency with Scout operations has been a long-time hallmark for CSL, providing us with a genuine unique competitive advantage. Tied to that innovation is one of our core values of all of our 32,000 employees. As part of our capacity expansions, we have also invested in new innovative processes to deliver higher Ig and vaccine yields and Bill Mezzanotte will talk about that later. Our yield maximization programs not only reduce cost of goods, but they provide more capacity for us to be able to meet the growing demand, particularly in Ig and cell-based flu technology. You will see today how we are approving the average donation yield across all of our plasma centers, as well as how we're increasing the yield of finished product through improvements in all stages of manufacturing. And finally, underpinning this is a disciplined approach to capital allocation that you'll hear from Joy later on during the presentation. Our strong cash flow enables us to maintain a great balance sheet. It allows us to reinvest in the business and deliver returns to our shareholders. CSL can achieve a lot on its own, but we can achieve even more through the appropriate strategic partnerships, some of those I mentioned earlier. We remain focused on external collaboration where it can accelerate our strategic direction and delivery of our therapies for patients and communities. For instance, our partnership with uniQure, to launch Hemgenix. Our partnership with Arcturus to develop next-generation mRNA vaccines, not only in COVID, not only in flu, but in other disease states that we want to pursue moving forward. And we embrace our partnerships with Terumo and Thermo Fisher Scientific. They bring supplier innovations, which enhance our productivity in our plasma centers and in all of our manufacturing facilities around the globe. CSL will continue to partner and continue to collaborate with these industry leaders and others to enhance our objectives. Today, you will hear from each of the business unit leaders. Andy Schmeltz, Ken Lim standing in for Steve Marlow, but Ken knows a little bit about the business, Hervé Gisserot, and they'll all share how each business will contribute to our collective growth within CSL. In CSL Behring, our demand for Ig remains high. We have a clear pathway to pre-COVID gross margins, through optimizing our donor payments, introducing new plasma collection technology and improving our yield. One of the first decisions I made as CEO was to unite plasma, operations and commercial under a single accountable leader for CSL Behring. It brings the entire team closer to patients. I am really excited to have Andy, who joined us from Pfizer. He spent 20 years at Pfizer before that at Abbott, and he spent that in a variety of senior leadership roles. It's great to have him as part of the team, and you'll hear him talk about the end-to-end CSL Behring strategy later this morning. CSL Seqirus is well positioned to outpace broader market growth through its differentiated innovation and the continued investment in scalable manufacturing technologies. Ken will share some of his thoughts on this shortly, because we want to not only be relevant in flu and continue our great position there, but also broaden our portfolio further. CSL Vifor will continue to grow its leading iron franchise over the medium term through market expansion and life cycle management with a clear plan to manage the loss of exclusivity that we'll experience later in the year in Europe. While each of these business units has a strong growth story on their own, we also see opportunities to create incremental value across all 3 business units. By combining the expertise and product offering from CSL Behring and CSL Vifor, CSL is well positioned to translate the World Health Organization's guidelines for patient blood management, which help patient outcomes and improve the overall health care cost and management. Hervé will share more on that approach during his comments. Another opportunity between CSL Behring and CSL Vifor is the formation of a combined transplant and nephrology therapeutic area. This TA enables us to treat patients with high unmet needs across the full continuum of kidney disease from early stage to transplants. When I became CEO, I outlined 5 priorities that would drive the highest value for CSL, and you'll hear more about all of those throughout the day today. Top line growth will be driven by our core franchises in Ig, existing and new indications, flu differentiation and continued market penetration in iron. Given the unmet need, served by our core franchises, opportunities to expand our market products, an exciting portfolio of potential products in the clinic, we continue to see attractive opportunities for growth. Ig will remain at our core for the long term. We are committed to further differentiation of our flu vaccines and look forward to our sa-mRNA vaccine for COVID-19, which broadens our portfolio. Iron is going to be a significant contributor. And together with CSL Behring, as I mentioned before, CSL Vifor is well positioned to address patient blood management. We know we must return our plasma margin to pre-COVID levels, and we have that plan and pathway to do that. Our strategy is to collect more plasma at lower cost per liter, increase our manufacturing yields and generate efficiencies across all of our operations. CSL Behring is committed and driven to do that, and we will make that happen over the next 3 to 5 years. We need to deliver our near-term innovation agenda and continually reinvest in our R&D pipeline, both new entities as well as indication expansion. We're not afraid to disrupt ourselves. You see that in hemophilia, and you see that now in HAE. In hemophilia, IDELVION is the market leader, but we're proud to bring HEMGENIX to offer more options to our patients. Likewise, the same in HAE, where we have HAEGARDA and now are going to bring on another disruptive medicine with garadacimab. This enhances our portfolio for patients in areas that we already have established commercial footprint and commercial knowledge. Digital, without a doubt, is an enabler of the entire enterprise. CSL's sustainable and profitable growth is underpinned by these advances. And Mark will talk about our potential journey on artificial intelligence that we're considering. These advancements will accelerate innovation. They will reduce the time to collect plasma. They'll help us discover new compounds, new biology, and they'll help us learn and conduct better clinical trials. Mark Hill will cover these later. And of course, our more than 32,000 colleagues are at the center of it all. Like other companies with strong growth prospects and very specialized needs, we're in a battle for talent. We must attract, engage, develop and retain the best talent to ensure our success in the long term. But I'm delighted by our ability to be able to do that. I've been visiting with employees around the world. And from my first day as CEO in Kankakee to the recent ribbon-cutting ceremony in the Melbourne office, One of my highest personal priorities is to ensure that the passion and energy that every employee feels grows every day. You get up before the alarm clock goes off. We have to offer a compelling career track, supported by active development and training. The world is changing very quickly. We need to make sure our employees have the skills and capabilities to do that. We need to encourage and embrace diversity around the globe and diversity in experience. I'm really proud that our colleagues around the world are led by an outstanding, highly experienced management team. They combine expertise in biotech, pharmaceuticals from many companies across the globe. Pfizer, GSK, Sanofi, BI, Gilead, AstraZeneca, to name a few. The diversity of this management team is what will help us deliver. It's a strong blend of people who recently joined and those that have been here more than 2 decades. You can see we've strategically spread out our management team. We're geographically diverse now. And that's for 2 purposes. One, we want to make sure we have management team where our customers are. Two, we want to make sure we have a management team where our employees are, because that's critically important for our success. You'll hear from several members of this team today, and they'll be available at the breaks to engage and answer any other questions. I'd like to now welcome Ken Lim to his new role of Chief Strategy Officer, and also to provide his comments on Seqirus. I'd also like to welcome Kate Priestman, who joined us from GSK, who is now on -- who now has joined us as the Corporate External Affairs Officer. With that, I'll turn it over to Ken, who will share his views on CSL Seqirus. Ken?

