Annual Report 2023/24 Driven by Our Promise
CSL provides lifesaving products to patients in more than 100 countries and employs 32,000+ people. We are helping to shape a healthier world that enriches all our communities. Purpose The people and science of CSL save lives. CSL develops and delivers innovative medicines that help people with serious and life-threatening conditions live full lives, and protects the health of communities around the world. CSL Values guide the organisation in creating sustainable value for its stakeholders. Values CSL’s strong commitment to its values has guided us for many decades. Our Values are fundamental to our success – helping us to save lives, protect the health of people and earn our reputation as a trusted and reliable global leader. They are at the core of how our employees interact with each other, make decisions and solve problems. Patient Focus Make people and patients your passion Integrity Walk your talk Innovation Reach for the unreachable Superior Performance Make yourself proud Collaboration Adventure together Cover page image Logan C. Haemophilia B Patient Logan’s Story Logan is juggling the busy life of a college senior while managing his haemophilia B. Logan is an active presence on campus, working on dual degrees in Finance and Business Economics. As he prepares to finish his education and enter the business world, Logan is taking the same approach to life as he has with his rare disease by taking on the challenges in front of him. Logan C. Haemophila B Patient Limited Annual Report 2023/24
One CSL Message from the Chair 4 Message from the CEO 5 Performance CSL’s 2030 Strategy 8 CSL’s Sustainability Strategy 10 Value Creation 12 Material Risks 14 CSL’s Businesses and Outlook 16 Innovation Therapeutic Areas and Product Portfolio 20 Innovation 26 In this report 2024 13 August – Annual results and final dividend announcement 9 September – Shares trade ex‑dividend 10 September – Record date for final dividend 2 October – Final dividend paid 29 October – Annual General Meeting 31 December – Half Year ends 2025 11 February – Half Year results and interim dividend announcement 10 March – Shares trade ex‑dividend 11 March – Record date for interim dividend 9 April – Interim dividend paid 30 June – Full Year ends 19 August – Annual profit and final dividend announcement 9 September – Shares trade ex‑dividend 10 September – Record date for final dividend 3 October – Final dividend paid 28 October – Annual General Meeting 31 December – Half Year ends CSL Calender About this Report This Annual Report combines CSL’s financial and non-financial performance in one comprehensive report, linking our sustainability and strategic priorities to our business results. Unless otherwise stated, this report covers CSL’s controlled entities as disclosed within our consolidated entity disclosure statement included within our financial report. This 2024 Annual Report is a summary of CSL’s operations and activities for the 12-month period ended 30 June 2024 and financial position as at 30 June 2024. This report covers CSL’s global operations, including subsidiaries, unless otherwise noted. A reference to CSL, CSL Group, we, us and our and similar expressions refer collectively to CSL Limited and its related bodies corporate. Promising Futures Page 34 Annual General Meeting The 2024 Annual General Meeting (AGM) of CSL Limited (ABN 99 051 588 348) will be held on Tuesday, 29 October 2024 at 10 a.m. (Melbourne time) at RACV City Club, Level 17, 501 Bourke St, Melbourne 3000. Read more at investors.csl.com Healthier World Page 42 Governance Governance 56 Directors’ Report Remuneration Report 77 Financial Report Financial Report 106 Shareholder Information Shareholder Information 154 Distribution of Holdings 155 Glossary 159 Corporate Directory Back cover Operating and Financial Review 1
One CSL CSL is a global biotechnology company with a dynamic portfolio of lifesaving medicines, including those that treat haemophilia and immune deficiencies, vaccines to prevent influenza, and therapies in iron deficiency and nephrology. Since our start in 1916, we have been driven by our promise to save lives using the latest technologies. Today, CSL – including our three businesses, CSL Behring, CSL Seqirus and CSL Vifor – provides lifesaving products to patients in more than 100 countries and employs 32,000+ people. Employees North America 19,189 59% Europe, Middle East, Africa (EMEA) 8,075 25% Australia and New Zealand 3,107 9% United Kingdom 1,093 3% Asia 1,004 3% South America 230 1% Global presence CSL Behring & CSL R&D Australia China Germany Switzerland United States CSL Seqirus & CSL R&D United Kingdom United States CSL Vifor & CSL R&D Switzerland CSL Plasma China Germany Hungary Puerto Rico United States CSL Vifor Switzerland CSL Seqirus Australia United Kingdom CSL R&D Australia China Italy Japan Netherlands Spain United Kingdom United States Regional Sales and/or Distribution Head Office Melbourne, Australia US$2.64 dividend per share for 2024 100+ countries that CSL provides lifesaving products to patients US$5.8b in R&D investments in the last 5 years to advance CSL’s product pipeline 110 million influenza doses distributed in FY24 US$14.8b in annual revenue 349 plasma collection centres across China, Europe and North America 32,000+ globally 2 Limited Annual Report 2023/24
