CSL Ltd Annual Report 2019

Seqirus Total revenue was US$1,196 million, up 12% at constant currency basis driven by increased sales of seasonal influenza vaccines and Seqirus’ adjuvanted influenza vaccine FLUAD ® . Seqirus’ portfolio of influenza vaccines has transitioned to higher valued products in recent years. The major drivers have been the shift to Quadrivalent influenza vaccines – Flucelvax ® and Afluria ® and a significant increase in demand for FLUAD ® , which is designed to offer increased protection for over 65 year olds. (c) Future Prospects (including Key Risks) In the medium term CSL expects to continue to grow through developing differentiated plasma-derived and recombinant products, expanding markets and indications for those products as well as seasonal and pandemic influenza vaccines through Seqirus, and the commercialisation of emerging technologies. Over the longer term CSL intends to develop new products which are protected by its own intellectual property and which are high margin human healthmedicines marketed and sold by CSL’s global operations. These strategies are underpinned by CSL’s research and development strategy that comprises five Therapeutic Areas: • Immunology & Neurology – support and enhance the current portfolio with improved patient convenience, yield improvements, expanded labels and new formulation science; • Haematology & Thrombosis – support and enhance the current portfolio with new plasma-derived products, recombinant coagulation factors and coagulation research; • Transplant – expand the use of speciality plasma-derived products and investigate novel technologies in the area of transplantation; • Respiratory – explore new opportunities for plasma-derived respiratory therapies and develop new therapies for significant unmet medical needs; and • Cardiovascular & Metabolic – explore new plasma-derived opportunities for treatment of acute coronary syndrome, as well as novel biotechnology therapies for treating diabetes. Additionally, Seqirus is innovating in manufacturing technologies, product development, and delivery methods of vaccines for the prevention of seasonal and pandemic influenza. Further information on CSL’s future prospects has been omitted as it could unreasonably prejudice the interests of CSL. In the course of CSL’s business operations, CSL is exposed to a variety of risks that are inherent to the pharmaceutical industry, and in particular the plasma therapies industry. The following details some of the key business risks that could affect CSL’s business and operations, but are not the only risks CSL faces. Key financial risks are set out in Note 11 to the Financial Statements. Other risks besides those detailed below or in the Financial Statements could also adversely affect CSL’s business and operations, and key business risks below should not be considered an exhaustive list of potential risks that may affect CSL. Additional information on CSL’s operations and performance can be found on CSL’s website, CSL.com. Description of Key Risk Key Risk Mitigation Research and Development/Commercialisation • CSL’s future success depends significantly on the ability to innovate and successfully develop new products. The success of such development efforts involves great challenge and uncertainty. To achieve this CSL must conduct, either at its own expense or with collaboration partners, early stage research and clinical trials to demonstrate proof of concept and the safety and efficacy of the product candidates. Clinical trials can takemultiple years to complete and are uncertain as to outcome. • Commercialisation requires effective transition of research and development activities to business operations. • CSL seeks to ensure that all of its research and development programs, including early stage research and clinical trials, are run responsibly, ethically and comply with local regulations. CSL’s programs operate within appropriate governance frameworks that take into account multiple decision points when identifying and assessing the science and commercialisation opportunities. • CSL undertakes extensive advance planning and transitioning work so that research and development activities and technologies are effectively transitioned to business operations. • CSL also actively sources partners/ subcontractors, where necessary, to support business continuity in product development or general operations. Patient Safety & Product Quality • As for all pharmaceutical products, the use of CSL’s products can produce undesirable or unintended side effects or adverse reactions (referred to cumulatively as “adverse events”). The occurrence of adverse events for a particular product or shipment may result in a loss, and could have a negative impact on patients, business and reputation, as well as operations. • CSL seeks to maintain processes and procedures that meet good pharmacovigilance practice standards. CSL seeks to ensure that product information is up to date and contains all relevant information to assist healthcare practitioners to appropriately prescribe CSL products. Talent and Culture • CSL is dependent on having the right people in the right position doing the right jobs, including executives and scientific teams. Providing a safe and rewarding work environment is critical to sustainability of talent. • CSL has in place a robust workplace health and safety management system in line with industry best practice. CSL seeks to ensure that its remuneration and retention arrangements are competitive in the employment markets in which it operates. CSL has plans and processes in place to develop future leaders, including succession planning and talent development. CSL Limited Annual Report 2019 52 Directors' Report