Thanks, Paul, and good morning, everyone. As Paul mentioned, I'll be stepping in to present the CSL Seqirus business, as unfortunately, our colleague, Steve is not feeling well today. It's a pleasure to serve as CSL's Chief Strategy Officer. Up until taking on that role a couple of months ago, I've spent the last several years with our CSL Seqirus business unit. I had the pleasure of leading CSL's acquisition of the Novartis influenza business, the transaction that led to the creation of Seqirus, and recently served as Seqirus' Interim General Manager. Before diving into our business, I think it's helpful to take a step back to understand where we've come from and the success we've driven through the execution of our differentiation strategy. As you can see from the revenue chart on this slide, CSL Seqirus has experienced exceptional growth since its creation in 2015, following the acquisition of the Novartis influenza business. Our focus on product differentiation, serving unmet medical needs has fueled this growth, with now more than 80% of our sales coming from differentiated vaccines. We have been highly successful in shaping our markets, particularly through real-world evidence. Over the last several years, we have collected a compelling body of evidence, demonstrating the enhanced outcomes from our differentiated products in providing protection against the virus, which is constantly mutating. We're also proud of the global supply network we've established to support the differentiated products, most notably, our scaling up of cell-based vaccine production at our facility in Holly Springs in the United States. With that manufacturing capability to be expanded through the new cell-based facility that we're building at Tullamarine in Melbourne. To put the operational performance into context, the volume of cell-based food vaccine produced at Holly Springs in 2015 when we acquired the facility was about 3 million to 4 million doses. In the current 2023 season, output has exceeded 40 million doses, a result of our continuous focus on operational excellence and yield. Next, we'll move to what underpins our growth strategy over the next several years. Like all dynamic markets, the vaccine industry is evolving. The pandemic saw an exciting acceleration of new vaccine technologies. Post the pandemic, we're seeing some vaccine fatigue that's putting downward pressure on immunization rates around the world. That said, CSL Seqirus is well positioned to outperform in this evolving marketplace. Our strategy focuses on 4 key pillars: first, we will continue to grow our flu franchise, further evolving our portfolio to innovative, differentiated products. Pandemic preparedness is an important part of our business. Today, we have more than 30 agreements with governments around the world, where we commit to respond in the event of an influenza pandemic. And with our ongoing investment in self-amplifying mRNA, our intention is to broaden that capability to be able to respond to a range of potential pandemic pathogens. We're taking the first exciting steps to broaden our global portfolio beyond influenza. As I'll discuss later, we are excited about our next generation COVID vaccine, based on our self-amplifying mRNA technology. And finally, as we continue to grow, we recognize the importance of continuing to invest in our manufacturing technologies, particularly cell, mRNA, our yield enhancement programs and operational excellence. I'm now going to delve a little deeper into strategic focus area one, growth in influenza. As you know, the influenza virus is highly adept at mutating in order to evade our immune systems. Today, seasonal influenza still carries a significant health burden, not to mention the ever-present risk of a new strain of influenza, breaking out into a pandemic. In seasonal influenza, there remains a significant unmet need, which is especially apparent in the very young, as a result of their immature immune systems and in older adults, where their immune system starts to wane over time. Producing better performing vaccines and getting more people vaccinated is our best defense in protecting against the burden of influenza. On the topic of influenza vaccination, it's worth considering where we are since the pandemic. Immunization rates have declined post the pandemic, primarily driven by vaccine fatigue. As we saw in the previous H1N1 influenza pandemic in 2009, we expect these rates to return steadily over time in the order of a few years with one key near-term factor being getting to annual COVID-19 vaccinations. CSL Seqirus has been able to grow our business through these times of lower immunization rates, and we expect to continue to outpace market growth on the heels of our differentiation strategy. It's worth noting that the low levels of influenza circulating through the COVID pandemic has now reversed. In recent seasons, we've seen some of the highest and earliest prevalence of influenza in nearly a decade. This, coupled with population immunity being low and the protection afforded through vaccination, gives us confidence in the return of vaccination rates over time. Looking at the near term, I thought I'd make some comments about the current Northern Hemisphere season. While it's clearly still early in the vaccination season, we're comfortable with how the season is unfolding and our progress against our preseason commitments. Our supply performance has also been excellent, which, as you know, is very important for maximizing our sales and minimizing returns. Let's turn to see how we see our portfolio developing over the future seasons. CSL Seqirus is proud to have a history of driving innovation. When our business was created in 2015, our portfolio was almost entirely trivalent egg-based vaccines, completely undifferentiated from the competition. Since then, we have transformed our portfolio, more so than any other flu vaccine manufacturer. As well as driving significant increases in sales, we're conscious of the important role we play in public health and are proud of the enhanced protection that our products provide. Our recent growth has been underpinned by FLUAD and FLUCELVAX. And we expect to continue this growth through expansion in age indications backed by clinical programs and real-world evidence over the coming years. We are currently working towards extending the indication of FLUAD to 50 years and above, and FLUCELVAX has recently had its indication, expanded to 6 months and older in a number of key markets, making it the only differentiated influenza vaccine in this age group. We have also advanced some key development projects, namely aQIVc and sa-mRNA in flu. aQIVc, our adjuvanted quadrivalent cell-based flu vaccine, is scheduled to commence a Phase III study this northern hemisphere season. Our goal here is to set a new standard of care for the older adult population, where the burden of disease is the greatest. The potential of aQIVc is driven by its combination of 3 differentiated technologies that individually have already demonstrated improved vaccine effectiveness. First, our proprietary adjuvant, MF59, which we currently use in our FLUAD vaccine. Secondly, cell-based manufacturing, like FLUCELVAX, which is specifically designed to achieve an exact match to the circulating strains and avoid egg adaptation. And finally, the concept of higher dose vaccines. aQIVc will contain higher doses of both the adjuvant and antigen compared to our current vaccine formulations. Furthermore, aQIVc will be distributed at normal refrigerated temperatures. We expect to see a durable immune response consistent with our existing vaccines. Complementing aQIVc, we are also utilizing our self-amplifying mRNA platform to develop both seasonal and pandemic flu vaccines. Our flu sa-mRNA programs are expected to enter the clinic in the next few months. sa-mRNA is also the technology that underpins our next-generation COVID vaccine that Paul has mentioned. We acquired this through our licensing agreement with Arcturus Therapeutics. Let me give you some more color on our COVID-19 vaccine. As with flu, our COVID strategy is focused on differentiation. First-generation mRNA vaccines were vital to enabling the world to move on from the pandemic. However, as a vaccine for ongoing annual administration, these vaccines still have some significant compromises, particularly around duration of protection and reactogenicity. Our objective is for Seqirus' sa-mRNA COVID vaccine to be differentiated in a number of important ways. First, with our partners, Arcturus and Meiji Seika, we have generated data showing that our COVID vaccine candidate offers a higher immune response compared to an alternative mRNA vaccine already on the market. We also expect to see sustained protection, potentially for after 12 months, compared to current mRNA vaccines, which show significant waning of protection after 4 or 5 months. Achieving sustained protection is critical to being able to move to a pattern of annual vaccination, which we believe will also support higher vaccination rates. We expect to deliver these benefits with a significantly lower dose of RNA, only 5 micrograms compared to existing vaccines, which are 5 or 6x higher. As you'd expect, we're keen to bring these benefits to market as soon as possible and are currently focused on finalizing the clinical work and regulatory submissions in major markets around the world, enabling commercial launches over the next 1 to 3 years. We expect to receive our first approval in Japan, followed by the EU, U.K. and Australia and then the U.S. As you may have seen, we previously announced a partnership with Meiji Seika, who will be responsible for commercialization of the vaccine in Japan, and are undertaking the required local studies to secure licensure. Before leaving this slide, it's timely to reflect on the Arcturus licensing agreement and what is brought to CSL. As we've been discussing, the collaboration brought a near-term differentiated coded vaccine candidate. By combining Arcturus' expertise in product development with our pre-existing sa-mRNA capabilities, we have derisked our influenza program, improving our probabilities of success. Our collaboration also includes the right to use the Arcturus technology in a broad number of potential pandemic pathogens and other respiratory targets. And finally, we've inherited an mRNA manufacturing capability through a well-established network of contract manufacturers. I'm going to change gears now and provide an update on our cell manufacturing facility here in Australia. I'm pleased to report that construction of our new greenfield cell-based manufacturing facility at Tullamarine is on schedule. Our first production is planned for early 2026 for the Northern Hemisphere '26 season, as well as providing us with additional cell capacity for our seasonal influenza business. The facility also represents a major advance in Australia's national pandemic preparedness. In particular, we're pleased to maintain our long-term partnership with the Australian government to provide protection against future influenza pandemics, as well as ongoing supply of other essential products such as anti-venoms and Q fever vaccine. Our Tullamarine facility is part of a sophisticated expanding global supply chain. This network includes a mix of in-house and third-party facilities, balancing cost and flexibility, which is especially important given the dynamic seasonal markets in which we operate. The commencement of Tullamarine in 2026 will also enable us to retire our park drill site and some set our AFLURIA vaccine. This represents a significant milestone, as it will mark our transition to a completely differentiated product portfolio, a long way from where we started in 2015. And so to wrap up, a few takeaways. CSL Seqirus is well positioned to continue our success in influenza. Continued innovation will enable us to outpace market growth. We plan for aQIVc to set a new standard of care in seasonal influenza vaccines. It leverages and brings together our proven platforms of both adjuvants and cell-based manufacturing. Bringing our sa-mRNA platform to influenza will provide yet another avenue for further product differentiation. And finally, looking beyond influenza, our sa-mRNA platform technology would differentiate our next-generation COVID vaccine. That concludes my presentation. Thank you. I look forward to your questions after today's presentation. But for now, I'll hand over to Hervé to present CSL Vifor. Thank you.