Businesses CSL Behring discovers, develops and delivers innovative therapies for people living with a range of rare and serious health conditions. CSL Seqirus is a major contributor to the prevention of influenza globally and a transcontinental partner in pandemic preparedness. CSL Vifor is a global partner of choice for pharmaceuticals and innovative, leading therapies in iron deficiency and nephrology. Find out more on page 16 Find out more on page 17 Find out more on page 18 Operating in 40+ countries around the world 3
Message from the Chair Dear Shareholders, I am pleased to share our results and operating review for the 2023/24 financial year. On behalf of your Board, I am once again proud to report that CSL has had a productive year where we have delivered for patients, communities and shareholders. In doing so, our people have demonstrated resilience and resolve in a complex operating environment. CSL is a truly global organisation. We help patients in over 100 countries around the world. External challenges will always be present, but we must concentrate on what we can control. Through our focus we have been able to deliver strong financial results this year. I extend my thanks to our Global Leadership Group, and all our colleagues throughout the world, for their commitment. Staying focused CSL has remained acutely focused on our strategy and the therapeutic areas that we target. This is where we can make the biggest difference. You can read about our strategy in this document, but to put it in my words, it is about tackling complex problems where we believe we have a distinct advantage and doing this at scale. Where possible, we innovate in these areas so we can better protect people and communities in the future. Our track record demonstrates that this has been a good formula for patients and shareholders alike. There remains strong unmet need in our areas of focus, and as long as this is the case, we see the opportunity for growth in your company. The best way to achieve these growth aspirations is through our strategy. While we may see some minor changes, your Board is confident that this is the right framework: we believe we have the right building blocks to deliver sustainable, profitable growth. Dr Brian McNamee AO Chair The Board also spent time in the United States this year meeting with important external partners and stakeholders, hearing from health experts including prescribers, payors and health economists as well as other investors in the biotech market. This provided Directors and the management team with invaluable insights into the global themes currently shaping CSL’s operating and strategic environment. We have also been listening to feedback from our investors. Remuneration has been a particularly important topic since our Annual Shareholder Meeting in October last year. Talent is a critical factor in driving company performance and remuneration is a key component of this. Your Board has discussed our remuneration framework extensively with our key stakeholders and has made several changes this year. Details of these can be found on page 77. We will continue to listen and respond to feedback in relation to our remuneration approach as well as any other issues important to our shareholders. Your Board is confident in the outlook for CSL’s ability to deliver sustainable, profitable growth for our shareholders. Once again, on behalf of the Board, I’d like to extend my thanks for your support. It has now been just over two years since we closed the acquisition of Vifor Pharma. We saw then, as we do now, a company with the right capabilities, competencies and adjacencies to CSL, that would contribute to our long‑term growth agenda. This view has not changed, but shareholders will be aware that the business has experienced several near-term challenges. We were prepared for some of these, but others were unexpected. This is disappointing, but I am confident that the leadership group have the right plans