CSL Annual Report 2022

CSL Limited Annual Report 2021/22 4 1 Chair and CEO Message CEO Message Dear Shareholders, I am pleased to be addressing you after another year when CSL was able to deliver solid results, as promised, in an ongoing complex global environment. As I move around and connect with our people, patients and donors, I have been reminded repeatedly that when we trust in science and our purpose, the reward is repaid many times over, and allows us to continue delivering our promises to our stakeholders. Culture is Key Whilst science has firmly and rightly been in the spotlight through the pandemic, progress in this domain does not happen without talented people. As our people continue to connect both virtually and in person across plasma centres, our manufacturing sites, our research labs and our offices, there are many conversations within and between the diverse teams of people who make CSL so successful. The common thread I hear is that, although life has changed, our people stay motivated day-to-day through an overwhelming dedication to our purpose and our values. Together, these have driven a culture that is not easily replicable, and one that I truly believe is unique and enduring at CSL. The science and people of CSL save lives, and it is important to our leaders that employees feel motivated and proud to come to work, and that they have a promising future with us. This priority has been acknowledged this year with CSL honoured to be recognised as one of Australia and New Zealand’s best places to work by the Australian Financial Review. In March, Forbes magazine also named CSL among America’s Best Employers for 2022. It is encouraging to see that we are making progress and are receiving recognition for our efforts. Executing on Our 2030 Strategy CSL’s strategic framework guides us in how we make considered strategic decisions to evolve our organisation so that it remains effective, sustainable and efficient. Our priority areas are: people and culture, focus, innovation, efficiency and supply, sustainable growth and digital transformation. You can read more about these in detail on page 19 of this report, but I want to reiterate that we are executing to plan and I am pleased with the progress we’ve made so far, particularly in relation to setting emissions reduction targets. I would also like to elaborate on Dr McNamee’s comments regarding Vifor Pharma. In December, we were pleased to enter into an agreement to acquire Vifor Pharma, a global specialty pharmaceutical company with leadership in renal disease and iron deficiency. The acquisition fits strongly with our strategy. It adds a durable and growing business with leadership positions across nephrology, dialysis and iron deficiency, and will provide a platform to build a significant renal franchise. It also extends the reach of CSL’s high-value pipeline in the renal space by leveraging enhanced access to unique patient populations which will support clinical trial execution. The acquisition was funded through an institutional placement, a share purchase plan and a debt raising and I would like to thank all of our stakeholders for the overwhelming support they have shown for the transaction. Now, we look forward to the important work of integrating this business into the CSL family and driving the sustainable growth that this acquisition will add to the CSL business. Investment and Innovation In 2021/22, CSL increased its investment into research and development by 17% at constant currency. Enduring organisations have many high-value capital allocation options; initiatives to invest in that will help the organisation prosper into the future. Optionality is a good problem to have, and one that our leadership group debates regularly. While these can take years to realise, it is great to share the achievement when we do. One recent example was the completion of the US$156 million expansion of our CSL Seqirus manufacturing facility in Holly Springs, North Carolina in the US. This new fill and finish production line gives us the ability to streamline our production process more efficiently, which ultimately helps us to better meet the needs of our patients and, in turn, better meet the needs of public health. CSL Seqirus’ new A$800+ million cell culture vaccine production facility in Tullamarine is also making good progress and when finished (expected to be in 2026) will be the only one of its kind in the Southern Hemisphere. Our R&D pipeline is at the heart of future therapies and our investment in our R&D infrastructure is significant. Construction of our new R&D campus in Marburg, Germany, is nearly complete and this building will have capacity to house about 500 R&D employees, who will form strong, collaborative linkages with our other R&D campuses around the world. In Melbourne, Australia, our state-of-the-art global R&D campus and new corporate headquarters under construction in Parkville’s biomedical precinct are well advanced, with plans for completion in early 2023. We have also made good progress in our investment into our late-stage R&D pipeline. In May, we received notice that the US Food and Drug Administration had accepted our Biologics License Application, for priority review, for the promising gene therapy etranacogene dezaparvovec. In clinical trials, etranacogene dezaparvovec has been shown to significantly reduce the rate of annual bleeds in people with haemophilia B after a single, one-time infusion compared to when these people were receiving recombinant factor IX therapy alone. If approved, it would be the first ever gene therapy treatment option for the haemophilia B community. This is a great development, and we are excited about the prospect of launching new and innovative products over the coming years.