Thank you, Ken, and good morning, ladies and gentlemen. It's a great pleasure to speaking to you today and to see many of you again after the investor store in March at our home of iron in St. Gallen. CSL Vifor has now been part of the CSL family for over a year, and we have already contributed significantly to the CSL performance. We delivered plus 14% growth in fiscal year '23 for 11 months versus a guidance of 10%. This growth was primarily driven by the continued strong performance of Ferinject/Injectafer and [ Mircera ] and the successful launches of TAVNEOS and KORSUVA/KAPRUVIA. Our performance was EPS accretive in year 1 as committed. The integration activities and the cost synergies are well on track with likely more to come on the synergies versus targets. As you can see on the pie chart, the iron franchise represents half of the CSL Vifor revenue. The franchise will enter into a new phase with the loss of exclusivity of our flagship product, Ferinject, in some markets. No doubt, that this is a defining moment for our business, and we are very well prepared. Our strategy does address this challenge, but also multiple opportunities. We have 4 clearly defined objectives: maximize the Ferinject growth, unlock the revenue upside in patients and management across CSL, strengthen our BMO disease market position and portfolio and operate in a lean, agile and efficient way to compete in the new environment. Let's look at the different objectives in more detail. First, how do we plan to continue to win with Ferinject. One important factor to understand is the dynamic of the IV iron market. This market offers unique conditions to drive long-term value, even post loss of exclusivity. The market is underdeveloped with 85% of eligible patients not receiving IV iron treatment. We expect, therefore, the market to continue to grow in volume in line with historical trends. Competition in the IV iron segment should also remain limited, due to the specificity of non-biologic complex drugs such as Ferinject. There is no breakthrough innovation on the horizon. Ferinject is and should remain the standard of care in the many years, why not decades to come. The only unknown is price competition. It is, however, reasonable to believe that while strong pricing competition won't translate into the usual rapid pricing erosion experienced in other generic sized markets. And with Venofer or low dose IV iron, we have a compelling market experience. The product was approved in 1949 and was never patented, and it is still growing mid- to high single digits decades later. It demonstrates that leading iron products are extremely resilient brands. [indiscernible], but success does not happen by chance. This is hard work by many teams from R&D to manufacturing to commercialization. And we have started implementing a comprehensive strategy to sustain competitive advantage through targeted initiatives. This strategy has 3 major components. First, operating effectively in the new competitive landscape. It starts with tendering excellence. The majority of the EU business is standard driven. We have established a fast and agile governance process with input from our Behring and Seqirus colleagues. A well-coordinated approach across countries is crucial to prioritize standards and make the wide price volume decisions based on latest intelligence. And to ways or gain we have decided to hire for critical roles, highly skilled people coming from leading biosimilar and generic companies. Beyond pandering excellence, we are also focusing on the nonclinical differentiation of our products through, for example, supply reliability or commercial strategies like the launch of a [ certain ] brand in retail markets, for example, Germany. And we are, of course, focusing on cost of goods improvement to mitigate profit erosion. But the loss of exclusivity is not our sole focus. There is a lot more to Ferinject than just viewing it as an earnings erosion story following loss of exclusivity. There are still significant opportunities to grow the product. Starting with geographic and market expansion. We have the opportunity to grow the business geographically through new launches in key markets, such as China and Canada. In China, we expect successful national drug reimbursement listing in January 2024. We see a sizable opportunity in patient blood management and women's health. In Canada, we expect approval in Q1 '24. And for the launch, we plan to leverage the Behring footprint instead of commercializing with a partner, as Vifor has done historically. It will allow us to retain more profit within CSL. In the U.S., the launch of the heart failure indication is ongoing. And the initial market feedback is positive. The U.S. heart failure guidelines now support testing patients for iron deficiency with a Class 1 recommendation and treating them with IV iron with a Class 2A recommendation. And players are vitalizing the need to use Injectafer in 2 levels in heart failure with unrestricted access for 78% of the commercial patients and 86% of Medicare patients. The launch of this new indication is, by the way, a good example of the way we are maximizing the value of our strategic partnerships. Daiichi Sankyo and CSL Vifor have recently established a co-promotion of Injectafer in the U.S. to fully realize this growth opportunity. Last but not least, our life cycle management plan. We continue to invest in real world data and evidence to leverage our 25 million patient units of experience. We also plan to strengthen differentiation through more convenient presentations and potentially a game-changing [indiscernible] oral formulation. Very importantly, we continue our efforts to ensure that appropriate regulatory standards are being applied to approve follow-on products of non-biologic complex prices. So the key takeaway message for the iron franchise and Ferinject are, we are 100% loss of exclusivity ready, and we are confident in our ability to drive substantial volume growth. Turning to patient's blood management or PBM or sub strategic pilot. First, let's look at what PBM is all about. In the past 20 years, the concept of PBM has been developed with the recognition that the best thing for patients is to have their own blood in their own circulatory system. However, despite the progress of the science, the health problem remains. The other reliance on blood transfusion despite the potential downside. The sum of reliance translates into avoidable adverse outcomes, wastage of scarce blood supply and inefficient healthcare spend. And it is primarily due to the under appreciation of the impact of iron deficiency on surgical outcomes. And the suboptimal management of intraoperative bleeding by using less effective therapies rather than purified factor concentrates. But there is a solution, and the solution is PBM. PBM is an evidence-based approach to improve outcomes by preserving patients' own blood. And PBM is based on 3 pillars. Pillar 1 and 3 are about screening for diagnosing and appropriately treating anemia pre and postsurgery, making the patient better equipped to handle the physical size of blood loss during surgery and heal more rapidly after. And Pillar 2 is about minimizing blood losses throughout the patient care to avoid unnecessary transfusions. When fully implemented, PBM can deliver highly tangible benefits for health systems and patients. We have selected only snapshots of few key studies, clearly demonstrating that PBM can result in material reduction on whole blood transfusions in the 40%, 50% range, significant cost savings associated with surgeries and blood acquisition, meaningful reduction in length of hospital stay in the 15% range, clear improvement in patient outcomes with regard to MI, stroke, infection and overall mortality, all in the 20% to 30% range. And due to the well-established PBM benefits, there is positive momentum of PBM implementation, supported by the World Health Organization EU commission and multiple national guidelines around the world. So the stage is set for broad [indiscernible] PBM adoption. And based on our assessment, there is a substantial addressable market in the range of $4 billion to $5 billion. However, as too often in healthcare, premium guidelines are only partially implemented. Even though it will be a win for patients, healthcare professionals, hospitals, health authorities and payers, both medically and financially. This is where CSL comes into play. We are uniquely position in PDM to translate evidence-based medicine into evidence-based practice. The CSL Vifor portfolio addresses iron deficiency and iron deficiency anemia management, pre and postop to reduce blood transfusions and improve patient outcomes. And the CSL Behring portfolio addresses minimizing blood loos through optimizing hemostasis and attracting coagulation efficiencies, therefore, reducing surgical blood use. By bringing together this expertise and these products from Vifor and Behring, we can position ourselves as the leading and trusted blood health partner and make a huge difference. And we are not starting from scratch. Beyond our demonstrated expertise, we estimate that we are already generating $1 billion in revenue in PBM with our combined portfolio. But will the additional market potential will be unlocked overnight? No, changing healthcare systems and practices take time. The time is of the essence and to unlock this revenue upside as quickly as possible, we have developed an end-to-end go-to-market model. It does include improvement of product levels where necessary and evident generation to close remaining gaps in the medical detection. Policy shaping efforts to drive top-down changes, supported, of course, by constrained healthcare benefits and the increasing focus on clinical key performance indicators and quality metrics. Also hospitals assistance to help them overcoming implementation hurdles through data services and protocols. And last but not least, support of our commercial affiliates to achieve pull-through with the combined portfolio when the product label allows. Precedently, our strategic intent is to become a PBM one-stop shop for customers and partners with a financial offering combining products and services. So please keep in mind, PBM is a well-established concept supported by scientific and economic evidence and recognized by guidelines. There is a burning platform to act and get better patient outcomes with less resources. And we see ourselves have the expertise, the leading products, the commitment, the resources and the plan, and we are ready to unlock the substantial market potential over time. Moving to the third objective. Strengthening our renal disease position along the full spectrum of kidney disease. It means further expanding the portfolio from the [indiscernible] to prevention of kidney damage, treatment of CKD complications and transplant. It is estimated that the renal disease market will grow at a compound annual growth rate in the low double digits reaching $26 billion by 2026. This growth is driven by an aging population and increased prevalence of CKD risk factors such as diabetes and heart disease. And in our view, as already stated by Paul, the renal disease market won't be disrupted by GLP-1. In nephrology, we also benefit from our unique joint company model with Fresenius Medical Care. We plan to succeed in the near term through seamless execution of our product launches. In particular, building on the rapid uptake so far of Tavneos and Korsuva, Kapruvia with a significant wave of new launches in fiscal year '24 and beyond. And of course, take time for the launch of Sparsentan ahead of the expected EMA approval in early 2024. In the mid- to long term, CSL Vifor is also now in a much stronger position now that we are part of CSL as we can leverage CSL R&D pipeline, capabilities and resources whilst continuing to leverage our best-in-class business development expertise. To exactly do that, we have created a new therapeutic area, combining nephrology and transplant products currently in development, Clazakizumab and CSL964. To close, let me leave you with the following takeaway messages. Our key value drivers in the near to mid long term are well identified, top and bottom line synergies, market expansion and new launches and the pipeline and BD opportunities. In the near term, our revenue growth will be a bit choppy as we face a combination of headwinds and tailwinds. But CSL Vifor is and remains a terrific business. We are setting the foundations to drive mid- to long-term sustainable profitable growth. And I have no doubt that CSL Vifor, is and will continue to be a success story. I would now like to invite Paul and turn to the stage to answer your question on CSL Seqirus and CSL Vifor. Thank you.

All right. Thank you, Ken. And Herve, I really appreciate those insights. Here, I'm going to moderate the questions and here's how it will work. What we'd like to do is focus this Q&A section, specifically on CSL Seqirus and CSL Vifor. So all your other questions you have, please hold until that appropriate section because it just makes the flow better. What we'd like to do is there'll be mics that are going around the room. Just raise your hand. I'd like you to limit it to 2 questions to start. But then if there's time, we'll continue to come back and allow people to ask additional questions. We would appreciate it if you could state your name and affiliation, just so that it's captured appropriately, both in our notes and on the webcast. So with that, I think we have our first question, right here.

David Low from JPMorgan. If I could start with Herve, just on the competition for Ferinject. Can Herve, talk a little bit about the market dynamics you're expecting? I mean it was quite clear that your comfortable that it can be managed. But how many competitors -- where is -- when are we going to get some sense of the price decline that you're dealing with, please?

Yes. Thanks, David. So as I said during my presentation, we expect the market to continue to grow in line with historical trends in volume because of the fact that it is such an underdeveloped market. And despite the fact that in the end, we'll see less commercial investments in that space post loss of exclusivity, but we expect to continue on the same trajectory. It's difficult to anticipate the level of price erosion. It really depends how many competitors will enter the market. We believe it will be a limited number, and therefore, we don't expect the kind of pricing erosion you can see in other pharmaceutical markets. And at this point in time, only one follow-on product has been approved, and we are very close to the loss of exclusivity. So it's hard to predict. We expect more price competition, as always, post loss of exclusivity. But what will be the level of it remains an unknown.

And Herve, it's fair to say the market growth that you've seen historically is high single digit.

In volume, it's high single digit, and we expect this trend to continue.

So perhaps by the end of the year, you think you'd have a good sense as to how many competitors there will be.

By the end of the year, every day, every week, we will learn more about the evolution of the competitive landscape. It's possible that other products 1 or 2 will be approved because we know that they are in the regulatory process. And yes, by the end of the year, we'll know a bit more, and we will keep adjusting our strategy accordingly. We have to be very agile in that context. And we have this not only short-term vision that we have this more midterm, long-term vision because we really believe that the iron franchise can continue to grow in the years and decades to come.

Great. So just along a similar line for Ken, we've seen mRNA flu vaccines in development. We've seen some reasonable results in the last few months. Can I get you to talk about what competition you see on that front, please?

Sure. Thanks for the question. We're obviously closely monitoring the developments with mRNA include from some of the other companies out there. I think it's still not clear to me whether or not those vaccines will achieve the current standard of care in both efficacy as well as reactogenicity. So we're seeing some data readouts, which showed and looks kind of similar to existing products with a safety adverse event profile, which is probably inferior to current standard for care. And I think that is a difficult commercial proposition. I think that the adverse event profile for mRNA COVID vaccines was acceptable to us in the context of a pandemic when that was the only vaccine that was available. I think it's a different proposition when you're talking about repeat annual vaccinations when there are existing standards of care already in that space.

And Ken, just like to add to that. I mean our focus really what we can control is driving the next-generation differentiation, right? So AQIBC will set the standard of care. We are very confident on that in terms of a flu vaccine and anxious to get this Phase 3 rolling, but double the adjuvant, triple the antigen, right? That's not possible unless we had the yield improvements that Bill and his team have brought with operations. So the whole story is coming together for us to bring an industry-leading differentiated products, while still being in the game of sa-mRNA in a good way because what we've seen with our sa-mRNA for COVID is differentiated initial antibody levels and durability. So we have both streams going at the same time, David, which is incredibly important. So with that, I saw a question over there, and we have one here as well. Please.

Saul Hadassin of Barrenjoey. Maybe one for Ken. Assuming the [indiscernible] study goes to plan, when would you expect to have a product available for the Northern Hemisphere.

So for [indiscernible], we're going to Phase 3 this Northern Hemisphere. We'll be looking to register as soon as that and launch as soon as that. So it would happen in the next few years.

So not necessarily end of next year for launch?

I think that's probably a little bit too much detail that we share right now in terms of the launch timing, but it will be in the near term.