in place to deliver growth from CSL Vifor over the long-term. Governance update Dr Paul McKenzie and his leadership team are in charge of executing this strategy. The role of the Board is to maintain the highest standards of corporate governance as part of CSL’s commitment to maximise shareholder value. We were pleased to welcome Ms Samantha Lewis to our Board of Directors on 1 January 2024. Samantha is a diligent and experienced Board member. She currently holds two other Non-executive Director positions at leading Australian entities, including ASX-listed Nine Entertainment Co. Holdings, where she is Chair of the Audit and Risk Management Committee. She has also served as a Non-executive Director at Aurizon Holdings Limited and Orora Limited. Samantha’s responsibilities reflect her deep financial, audit and risk management knowledge. Engagement Another important responsibility of the Board is to engage with stakeholders inside and outside of CSL. This year, the Board held meetings in Australia, and the east and west coasts of the United States of America which gave us an opportunity to spend time on the ground at some of the operations that underpin your company’s success. We had valuable interactions with our site leaders, discussing the opportunities and challenges they face in their roles. The Board left with a strong sense of optimism, and we were encouraged by the efficiency and productivity measures being implemented by our people. 4 Limited Annual Report 2023/24
Message from the CEO Dear Shareholders, It gives me great pleasure to share our annual report for financial year 2024. This year, CSL reported strong financial results. This was driven by an exceptional performance across CSL Behring’s portfolio, especially immunoglobulins. The targeted plasma initiatives we have implemented are driving gross margin recovery. CSL Seqirus achieved solid growth in a challenging season, where its portfolio of differentiated products outperformed the broader market. For CSL Vifor, we are well prepared for the evolving iron market. Throughout this report, you will find detailed information regarding the financial and operating highlights of CSL throughout the financial year. I would like to add some of my own personal reflections. My Priorities During the year I reached the milestone of one year since I started as CSL’s Chief Executive Officer and Managing Director. While time has certainly flown by, every day I am reminded of the meaningful work our more than 32,000 passionate people do around the world. When I started, I set out five key priorities. I am pleased to report that we have made progress across all of these. The first two priorities concentrated on the financial performance of CSL. Top line growth across our core franchises was achieved in a difficult operating environment. Our immunoglobulin franchise grew strongly, at 21%. For CSL Seqirus, our adjuvanted FLUAD® product grew 16%. I also wanted us to concentrate on realising cost of goods sold efficiencies. Our CSL Behring gross margin recovery is underway, and there are several initiatives assisting in this goal that you can read about on page 16. We also see additional opportunities that include potential synergies with CSL Vifor, and a refreshed commercial operating model. Although these are financial metrics, they represent the hard work and ingenuity of a wide variety of our people across multiple functions. The continuous improvement mindset they have shown will continue to be a great benefit to our company. We aim to deliver sustainable, profitable growth over the long run, so the next two priorities focus on laying the foundations for the future of CSL. It is important that we maintain many options in our R&D pipeline and deliver results within our investment envelope. During the year, the first patients were dosed with HEMGENIX®, the groundbreaking gene therapy for haemophilia B patients that was developed in partnership with uniQure. It’s a treatment that was honoured with the distinguished Prix Galien award for Best Product for Rare/Orphan Diseases. Japan’s Ministry of Health, Labor and Welfare (MHLW) were also the first to approve KOSTAIVE®, the world’s first self‑amplifying mRNA (sa-mRNA) COVID-19 vaccine for initial vaccination and booster for adults 18 years and older. The sa-mRNA technology has the potential to create more potent cellular immune responses and increase duration of protection, whilst using considerably lower doses of mRNA. This approval marks an historic achievement as the first sa-mRNA vaccine to be registered in the world and represents a significant milestone for our partnership with Arcturus Therapeutics. We also filed