And just one for Herve as well. Herve, can you give us a sense as of today of the sales of Ferinject/Injectafer that is taking place, what percentage of those sales go to patients who are iron deficient due to kidney disease versus any other cause of iron deficiency?

So we are not communicating the split by indication. So the Ferinject sales or Injectafer sales worldwide come from various indications, heart failure, patient blood management, oncology, chronic kidney disease. So it's a product being used across many different indications, as you know, 1/3 of people in the world suffer from iron deficiency and iron-deficiency anemia, so it's a product very widely used across multiple indications.

And just a follow-up. So growth that you're seeing that high single-digit volume, is it high single digit across all of the different indications? Or is it in the indications outside of kidney disease?

So we see also cost indications. But of course, some of them are more developed than others. If I take the example of heart failure, it is already a significant part of our sales in Europe, about 20% of the total revenue versus in the U.S. where we just got the indication for heart failure associated with iron deficiency. It is still a very, very low percentage of our total revenue, and therefore, we have such a great growth opportunity in this indication. So it varies, but especially between the EU and the U.S. In the EU, it's relatively consistent with cost indication.

And so I'll just remember, part of the strategy is geographic differentiation, right? So you heard Herve say, Canada, you heard Herve, say, China, right? So not only will we expand in the indications, grow in PBM but we want to grow like CSL Behring has done for years in a geographic differentiation. So the market is growing at 7%, but we're growing into other geographies to support that. Please.

Andrew Goodsall from MST. Perhaps just picking up there, I think you're in a sort of 78, 79 countries at the moment before China. I guess just trying to understand how active you are in each of those countries. And as Paul just mentioned, how aspirational are you that you could become more active in those countries and then matching up with Behring, which I think is in excess of sort of 140 countries. What's that rollout look like?

Andrew, I think it's an important component because what Herve mentioned earlier, a lot of those markets we're in with a distributor model. Now we can start having a discussion of, is that the best model to move forward with, do we want to diversify our model, either grow resources specifically for CSL Vifor or to leverage existing footprints with Behring. So you heard the example in Canada, we want to leverage that existing footprint. So we're going country by country. We've looked at Russia, we looked at Canada, and we keep on marching through what that strategy will be relative to distribution partners, which have served us well, but also going on our own, which is really important for the market share and obviously, revenue and earnings realities.

And presumably, you're doing that as those agreements come up for relegation?

Correct. Exactly.

And Herve, you mentioned that I didn't quite understand it, that you've got 85% of private -- sorry, the other way around 78% of commercial and 85% of Medicare patients. Is that under former for heart failure. Is that right?

Yes. So thanks, Andrew. So in the U.S., Iron products do face so-called [indiscernible] and the really good news for the -- which means prescription of oral, then logos iron and then IV iron and then high dose IV iron. The great news for heart failure patients in the U.S. is that basically it's unrestricted. So all the -- pretty much all the commercial and Medicare patients have unrestricted access to Injectafer since we got this new medication in heart failure, which is critical because you need to reach very quickly within days and weeks, the appropriate level of iron in order to really fully benefit from the treatment. So we are very, very pleased that payers have understood the need to prescribe Injectafer 2 level in this setting. And we continue to work with them to convince them that this [indiscernible] policy are medically and financially not relevant also in other indications.

Thanks, Andrew. I think we had a question over here...

David Bailey from Macquarie. Just my first question. Just in relation to Ferinject and patient blood management, I think there's an ongoing real-world evidence study being undertaken. Just interested in the focus of that study and when you expect those results to come through.

So we keep generating real-world evidence data across all the Ferinject indication. Of course, going forward, we will have an even stronger focus on patient blood management. I don't have the exact time line on the top of my head regarding the outcome of this study. But it will be really a major area of focus as well as generating data, as I said, to continue to improve our product labeling so that we can not only change the health systems, but also promote our products accordingly in that patient management setting.

David, I'm going to have Mark or his team circle back with the exact timing on that.

Sure. With Venofer, there has been some generic competition as you alluded to. I'm just interested in your -- any thoughts you might have in relation to the efficacy of those products. And as you look forward to a potential generic competitor in Ferinject, just wondering if you've got any initial observations around their application bio-equivalents so far?

Yes. I mean I think it's really an important question of -- and if you look at how our approach is tender excellence, robust reliable supply and continued real-world evidence, right? So I spent a lot of time in my career in the biosimilars part of the business. You've got to constantly be out there understanding how the products differentiate in the market, not only from an efficacy viewpoint, but from a safety viewpoint, and that's critical. And that's what we'll be doing with our real-world evidence data. And that will allow us to make sure that we're continuing to deliver what we promise to patients, but also continue to show the differentiation. So it will take some time. But there are great case studies where in the biosimilars world where products that were thought to be equivalent, did not actually play out to be equivalent in adverse events and/or efficacy. And you got to be on top of that game to make that happen. We have another question? It's hard to see.

Laura Sutcliffe, UBS. First question is on vaccines, if I can. Are you willing to talk about any of the additional respiratory targets that you mentioned on the slide sort of beyond COVID, beyond flu, I suppose maybe people's mind float towards RSV and the like, but just anything there would be good.

Yes. I mean I think we could save some of that directly to Bill later on in the afternoon. But Look, we're looking at all those potentials. Obviously, RSV has had a few that have come out. We're trying to understand what their data has been. They didn't get necessarily arousing ovation. So can we differentiate like we've been able to differentiate with the COVID vaccine. That's going to be the question. So that's under evaluation from Bill and the team and the commercial team moving forward.

And then second question is a follow-up to first's question. I think historically, Vifor were pretty willing to disclose some information around what the distribution of indication were for the IV iron business? So I suppose, have you sort of seen a change in the balance of those indications since you've had the business or are we able to sort of cast back and sort of use Vifor...

Yes, I think let us go back. We can come back to you with that. I think it's just -- we don't have all of that in front of us. We haven't seen a change in that distribution given the short time frame. But let's come back with the exact facts and numbers for you. We're between questions and tea break. So let's just have a couple of more available outside for additional questions as needed. Okay. Please.

It's Lyanne Harrison from Bank of America. This is a question for Herve. You talked about blood patient management or patient blood management and having about $1 billion of a $4 billion to $5 billion market, which is still quite substantial. Can you talk about broader thoughts around how much market share you're looking to gain over what time frame -- we won't hold you to it. But also just to say what are the milestones that we might expect from the analyst community to show that you're getting those sorts of gains in that area?

Yes. I think the key milestone that you'll see is us continue to go after the indication expansion of the products to allow the whole suite of products, right? So you'll see us continue to look at the Behring products, continue to make sure we have the right indications in that space to bring things together because we have different approvals around the world. So the team has been spending a lot of time there. And then you'll start to see some of the digitalization of the services that Herve mentioned in terms of how do we approach that, working with Mark and the team. And then you'll start to see us roll out the commercial models, right? Because like many things, the commercial models will be different country by country, but also healthcare system by healthcare systems. So we'll come back over time with a road map of exactly what those milestones are. Our goal today was to really help people understand the opportunity. We think it's a sizable opportunity. It's unique for CSL to be able to deliver on. But give us some time to really build out day X, which we'll never get to, but quarter year what our milestones are going to be moving forward. But we have people dedicated to this and making sure between the 2 organizations, we move this forward with purpose. So if we take -- I think there was a question over here. Do you want to -- we'll take 2 more questions, if that's okay, because probably everybody needs a stretch break and some little caffeine. So let's go here. please? Sorry.

Steven Wheen from Jarden. Just a question for clearly, with the emergence of generics, that's going to happen a bit later in the U.S. given the IP protection you've got to 2026. I just wonder how you transition or have some confidence in the transition to that loss of that IP protection when all sales are being controlled by another party and just understand how they're positioning for it and how much you can control their behavior for the final parts of the contracted term?

I mean I just -- I would say you can add some more color to it. I mean, we have a great relationship with Daiichi, right? I mean we're out there. We're working with them. We will have a detailed plan that will be informed based on what we learned in Europe. I think it's a great interaction with both them and FMC. So it's not like it's -- they just pass it over the fence at us. We meet -- we go through it. We have a very effective steering committee. And we'll learn from the Europe experience, right? We'll learn. We'll see what the differentiation is and we'll have opportunity to influence what happens in terms of that pathway. So I think we're in a really good set. I mean our partners in this space are really good partners. I mean I've seen a lot of partnerships in my career. I think it's -- these partnerships are very strong.

If I may add, first, we have 3 more years ahead of us, and we have a growth mindset with our partner, American Regent and Daiichi Sankyo. Two, for now a few months, we have established a co-promotion. So we have even more steam in the game. So my U.S. field force is co-promoting Injectafer in the U.S., which really shows that our partner is keen also to maximize this growth opportunity. And then absolutely, to your point, we have to start preparing for the loss of exclusivity. These things do not happen overnight. We will have, as it is the case for Europe, a plan where we are 150% ready before the first follow-on products knock at the door.

Okay. If we can take one more. I think you are the lucky to time there.

Andrew Paine, CLSA. Your focus is very much on patient blood management in IV iron, but there's also opportunity in women's health. Just trying to understand, is there a reason for that? Is that a strategy of yours to focus on patient blood management sounds like a higher market to grow and kind of leads into your expertise in the area and allow potentially the generics to come through and focus more on the women's health and areas like that, where it's more difficult to grow the market.

I think it's an end at an end, right? I mean for today, we are trying to stress what we want to do with PBM. It's a very big market, and it uniquely uses the strength of CSL. So that's why we wanted to convey that. We can obviously come back at a future time and share our plans for women's health. Women's health is incredibly important for our journey and it's one that people benefit a lot from. So it's really just a matter of how much we can detail we can go into on a given day.

I think today, really, the intent was to talk about where we see this incremental revenue upside going forward. Women Health is and has always been a focus in CSL Vifor with some very clear success stories, especially to develop the fatigue segment in some markets like, for example, Switzerland. As we are about to launch in China, we are also investigating this market opportunity because based on my China experience, I believe this is a sizable one. And there are also clear interdependencies between patient blood management and women's health, especially when you start looking at postpartum hemorrhoids. So when -- if you think really more broadly about patient blood management, it does include some critical aspects of women's health.

Great. Well, thanks, everybody, for your questions. There's going to be more than ample opportunity to ask more questions out and about with the team, I want to thank Herve and Ken for their presentations and for their questions. We're now going to break. Yes. We're now going to break for morning tea. When we return, Andy Schmeltz, will be giving an overview, end-to-end overview of CSL Behring. If we could be back by in your seats around 11:00. So it's a quick break, but bathrooms are down the end of the hall to the left, and goodies are outside. Thanks. [Break]

Ladies and gentlemen, if you could take a seat, please, we'll make a start. So we still have some stragglers getting a coffee if I could invite you in. We'll make a start. Okay. Thank you. Welcome back. Our next speaker heads up our CSL Behring business unit, Andy Schmeltz, so I invite him to stage, Andy.

Good morning. I'm very pleased to be here today to talk to you about the end-to-end holistic CSL Behring business and how we're purposely focused from donor to patients to drive sustainable, profitable growth. As many of you know, I'm a newcomer to CSL, having spent 25-plus years in the industry across 2 companies. I made the decision to join CSL for 3 key reasons: One, the strength of the core business with a compelling track record and sustained leading position in plasma-derived medicines. Sure, not without both challenges and opportunities ahead, but many, many other biopharma companies would covet such a compelling core growth portfolio to build from. Number two, cultural fit. CSL is an organization with so many talented, committed, purpose driven, [indiscernible] , just get it done employees who have that competitive drive and are focused on delivering a bright future, including Paul McKenzie and members of the Global Leadership Group, you're hearing from today. And number three, true patient focus. I've spent the vast majority of my career in specialty areas where every patient counts. This mindset is truly shared across the company. CSL medicines make such a profound difference for people living with many otherwise devastating rare diseases. My CSL Behring responsibilities span plasma collection, manufacturing and commercial operations with an overarching emphasis on sustainable, profitable growth enabled by cohesive strategies and effective end-to-end P&L management. This scope of accountability reinforces CSL's commitment and my commitment to return Behring to pre-COVID gross margins over the coming 3- to 5-year time horizon. Plasma collection is all about growing plasma volume while concurrently reducing the unit acquisition costs. Our manufacturing capability is industry-leading, fractionating the precious plasma collected and transforming it into our portfolio of innovative medicines. Here, we're actively advancing efforts to improve Ig and albumin yield. And our commercial teams around the world are engaging with healthcare professionals, payers and key stakeholders to maximize the appropriate use of these important medicines and to deliver successful launches. Let me now share more color on our strategies and efforts for each of these 3 areas, so you can see why we are confident in CSL Behring forward prospects. I'm going to start with plasma collections and how we're growing plasma volume while reducing our acquisition costs. Here is CSL's collection network with plasma collection capabilities that are among the industry's largest and most efficient. CSL Plasma remains well positioned for continued growth and capacity optimization while balancing cost and efficiency. Currently, CSL Plasma international presence includes 12 centers in Germany, 3 centers in Hungary and 5 centers in China. In fiscal year '23, our investment in new plasma collection centers continued with the opening of 12 new centers in the U.S. and another 2 in Germany. And we recently opened our newest center in Landover, Maryland. This is our 322nd center in the U.S. Although at a slower rate than before the pandemic, we're continuing to grow CSL's Plasma collection network in the U.S. We recognize this is at a time when some of the other plasma players are contracting. And we're continuing to explore and prioritize opportunities to further expand our plasma collection capabilities. CSL's global plasma collections are back on track post-pandemic and continue to grow. After experiencing a 22% decline in collections in fiscal year '21 due to COVID, collections grew 24% in fiscal year '22 and 31% in fiscal year '23. We anticipate continued growth in record-setting collection volume in fiscal year '24 and in the years ahead. We're continuing to build off the momentum of fiscal year '23 with laser-like dual focus on sourcing sufficient plasma volume, achieving the collections needed to provide the critical raw ingredient for many of CSL Behring medicines and on optimizing costs, honing our efforts to drive cost to balloon during COVID down in a sustainable manner by reducing cost per liter or CPO as well as driving greater efficiency of our centers. In fact, we've already realized a 14% CPL reduction over the year and a 17% reduction from the peak in March of '22. Let me double-click on each of these 2 critical plasma collection components. We are pulling multiple levers to drive plasma collections growth all of which are enabled by cutting-edge digital capabilities that we've invested in. In targeting new and lapsed donors, we're increasing awareness about plasma donation through social media and the general media. We're offering differentiated fees, higher for the first 2 donations as an incentive yet that remain quite competitive, so that we can bring first-time donors in the door, and we're making it easier for new donors when they do come into our centers, leveraging an app and digital kiosks to manage preregistration, appointments and the required donor health history questionnaire. To improve donor frequency, we're focused on delivering best-in-class service as a differentiator. We're leveraging market intelligence to have the most competitive donor fees, we're customizing our donor app. To provide donors with a personalized experience that encourages them to get back in the door of one of our centers again and again. And to enhance donor retention, probably the best possible way to grow collections, we're using data and behavioral insights embedded in personalized messaging and incentives. And we're focusing our efforts on specific donor and specific local market cohorts. With our donor app, we can track what kind of messages best resonate with an individual and spurs them to take action. Are you someone who responds to special incentives? Or are you motivated by reminders about how plasma donation helps patients? Are there times when you don't tend to donate as often and need more reminders? Using our data and insights, we can increasingly customize our interactions with donors to help build retention. Bottom line, we're pulling the right combination of all these levers in purposeful synchronization and recalibrating them frequently based on local center-specific dynamics, all to drive plasma collection volume. Shifting gears to plasma costs. The pandemic created or the pandemic raised the cost of collecting plasma on multiple fronts. We needed higher fees to incentivize donors to come into our centers. Fewer donors meant our centers weren't operating at or near capacity and forced us to absorb more costs. And with so much competition for labor, we needed to increase wages to attract and retain staff. Simply put, COVID changed the plasma collection cost base. But with the pandemic now in our rearview mirror, CSL Plasma has a clear path to continue to drive down costs over the next 3 to 4 years. We are optimizing our fee structures by moving to a system that can individualize donor payments across any number of characteristics, allowing for customized differentiated payments specific to an individual donor. We're focusing on improving center productivity via systematic data-led approaches to identify issues and bottlenecks. We're implementing a number of solutions including optimizing center hours of operation, improving employee scheduling and workstation assignments, and we're standardizing new donor flow across all our fleet. And we're driving greater output at our centers with integrated solutions for optimizing both donor and employee experiences to reduce variability. Pilots are underway and enhancements are going to be rolled out fleet-wide over the coming 2 years. Now let me touch on 2 very important and interconnected efficiency opportunities. The individualized nomogram and the Rika plasmapheresis system rollout. The individualized nomogram will be an important step forward in plasma collection and an improving margin. A nomogram is the target collection volume that a plasma collection device is approved to set for each donation. Traditionally, a donors nomogram has been based on weight alone. Both Haemonetics and Terumo who provided devices used in our centers have been working on an individualized nomogram, which will allow factors like hematocrit, the percentage of red cells in a person's blood and height to be considered in calibrating the target plasma collection volumes for our donors. Pending regulatory clearance CSL expects to implement the individualized nomogram in fiscal year '25. And at steady state, upon full rollout across our fleet Individualized nomogram will enable us to calibrate plasma collection volume at an individual level and to collect on average about 10% more plasma from each donor. Over the short term, CSL will benefit from the recent release of nomogram A, which yields about 1.5% more plasma volume per donor on average. Now I also want to share an update on the rollout of the Rika plasma donation system. We continue to carefully monitor the performance of the new Rika Plasma Donation System technology already present in about 15 of our plasma centers, and we continue to look forward to deploying it in fiscal year '24 and fiscal year '25. Now Rika offers a number of benefits. It provides an enhanced experience for donors, resulting in fewer donor deferrals and 30% reduced time in the chair, as we call it. Now I've had a chance to visit a number of CSL Plasma Centers across the United States over the past few months. And I've had the opportunity to personally donate plasma on the legacy plasmapheresis device as well as on the new Rika machine. The 30% reduction in donation time is real, and I'm sure it's going to delight our donors. Rika's advanced control system enhances donor safety by monitoring the donation process and providing alerts and visual cues that guide the operator. It makes automatic adjustments during each procedure, enabling a more seamless operator experience. Improper collection volume due to employee air is reduced by 85%. And as I've already mentioned, the Rika rollout is time to incorporate the individualized nomogram. Adding this technology to the Rika device is expected to improve the average donation yield by about 10%. And another benefit of the Rika is on the environmental side, reducing biohazard disposable waste by 10% to 15%. Now our Rika Deployment plan incorporates scale, scale-up considerations and automation of production as well as evaluation of the 15 centers that we've already converted into the new technology. We remain committed to the Rika system and share our focus with Terumo on innovation, collaboration, donors and the patients who ultimately benefit and rely on the therapies made from plasma. Our next deployment stage gate with Terumo is in December. So stay tuned. Now pivoting back to the bigger picture. I hope you can now appreciate everything we're doing to sustain and advance CSL's industry-leading plasma collection capability. We're continuing to grow plasma volume by leveraging technology to personalize the donor experience as well as by advancing the rollout of the Rika Plasma Donation System and the transition to the individualized nomogram. And at the same time, we're moving actively to optimize costs. Again, leveraging technology to enable enhanced scheduling, donor fee customization and efficiency improvements across our fleet of plasma centers. We look forward to continuing to advance these dual priorities with a relentless focus on collecting the plasma needed for the patients we serve. Now let's shift gears to the next critical area in the CSL Behring journey from donor to patient, and that's manufacturing. This is a high-level look at our CSL Behring manufacturing network. All of our manufacturing sites perform base fractionation for immunoglobulin Ig and albumin production, which provide economic benefits and network resiliency for these 2 core products that we manufacture out of every liter of plasma that's collected. CSL Behring manufacturing has seen significant expansion since 2020 with new fractionation, Ig and albumin capacity coming online in Broadmeadows and Bern and Marburg, starting up new fractionation capacity. I visited Broadmeadows just last week and had the chance to spend time in Marburg in September and Kankakee in July. The upgrades and expansions at each site are truly impressive, and we're excited to utilize the added capacity to benefit patients. For CSL Behring, a focus on Ig yield improvements is critical to improving margins. In fiscal year '23, Ig yield reached an all-time high through purposeful continuous improvement efforts from our operations. Moving forward, CSL has 2 areas of focus for Ig yield improvements. Horizon 1, over the near term, we're aiming for an incremental 5% lift to Ig yield. In Horizon 2, over the mid- to long term, we're aiming to deliver an incremental 10% to 15% improvement in yield growth. Horizon 1 is the primary focus of our manufacturing teams with support from R&D, and Horizon 2 is a primary focus of our R&D teams in collaboration with manufacturing. You'll hear more about Horizon 2 this afternoon from Bill Mezzanotte. So let me touch now on Horizon 1. To drive Horizon 1 improvements leading to improved Ig yield, CSL is focused on process robustness and improving IP recoveries of our existing processes. We continue to pursue incremental continuous improvement initiatives