for regulatory approvals in the US and EU for garadacimab, our homegrown monoclonal antibody aimed at helping people with hereditary angioedema. The future is digital, and we have been investing in new technologies to drive business performance. Our new facilities in Australia and Europe are equipped with state of the art, advanced manufacturing technology that will help support the future productivity of our sites. We are also using digital technology to customise our donor application to provide donors with a more personalised experience. My final priority is about the most important part of CSL: our people. That is to attract, engage, develop and retain next generation leaders. Promising Futures is how we articulate the purpose and possibility of our people at CSL. It describes an environment in which everyone can fulfill their potential while, at the same time, meeting the needs of the business. We are always aiming to do better in this space, and I encourage you to read more about this on page 34. On this topic, over the past year our Global Leadership Group (GLG) has been bolstered by several new appointments. I am pleased CSL can attract such strong talent to our team as we deliver on our 2030 Strategy. Joining us were, Kate Priestman as Chief Corporate & External Affairs Officer, Roanne Parry as Chief Human Resources Officer, and Dave Ross as Senior Vice President & General Manager, CSL Seqirus. Ken Lim also joined the GLG on a permanent basis as Executive Vice President and Chief Strategy Officer after leading the CSL Seqirus business on an interim basis. You can read more about the GLG, including their work history, on page 62. Dr Paul McKenzie Chief Executive Officer and Managing Director CSL Limited Staying true to our purpose While these developments have been extremely positive for your company, we operate in an industry characterised by uncertainty. Unfortunately, not all our targeted projects will pay off. In February, we announced the top-line results from the Phase III AEGIS-II Trial evaluating the efficacy and safety of CSL112. Unfortunately, the study did not meet its primary efficacy endpoint. I’d like to thank all the patients, families, caregivers, and investigators for their support and participation in the study. As a company, we learned a lot from this ambitious trial, and the outcome will not affect our resolve. As Brian has shared, focus has been a key to CSL’s success over the long run and it will continue to be a defining feature of our strategy. We know there’s always another life to save, another disease to treat, and another way to address the ever‑changing challenges facing healthcare around the world. Outlook Over the longer term, like Brian and the Board, I believe your company is in a good position to deliver value for shareholders. CSL possesses leading positions in growing global markets with strong unmet need. Our three business units – CSL Behring, CSL Seqirus and CSL Vifor – are underpinned by best-in-class, durable products, and an innovation pipeline focused on new therapies and new indications. Our embedded know‑how in scaled manufacturing platforms is driving efficiencies and improvements in yield. By serving significant unmet patient needs and adding value to healthcare systems, we continue to deliver sustainable and profitable growth, support innovation, and generate returns for our shareholders. I look forward to updating you on the progress we make, but in the meantime please take the time to digest the information presented in this report. As ever, thank you for your support of CSL. 5
Financial Operational Delivering a step change in commercial execution with growth across the portfolio. Supporting growth in operating profit and earnings per share (EPS). • A strong year with NPATA attributable to equity holders of US$2.91 billion for the year ended 30 June 2024, up 11% on a reported currency basis when compared to the prior comparable period. • Strong growth in Immunoglobulins portfolio, up 20% at constant currency. • CSL Seqirus revenue up 4% at constant currency driven by strong growth in FLUAD®. • CSL Vifor well positioned for an evolving iron market. • Record levels of plasma collections. • 110 million influenza vaccine doses distributed by CSL Seqirus. • Base fractionation capacity completed at Broadmeadows and Marburg. • Participated in 479 regulatory inspections of our manufacturing facilities and plasma collection centres. • Vifor cost synergies delivered ahead of expectation. • Rika rollout in 84 centers as at 30 June 2024, and on track for completion by the end of FY2025. I-Nomogram gained FDA clearance with clinical trials showing an average 10% increase in the volume of plasma collected per donation with an average collection time of less than 35 minutes. Continuing to support life and data scientists with automation, artificial intelligence and stronger data and analystics programs. Performance US$14.8b Group revenue US$2.91b NPATA attributable to equity holders US$2.64 Total ordinary dividends 3.8m CSL Plasma app downloads to date 84 Centres Rika Plasma Donation System™ Rollout 2024 2023 13.3 2024 2023 2.36 27% on 2023 2024 2023 3m NPATA 11% on 2023 at reported currency 2024 2023 2.61 6 Limited Annual Report 2023/24