by having a mindset that looks for opportunities to drive year-over-year Ig yield growth within our current regulatory filing boundaries. We work to embed this important continuous improvement mindset at all levels from frontline workers to our senior leaders through operational excellence across the 6 areas depicted here. In terms of productivity, automation efforts are playing a role in helping us reduce cycle time and to increase capacity. Looking at service, we're focused on having reliable lead times throughput and capacity while maintaining efficiency, so we can increase our level of on-time in full delivery. Standardization is enabling us to have better reliability, which means we can reduce inventory and have lower working capital commitments and requirements. Having our people highly engaged in our continuous improvement efforts is imperative. Our operators and analysts are empowered to identify issues and to develop solutions. Our focus on quality and right first time is eliminating repeat deviations and reducing the need for write-offs. And in terms of sustainability, a more efficient operating system translates into reduced rework, less waste and more efficient use of environmental resources. One of the points I want to convey today is that CSL has made significant investments in growing our plasma collection network and our manufacturing capacity, putting us in a position, an excellent position to meet demand. In the last 8 years, the number of CSL plasma collection centers has grown by nearly 160%, and we've brought significant new capacity on with expansions in Bern, Broadmeadows, Kankakee and Marburg. And as a result of these timely and forward-looking investments, we're now in a great position to reap the rewards and to be able to reduce near-term capital expenditures. In fiscal year '24, the stage is set for CFL to reduce our CapEx spend by 30%. Okay. Let's now move on to the final yet critical part of the CSL Behring journey from donor to patient and for sustainable profitable growth and that's commercialization. Our Behring commercial organization delivers our life-saving medicines to patients in more than 100 countries around the world. The CSL Behring commercial business consistently delivers on its promise to patients and shareholders supplying life-saving medicines to people living with rare and serious diseases. In fiscal year '23, Behring delivered 12% growth and generated $9.3 billion in revenue. And Behring is poised to continue with a strong growth trajectory in the years ahead. With compelling growth drivers across our immunoglobulin, Hemophilia and Hereditary Angioedema portfolios, which combined represent 70% of total Behring revenue. Let me share with you why we're so bullish on our forward prospects in each of these important areas, starting with Immunoglobulin or Ig. First, we see significant opportunity for continued global Ig growth given the significant variability of Ig usage rates across geographies. Ig utilization per capita is most robust in the U.S., Australia and Canada, relative to many other countries. And since the prevalence of the diseases treated by Ig generally is consistent across the world, the relatively low usage rates in Europe, Japan and many other countries reinforce that Behring can continue to grow global PRIVIGEN and HIZENTRA utilization with sufficient sourcing of plasma. CSL is committed to this, addressing these unmet patient needs around the world. PRIVIGEN and HIZENTRA growth opportunities span both current and new indications, primary immunodeficiency or PID and secondary immunodeficiency or SID, are the largest indications today for the Behring Ig portfolio. In treating these particular diseases, PRIVIGEN and HIZENTRA act to replace proteins that patients do not make on their own. And because Ig is polyclonal, it's an effective replacement therapy for patients with deficiency and cannot be replicated by a recombinant approach. Let me repeat that. In diseases where Ig is utilized as replacement therapy, such as PID and SID, use of recombinants is not a viable approach. In the major markets, such replacement therapy is the source of business for about 75% of HIZENTRA and about 55% of PRIVIGEN. Now in immune thrombocytopenic purpura or ITP, myasthenia gravis and chronic inflammatory demyelinating polyneuropathy or CIDP. Ig acts as an immunomodulator rather than as a replacement. Here, Behring competes today with other Ig companies and potentially in the future with other modalities offering an immunomodulatory effect. That said, these emerging entrants likely will benefit only in the subset of CIDP patients who are intolerant to or not well controlled with Ig therapy. We expect PRIVIGEN and HIZENTRA to maintain compelling leadership positions in CIDP and in all core indications given their well-established and well characterized benefit risk profile, their proven long-term protection, physician clinical experience and strong placement in treatment guidelines. In CIDP, in particular, we look forward to competing with FcRns, both offensively and defensively, reinforcing the compelling benefit risk profile of Ig therapy. And beyond current formulations and indications, we're actively advancing our efforts to expand the utility of our Ig portfolio via real-world evidence where data abounds for both PRIVIGEN and HIZENTRA as well as with the upcoming U.S. launch of the HIZENTRA 50-milligram prefilled syringe and we're also exploring additional new indications for HIZENTRA, including dermatomyositis, currently in Phase III with study readout anticipated over the coming year. We expect the overall global Ig market to have mid-single-digit compound annual volume growth over the coming 5 years. With continued supply and improved diagnosis rates in PID post-COVID. And within this growing Ig market, both PRIVIGEN and HIZENTRA will gain share, outpacing the market with high single-digit portfolio growth annually over this time frame. We're proud of our Behring Ig leadership position, and we're poised not only to sustain it, but to expand it. Shifting gears to Hemophilia B, a rare genetic bleeding disorder resulting from the absence or deficiency of coagulation Factor IX, impacting approximately 38,000 people worldwide. I just spent a few days before traveling here to Australia with over 100 U.S. children and teens suffering from bleeding disorders, such as hemophilia. And while the field has certainly advanced over the past decade plus with more treatment alternatives, the unmet needs for this devastating disease remain, particularly for durable protection it doesn't adversely impact quality of life. We're excited to offer both IDELVION and HEMGENIX as important alternatives for people with Hemophilia B based on their specific situation, treatment goals and priorities. IDELVION is a well-established standard of care with $700 million plus in revenue in fiscal year '23, 13% growth and with 50% patient share. IDELVION provides the highest factor levels for the longest period of time of any Factor IX replacement therapy with a full range of personalized dosing options. And we are so excited to have HEMGENIX, the first hemophilia B gene therapy now launched in the U.S. and approved in Europe that eliminates the need for routine prophylaxis therapy. We have several patients who have received HEMGENIX in the U.S. to date, and all are doing well in the weeks and months post administration. And we have many more HEMGENIX prescriptions and referrals in the queue. Now a HEMGENIX referral is a prescription that also includes patient information, insurance data, dosing requirements and the physician signature. A referral is used to conduct a benefits investigation. So just to put this momentum into context. 1/3 of the HEMGENIX referrals came over the first 240 days post launch. Then another 1/3 came over the next 60 days in July and August. And the remaining 1/3 came during the just ended month of September. So 1/3 in the first 240, the second third in the next 60 days and the equal amount in the most recent 30-day period. Clearly, we're making progress, with more patients and their physicians aware of and enthusiastic about HEMGENIX therapy and its curative potential. Additionally, about 40 U.S. hemophilia treatment centers are trained for HEMGENIX administration. And HEMGENIX received a very positive assessment from the Institute of Clinical and Economic Research, ICER which is the leading health technology assessment authority in the United States and already has coverage for about 75% of U.S. commercial health plan lives. And we're in active discussions with several European reimbursement authorities. That said, we're working closely in the U.S. with all stakeholders to overcome the hurdles that we well anticipated in the launch of such a transformative onetime curative therapy. We're seeing firsthand the inefficiencies of the U.S. healthcare system. With some middlemen, stakeholders seeking profit opportunities and others wary of being stuck in the way, stuck with the bill. So we are making progress. We're confident that HEMGENIX as the first gene therapy for hemophilia B with a compelling benefit risk profile is going to make a profound impact for many, many patients. Our bright expectations for HEMGENIX over the midterm horizon remain unchanged. We expect the global hemophilia B market to have mid-single-digit revenue compound annual growth rate over the coming 5 years due to the steady prevalence of the disease and the launch of advanced therapies, including gene therapies. And within this hemophilia B market, the Behring portfolio is poised to grow to 35% to 40% share, outpacing the market with high single-digit growth annually over this timeframe, reaching well over the $1 billion threshold. It certainly is an exciting time for people living with hemophilia B. And finally, let's touch on Hereditary Angioedema, or HAE. Another rare genetic disorder that results from missing or low levels of a protein called C1 Esterase. HAE can cause attacks of swelling and often paning in specific areas of the body. An HAE laryngeal attacks that block the airway can be life-threatening. Today, there are approximately 12,000 patients treated for HAE across major markets. And despite treatment advances delayed or under-diagnosis is an unfortunate reality. And despite the availability of both acute and prophylactic therapies, prophylactic options today are not fast acting and don't have an immediate effect. Now as with Ig and hemophilia B, Behring offers a portfolio of compelling therapeutic options for HAE patients with BERINERT and HAEGARDA and with Garadacimab on the horizon. HAEGARDA addresses the root cause of HAE replacing missing or dysfunctional C1. It generated $450 million in fiscal year '23 revenue and continues to gain new patients holding 20% plus share of the HAE prophylaxis market. And we're very excited, very excited to be filing Garadacimab, the first Factor VIIa (sic) [ Factor XIIa ] therapy for HAE prevention working at the top of the cascade, offering the first true 1 dose, once-a-month therapy in less than 15 seconds with a prefilled injector pen. Garadacimab is the fast-acting prophylactic HAE medication that's been elusive up till now. CSL is in the process of advancing regulatory filings, and we look forward to U.S. and European approvals and launches in fiscal year '25. We see the HAE market growing at mid-single-digit annual growth rate over the coming 5 years due to improved diagnosis rates and new prophylaxis therapies. And within this growing HAE market, the Behring portfolio is poised to capture 30% share or more with BERINERT as the on-demand treatment and HAEGARDA as prophylaxis for patients who value natural C1 replacement and soon with Garadacimab, which is poised to be a novel best-in-class therapy for prophylaxis. The Behring HAE portfolio will outpace the market with high single-digit growth annually over this time frame, also reaching well over the $1 billion mark. It certainly is an exciting time for people living with HAE. I've now reviewed with you the forward growth drivers for 70% of the Behring portfolio. But yes, there is more to share. Albumin grew 11% in fiscal year '23. KCENTRA was up 10% and is poised to overcome competitive pressures with a potential new important indication in trauma on the horizon. And Zemaira revenue grew 24% in fiscal year '23 and the launch of a 4 gram and 5-milligram vial line extension is coming in the U.S. Zemaira is also currently being studied in Phase III for prevention and treatment of acute graft-vs-host disease for stem cell transplant patients. Stepping back, I hope you now better appreciate the strength and the robustness of the overall Behring portfolio with depth, leadership and continued innovation across rare diseases, enabling strong top line growth prospects over the coming years. Okay. Let's bring it all together. Behring is the core of CSL and is poised to continue to drive sustainable, profitable growth for the company from donor to patients with many levers in process to return the company to pre-COVID gross margins over the midterm with potential margin upside beyond. We will grow plasma volume and reduce plasma costs through the effective deployment of the Rika Plasma freezer system and individualized Nomogram over the coming years, enabling us to collect 10% more plasma on average from the current donor base as well as leveraging enhanced digital capabilities and operational excellence. Our manufacturing and R&D teams will improve Ig and albumin yield by up to 20% in the long run. By delivering Horizon 1 continuous improvement efforts underway and Horizon 2 process enhancements which will require regulatory review and approvals. And our top line will flourish by growing key medicines and delivering successful launches. The stage is set for high single-digit revenue growth outpacing the market for our Ig hemophilia B and HAE portfolios. So there you have it. The Behring business is robust. The Behring business is strong, and we are well positioned to deliver sustainable, profitable growth and a return to pre-COVID gross margins over the coming 3 to 5 years. Thank you. We'll move now to Q&A, and I'll invite Paul McKenzie to come up and join me.

Dave Stanton from Jefferies. I note in the presentation for Ig, you talked to a 5-year volume CAGR for Ig. Could you talk to where you see price during that period. Should we be thinking the historical low single-digit price increases or something else please.

David, thanks. And I think we've always reiterated CSL Behring never wanted to be the price leader. We want to drive volume, and we'll continue to take price at that low single-digit CPI-type level. Now obviously, if there's tenders or market opportunities where that makes sense, we will take price there. But our assumption is it will be low single digits.

I think, we communicated our expectations in fiscal year '24 for mid-teens volume growth with modest price and I think the pricing environment, as Paul said, is becoming increasingly challenging in some markets, but where there's room to take price that's in line with the market, we'll do so.

And as a follow-up to that, should we expecting a continued mix shift to higher price version over the medium to longer term? .

Yes, I think as we acknowledged in fiscal year '23, we did have a unique situation in terms of the PRIVIGEN and HIZENTRA mix. But we do think the trend of moving more towards HIZENTRA will continue, David, now that we're post COVID. I think it was just a unique set of circumstances where we ended up growing high 20s in Europe, and that was predominantly PRIVIGEN because that was the clinical preference there. So you will see -- continue to see the shift back to HIZENTRA.

Yes. I think Hizentra is probably more impacted by COVID than PRIVIGEN because about 75% of its use is in PID, primary immunodeficiency and through the COVID, patients weren't going to visit their doctors and diagnosis of PID is already challenging. So COVID just made it even harder. There was this lull in diagnosis of PID it's back now about 80%. We see the trend increasing, but that's a little bit impacting the HIZENTRA growth. But there's 60% new brand -- new patient share for HIZENTRA and so when someone moves to a subcu Ig, HIZENTRA is the preferred brand. And then, of course, most of our forward life cycle for expanded indications and utility is in HIZENTRA with dermatomyositis, as I mentioned, this 50-milligram prefilled syringe, which is going to be super helpful and then we're also exploring additional indications that will come downstream.

Steve Wheen from Jarden. I just wonder if you could talk to the problems with the Rika platform and what is causing the delays. They seem to be continuing. And what sort of opportunities or leverage do you have over Terumo now to maybe get some benefit out of these delays perhaps around things like extending your level of exclusivity for this platform?

Yes, Steve, I look at Terumo as an opportunity, right? We're continuing to see great things as we execute. We're now over 15 centers. We've been rolling out more centers. As I explained with time, there was a series of issues, right, starting from initial supply chain issues coming out in terms of the consumables, then we had some device parts availability tied to COVID as well. And then finally, it was kind of bringing the whole ecosystem together under reliability. I think at the full year, I shared we were roughly low 90% reliability. We wanted to continue to see that grow before we would commit to flipping the switch to the entire fleet. The good news is we continue to see that move. We're in the 94%, 94.5%. So approaching our stage date of 95%. And that's why Andy has been able to comment that we're now dialing in on that final rollout schedule as we see the reliability. Terumo has rolled out additional software upgrades. They've rolled out some device supply chain challenge parts that they fixed. And now we're in a position of, as we look to go over that 95% threshold to be able to lock in with them and then share with you at the half year, our definitive rollout schedule. So I think there's lots of opportunities. Terumo is a good partner. We have worked with them now for several years. I have certainly become personal friends with Sato-San, the CEO of Terumo. We both share a love of Ultraman. I don't know if anybody remembers Ultraman as a kid. Maybe I'm sure those can Google it and remember Ultraman, but it's just as a side note, but look, they have brought the full power of Terumo, and we're very bullish on what the opportunities that Rika will do for us. We rolled out the new nomogram, not the Nomogram I, but the Nomogram A, and again, we're seeing good performance in the centers, and that performance continues. So we had a last software upgrade a couple of weeks back, and we expect to see that put us over the hump with reliability.

I guess the way I characterize this is we need to go slow so we can go fast and that look so much from a business continuity is having the right plasmapheresis machines that can enable us to continue the flow of collections of plasma and plasma volume that we want to be -- as we make the transition, we want to be absolutely essential that we've got our folks trained, that the machines are going to work as we expect them to do, that we've got all the soft goods that we need. And so we're sorting through all those issues with Terumo. But as we then make the transition, I have every expectation, it's gonna come in time with Nomogram I, and we're going to reap the benefits. So going slow to go fast.

Yes. And can I just -- the follow up on that? I mean it's clearly come at a cost to yourselves with regards to having to extend the arrangement with Haemonetics, which I can't imagine was the most beneficial contract extension you've ever done in terms of cost. So just looking at why is that you can leverage these delays that's not any of CSL's fault to help offset the impact that it's had on your business?

Well, first off, I just want to clarify, Haemonetics has been an extremely good partner and continues to be a really good partner, right? So we -- and I don't want to share individual contract specifics, but the cost of Terumo and Haemonetics are on par during this period. There was no change in the Haemonetics direction in terms of how we work. And look, we'll continue to work with both suppliers to make the best of the transition and make sure that we give the best service to our donors.

This is Saul Hadassin, Barrenjoey. Two questions from me. Just on that outlook for industry growth for Ig, 6% to 8%. Can you talk to what you're seeing across those indications, whether there's any particular growth coming from, say, the nonautoimmune indications, SID in particular? Is it evenly distributed across all of those wedges.

Yes. So we didn't -- when we did the calculation, it was overall markets, I don't have in front of me the specifics by indication. There's expansion opportunities with improved diagnosis across all the indications. I think SID in particular, as there is newer cancer medicines that impact the immune system. I think that we will continue to see increased growth in the SID space in particular. And I think that goes for autoimmune diseases, new medicines for autoimmune diseases as well. But just about every indication is growing.

And to Andy's earlier comments about P&ID, right, we're still seeing the diagnosis rates come back in the United States alone. So you'll see growth from just that increase of diagnosis rate. SID will be a growth engine and we continue -- look, we have a great history in these other, what Andy called immunomodulated diseases. And we've got years of history, patient experience, safety, so I think we'll be in very good shape to continue to grow those markets as well. So it's an aggregate number, but we don't see any one indication bearing differently from what our experience has been and what our expectations are.

And in fact, we hope -- we look forward to adding more slices to the Ig pie as we expand our indications in other areas. I mean, dermatomyositis is there's no approved like therapies. And often, you see in specialty diseases when there is a new indication of approved therapy, surprisingly diagnosis of that disease grows. So we'll grow the pie and increase the slice of the pie.

And then just as a follow-up on that note, CSL has invested a lot over the last 5 years, particularly in base fractionation across the globe. Can you give us any sense as to what your capacity utilization is today? Or how much headroom do you have before you need to stop then thinking about the next wave of capital investment?

Yes. I think at base fractionation, we're very well positioned. I think not only in terms of our ongoing initiatives, but the capacity we brought in. As I shared before, what we did was take advantage of that new fractionation to retire older assets, right? So if anyone's been the building 4 in Kankakee, -- it was a 70-year-old facility that we were able to retire appropriately. So some of the capacity we added on was really to replace capacity that had really gone well past its useful life, still great capacity, but we had to replace it. So we have room, and we -- look, the most important thing for us is the operational excellence that we continue to drive, but fully automated facilities give you a different strength in terms of your OE, operational excellence agenda than a manual facility does. So I think we'll continue -- what our goal is, is to continue to give ourselves back capacity through yield, through OE, so that we can continue to defer in our network strategy, the need for capacity. So it's really about that staying ahead of the game in terms of all the process nodes moving forward. So I think we're in a really good position from a capacity balance viewpoint across the network.

And as I mentioned, our expectation for high single-digit volume growth over the 5 years, and let's assume that continues out beyond the 5 years, which we have every expectation that it could that we're -- we believe we have the capacity and plenty of lead time if we decide downstream that we need more.