Progress made with mRNA vaccine technology marking an historic achievement and a significant milestone for our partnership with Arcturus Therapeutics, Japan’s MHLW approved KOSTAIVE®, the world’s first sa-mRNA COVID-19 vaccine for initial vaccination and booster for adults 18 years and older. Strengthening existing partnerships including joining Brandon Capitol’s new BioCatalyst Fund 6, extending the partnership with BaseLaunch and joining Biopôle SA’s R&D campus in Lausanne. Sustainability Focused on innovative products, innovative manufacturing processes and protecting the health of patients and the general public. • Set new initial goals in support of performance across CSL’s sustainability focus areas that seek to enable a healthier world, also embedding health equity and empowerment and inclusion and belonging as part of CSL’s strategic focus areas. • Ranked among the best large employers in America by Forbes magazine and named to Forbes Global 2000; also among Work180 Top Workplaces for Women in Australia and Prosple Top 100 Graduate Employers in Australia. • Continue to advance best-in-class plasma donor experience with the rollout of the Rika Plasma Donation System™, Project REACH and individualised nomograms. Research and development Evolving our sustainability strategy, creating a foundation for success and shared value creation through 2030 and beyond. • To ensure a robust and diverse innovation pipeline based on a foundation of scientific excellence, CSL continues to strengthen its therapeutic area focus underpinned with robust technical development platforms. • HEMGENIX®, the first FDA-approved gene therapy for adults with haemophilia B, won Best Product for Rare/ Orphan Diseases at the 2023 Prix Galien USA Award. 87 product registrations or new indications in 28 countries 74.8% Employee engagement index 2024 13 clinical trial results were published on an ICMJE‑recognised public clinical trial registry US$15.7m in product access support 7clinical trials had a first patient enrolled during the year 90% Donors willing to refer a friend 56% women at the Board level 12% on 2023 2024 2023 44% 59% women across CSL Equal to 2023 2024 2023 59% 7
Read more at csl.com/we‑are‑csl/corporate‑governance/ code‑of‑responsible‑business‑practice CSL operates with a long‑term mindset. Over time, we have served patients with life-saving therapies and effective vaccines. We have achieved consistent top-line growth and strong margins, which helps fuel further growth by allowing us to re-invest in our own businesses. CSL is committed to the 2030 Strategy which includes Focus in core therapeutic areas, Innovation, Efficiency & Reliable Supply, Sustainable Growth, and Digital Transformation, with CSL people and our patients at the centre. We believe this is the best path, given our capabilities in an increasingly challenging and competitive world. The core elements of the 2030 Strategy are shown to the right. CSL’s 2030 Strategy CODE OF RESPONSIBLE BUSINESS PRACTICE CSL People & Culture Patients & Public Health INNOVATION EFFICIENCY & RELIABLE SUPPLY SUSTAINABLE GROWTH DIGITAL TRANSFORMATION FOCUS VALUES 8 Limited Annual Report 2023/24
Our approach Strategic Pillar Focus • Immunology • Haematology • Nephrology and transplant • Respiratory • Cardiovascular and metabolic • Vaccines • Delivering groundbreaking innovation in areas of unmet need in CSL’s Therapeutic Areas (which you can read more about on page 20) • Driven to meet the needs of patients by leveraging our scientific and clinical expertise to provide the best possible therapies and vaccines Innovation • Products • Delivery • Services • Technology • Yield • Disrupting with cutting edge innovation and a portfolio of products to enhance patient care and public health (for more, see the Innovation section) • Committed to finding innovative approaches to increase yield across core platforms Efficiency & reliable supply • Technology • Operational excellence • Capital project execution • Partnerships • Driving efficiency across the supply chain, from collections through manufacturing and to