And the other only comment to make in Jeff Ball is here our Sustainability Officer, but also our network strategy. What we want to do is continue to make sure, as Bill and the R&D team make their changes moving forward that we can be very agile with what we bring on and how we balance that. But we've also fundamentally retooled our engineering capability so that when we decide we need capacity, we can do it in a modular way, and we can do it at a significantly reduced time, right? If you saw the cell culture facility, Ken brought up earlier, right? I mean, I was out there on Saturday and Tullamarine, it's ahead of schedule. It's ahead of budget, and that's really because of the fundamental change and how we engineer and execute the project. So we'll be able to respond quickly, but we'll be able to respond in a different way in terms of how we execute capital now with our strategy.

Chris Cooper, Goldman Sachs. You alluded earlier to some of the hurdles you've seen with stakeholders on HEMGENIX in the U.S. rollout that were well anticipated. Could you please just elaborate a bit further on those and how you seek to resolve them, please?

Sure. So in the U.S., once a physician and a patient have decided that HEMGENIX therapy is appropriate for them when they get this referral and then do benefit verification. There's lots of -- I call, middle men stakeholders from physician, the group practice that they're part of or the hospital institution, the integrated delivery network, the hemophilia treatment center sometimes is involved, the health plan, the specialty pharmacy, all these different players in the U.S. environment have to align on this curative therapy. And as I mentioned, some are looking to profit with the average selling price plus a margin on such a transformative therapy, whereas others are worried if they lay out the money, then are they going to get stuck with the bill. And because this is the first time for these institutions and for these channels to experience gene therapy, we're having to work to give everybody confidence. And in some settings, it works very smoothly. But in other settings, you've got -- it takes time and then things get stuck in bureaucracy with individual contracts and you call it single case agreements. But that was all anticipated. And in this first, I think, a year or two, it's not like once that channel completes it for one patient, it's not like there's 10 or 20 hemophilia B patients that are looking for HEMGENIX in -- next up in the queue. It's likely a onesie or a twosie or a threesie in each local paradigm. So that's what we're working through right now. But we're having success. And I think as we learn from it and the different players can talk to each other, it's going to get more straightforward. That being said, I'm excited to see the process play out for reimbursement in many other markets in Europe because once there is reimbursement granted, it should flow much smoother given the kind of paradigm of healthcare in many other countries. And so that's why I characterize this as it kind of exposes the inefficiencies or dysfunction of the U.S. healthcare system.

It's interesting, too, some of it is just an individual cost center in a hospital, ends up losing the patient, meaning that if it's a Medicare cost account and now the patient goes on gene therapy, they don't end up having that patient later on. So you have the struggle of -- in a cost center, they have to show year-on-year growth that value in the healthcare system, right? And unfortunately, that's how many of the cost centers are valued, not just the patient outcome. So there's this natural tension of, hey, IDELVION is a great product, great standard of care. I get to see the patient, I get to infuse them. I kind of have them for their life. And now you're telling me I'm going to give them gene therapy, and I'm not going to have them in my cost center. Theoretically moving forward. So there is some unique tensions when we sit and talk through the contracting realities within the U.S. hospital system. The good news is when we talk to patients, and I was at the same JNC, Junior National Championship getting the game with Andy, right? Patients are very excited about it, right? They want options. I mean it's really heartbreaking to me to sit at a dinner and find out a kid cannot participate in local sports because the sports association doesn't want to have to deal with a hemophilia kid. I mean we actually had a mother at a table crying because this was the first time our son has really been able to participate now. He participated in the best sports swimming, some were participating in golf. But they were really saying how it made a difference for them. But -- so patients are excited. We're excited to get on with the clinical trial for that 12 to 18 year old, but it's going to take some time to get the contracting system to really work its way through.

So just to kind of put a pin on it, the receptivity for patients and physician cenegenics has been very, very strong. And when there's that level of enthusiasm, we will work through these issues. They will get worked through. It will become smoother, less friction. And we will achieve the expectations over time that we expect for the subset of hemophilia B patients that decide that gene therapy is the right solution for them.

Just to come back to Rika quickly. I know the original open expectation when the program was first announced was a rollout within about a 12-month period. Assuming reliability, not just up north of 95%, as you expected and you sit down with Terumo in December. Is there any reason to think that the rollout would need to be any slower than that 12 months that was initially proposed.

Okay. Like I said, we'll come back. I want to really make sure we have all our eyes tired and t's cross, and we'll come back after our December final negotiation with Terumo to say that. But I mean, in terms of our readiness, we're ready. I mean we've been able to demonstrate that. It's really about Terumo making sure they can do the device builds, and we just want to make sure that's iron cloud. So I don't think you should be far off in that expectation, but I don't want to give you an exact yes until we really work through that build-out schedule.

It's David Bailey from Macquarie. Just on Garadacimab some good results there in relation to attack reduction and also a portion of patients being attack-free. I suppose I'm just wondering whether you think -- this is a product that could drive conversion from on-demand to prophylaxis. So those patients currently on demand. And then secondly, potential switching from existing products, whether it's HAEGARDA and/or [indiscernible].

And maybe I could ask Bill from a medical viewpoint just to comment on what excites him about the product, and we have a little station up here to put the GLG members to task. So and then we can talk about the market itself.

Yes. Thanks for the question. We're extremely excited about garadacimab. And it's the patient convenience, the high efficacy, the rapid onset of effect, all of those features really screened for a big uptake with the therapy. It's in an auto injector, our first auto injector that we'll be bringing to the market. So your question, I think, was can we convert the on-demand because of it? Well, I think a convenient patient-friendly therapy may be one that can do it. There's an oral therapy out there that's been converting some of them. I think if you measure the combination of convenience and efficacy, this is going to be far better than that.

And the market has definitely been expanding in terms of get moving away from acute treatment to ongoing treatment. So I think we'll continue to see that trend, right? The market has expanded wildly in that area.

Maybe just also on licensing products, HEMGENIX is a pretty good example of a competitive risk for your license and have had some success with -- is this something you will continue to consider going forward? And specifically, would you consider looking at an FcRn?

Yes. Look, strategic partnerships as a key part of our strategy, right? We'll always look for partnerships at every level and every part of the business that we do, right? It's how you get leverage in today's modern world. You can't do everything yourself, and it's really important to be able to access capabilities, capacities, new science across the board. We've looked at every FcRn and out there to date, Trust me. We've turned lots of stones. We don't see anything at this point that's differentiated, but never say never. We'll continue the BD team, Ken's team and Bill's team -- we'll continue to look and work with commercial to see whether there's something that would add value. Our goal at CSL isn't to be a me-too company though, right? Our goal is to differentiate and make sure we're driving value to patients. So when we see that, we'll go after it like we have with uniQure, like we had with our [indiscernible]. And I think that's the kind of spirit that you want to see. It's easy to do deals. It's hard to do good deals and that's what we want to do.

Laura Sutcliffe, UBS. This might be the stupidest question that gets asked all day. But you mentioned that PID diagnosis is 80% or something of what it was pre-Covid. With your expertise and experience, why is it not 100% at this point?

It's really -- I mean, Andy can comment for it. It's just people getting back into the healthcare system. COVID changed lots of behaviors, right? I'm sure even for this room, the number of days are in the office and these type of things probably have changed and it did change how people engage with the healthcare system. But remember, there's a continuous kind of exposure of the patient to the doctor. And during COVID they were less likely to have ear infections, less likely to have pneumonia. So it tends to be, you have to look at that trend and then say there's an underlying issue versus just treat that disease at that given point, so I think some of it is just the continuity of exposure. Some of it is COVID that the fact that people were less exposed. They were at home. They weren't getting as sick and that makes a difference as well. So I think there's lots of trends that contribute to that. But I think the healthcare system is coming back in full order. And I think people are now out and about again and they're going to get exposure to disease. So it's not a dumb question. It's actually a very good one.

And I think just to add that PID is hard to diagnose, right? Someone has to have -- present to a doctor with recurrent infections for the doctor to make the connection that they're not just having an acute infection independent of each other, but there's something going on here with the patient's immune system. And as Paul said, during COVID, First of all, people didn't want to go to the doctor number two, they were in masks there in their house, so they weren't presenting with infections. And so an already tough to diagnose disease kind of became a little bit tougher to diagnose. And we track this as well. And so now, depending on the country, the kind of return to normal, people are out there, they're presenting themselves with more infections. And that's why we see globally about 80% of what pre-Covid was, but it's been growing. So we think that we'll get in a reasonable amount of time back to the kind of pre-covid rates of diagnosis.

Mathieu Chevrier from Citi. Just one on Kcentra, how large is the addressable market for Kcentra in trauma?

Sorry, it was a little hard to hear. In trauma?

Yes. How large is the addressable market compared to the existing addressable market?

Yes. I mean look, Kcentra delivered $700 million in revenue this past year. And it's well established. And look, there is some use out there off label in trauma. We see the general space others pursuing these indications. I don't think we're going to double the $700 million in revenue, but I think it's going to be a sizable several hundred million dollar opportunity for the brand in steady state. And it fits very importantly, with the patient blood management strategy that Herve spoke to this morning. And that's what we talked about, we need to pursue the clinical development to get the labels so that we're in a position to really promote and package these indications. So maybe we'll get even further lift by having the patient blood management approach.

And unfortunately, in the U.S., this thing called gun violence hasn't gotten less. And so there is a reality of a growing trauma and other type emergency room setting that I think drives an important potential use. I'd like to see it go the other way from a society viewpoint, but it's a reality, it's an unmet need in terms of what's going on, particularly in the U.S. market. So high single digits. And then let's see what the clinical results say and then that drives your next level of view in terms of what we could possibly do with the market. But it's there for the taking and we just need to have the indication for it.

And just another one on competition. What impact do you think it's going to have on pricing?

Look, anytime you have competitors in the market, there's a different dynamic. The key for us is driving reliable supply, which we've done for years and continue to do. And so I think it's really a matter of we'll respond. We do have a very good preferential spot in lots of doctors' minds and hearts and so that will continue to go. The competitor that's on has historically been challenged with supply, and that's where we'll continue to differentiate.