patients • Striving to maximise value and deliver milestones with key alliances and partnerships Sustainable growth • Plasma protein technology • Recombinant protein technology • Cell & gene therapy • Vaccines technology • Iron therapy • Growing the value of key franchises in plasma, vaccines and iron in a sustainable way by driving market access, using real world evidence and medical capabilities • Continuing to launch key products and indications for CSL’s next phase of growth Digital transformation • Enterprise Value • Worker Productivity • Information Velocity • Building and leveraging data and partnerships to embrace digital transformation across its business • Prioritise opportunities to use AI that drive business value while scaling user‑friendly tools for broad productivity 9
CSL’s Sustainability Strategy Since first announcing its sustainability strategy in 2021, CSL continues to evolve its approach. The Company’s sustainability efforts aim to complement and support achievement of CSL’s long-term strategy, establishing a foundation for shared value creation and enduring success through 2030 and beyond. Driven by its vision for a healthier world, CSL has identified focus areas where it can have the most positive impact. These focus areas include existing emissions and environmental targets as well as new initial goals for other focus areas that seek to enable healthier communities and environments. The focus areas are guided by CSL’s material sustainability topics*, which inform continuous improvement across its operations and transparency in areas that matter most to CSL’s key stakeholders. In 2024, CSL concluded its sixth materiality assessment and followed the GRI 3: Material Topics 2021 (GRI 3) standard developed by the Global Reporting Initiative by understanding organisational context, identifying actual and potential negative and positive impacts, assessing the significance of impacts and prioritising the most material impacts for reporting. You can find more on the materiality assessment process on CSL.com. Embed an inclusive culture where all backgrounds and perspectives belong, develop, and thrive Everyone deserves the opportunity to achieve and maintain their highest level of health and well-being See Heathier World section, page 42, for more CSL’s Sustainability Vision CSL is committed to a healthier world. Its vision is a sustainable future for its employees, communities, patients and donors, inspired by innovative science and a values-driven culture HEALTHIER ENVIRONMENT HEALTHIER COMMUNITIES INCLUSION & BELONGING HEALTH EQUITY & EMPOWERMENT Strategic Focus Strategic Focus Donor experience Patient experience Access and affordability Talent and culture Supplier Energy Water Waste * Limited assurance by Deloitte. 10 Limited Annual Report 2023/24
Material topics* Focus Areas See pages 50 to 55 for more Donor experience – create best-in‑class donor experience in partnership with donors and communities Patient experience – elevate patient experience in drug development by embedding patient insights and lived experience Access and affordability – advance equitable access to medicines and vaccines Talent and culture – attract, develop, engage and retain top talent with diversity of identities, cultures, backgrounds, skills and lived experiences Supplier – partner with suppliers/third parties who share CSL’s commitment to social and environmental responsibility Energy – undertake initiatives that reduce emissions internally and across its supply chain Waste – divert waste from landfill through reducing, reusing, recycling and composting Water – identify, prioritise and implement water reduction initiatives • Product innovation and research • Clinical trial practices • Employee development and retention • Employee health, safety and wellbeing • Affordability and access to health • Product quality and safety • Plasma donations • Environmental management • Climate and carbon, and energy efficiency • Ecosystems and biodiversity • Circularity, waste and resource management See pages 20 to 32 for more See pages 34 to 41 for more See pages 42 to 48 for more Detailed throughout this report are existing targets, such as CSL’s emissions reduction targets, and new initial goals in support of performance across the focus areas detailed above. These include new goals for donor experience, patient experience and access and affordability, to name a few. Find out more in the Healthier World section, from page 42. HEALTHIER COMMUNITIES HEALTHIER ENVIRONMENT Sustainability governance • Business ethics, integrity and compliance • Data protection and cybersecurity See pages 64 to 66 for more * Limited assurance by Deloitte. 11
Key value drivers CSL’s value creation cycle CSL’s people More than 32,000 people with diverse skills that drive the Company’s purpose and values Solutions for unmet needs Opportunities to improve and protect the quality of life of patients and communities in CSL’s therapeutic areas Business partners Accessing and sharing intellectual know-how to develop and innovate CSL products Natural resources Plasma donations for rare and serious diseases; influenza virus strains for vaccine manufacture; iron sources (including synthetic) for iron-based products; and environmental inputs such as water and energy Read more at csl.com/we‑are‑csl/corporategovernance/code‑of‑responsible‑business‑practice Read more at investors.csl.com/ investors/our-corporate-profile Value Creation Financial resources Cash, equity and debt for future growth Physical assets Plasma donation centres to collect vital raw material, manufacturing facilities for CSL products, warehouses, research and development facilities and offices for CSL’s people Early stage research & collaboration Product development & clinical trials Manufacturing & distribution Sales, marketing, policy advocacy & patient support Sourcing (including plasma collection) Pharmacovigilance OUR PURPOSE AND VALUES OUR STRATEGIC PILLARS CODE OF RESPONSIBLE BUSINESS PRACTICE OUR EXPERTISE AND OPERATIONS EFFICIENCY & RELIABLE SUPPLY DIGITAL TRANSFORMATION SUSTAINABLE GROWTH FOCUS INNOVATION 12 Limited Annual Report 2023/24
The value we create Powered by research and development to identify new indications for CSL’s existing products, and innovative new products for patients and public health Collaborative partnerships to extend CSL’s limits Provide a safe, rewarding and productive workplace for promising futures Sustainable financial growth with a focus on revenue and margins Empowering CSL’s people through rewarding jobs, career development opportunities and professional training See Promising futures page 34 for more Enhanced scientific knowledge and skills through strong collaborations, leading partnerships and high standards of integrity in performing clinical trials See Innovation page 26 for more Protecting global health and the wellbeing of individuals, families, businesses and communities from life‑threatening and/or complications resulting from influenza. Saving and/or improving the quality of life of hundreds and thousands of people with rare and serious diseases. See Healthier World page 42 for more Delivering consistent, profitable and responsible growth for CSL’s investors, which fuels innovation and economic prosperity for multiple stakeholders Read more at CSL.com/we‑are‑csl/our‑businesses‑and‑products Responsibly source materials and inputs embedding environmental and social considerations into work practices CSL works with partners allowing the Company to leverage capabilities throughout the value chain and optimise costs. It also creates economic opportunities for CSL’s supply partners and the communities they operate in What we do Driven by safety, quality, reliability, and innovation in our operations CSL’s facilities are critical for the development and manufacture of its life-saving and life protecting products, while providing a safe and productive workplace CSL’s people Solutions for unmet needs Business partners Natural resources Financial resources Physical assets 13
Material Risks CSL operates in a fast paced and constantly evolving environment of science, technology and healthcare. Although there are many risks inherent in operating in these environments and industries, for example research and development, intellectual property and clinical trial risks, CSL regularly reviews its group risk profile to identify and assess material business risks. This includes external and emerging risks that could affect CSL’s global operations. CSL is also exposed more broadly to external risks such as the escalating trend of cyber threats and data privacy breaches. Managing risks includes both the mitigation of disruptive risks and the preparation for seizing opportunities. CSL’s Global Enterprise Risk Management Framework is designed to provide robust risk oversight that is fit-for-purpose for both the operation of CSL’s business and to support CSL’s strategy and deliver on CSL’s commitments to patients and public health. As part of CSL’s enterprise risk management process, the Board and management team have identified the key risks that are material to CSL. These material group risks are described below along with an explanation of CSL’s approach to managing them in the context of delivering on CSL’s 2030 Strategy. Key financial risks are set out in Note 10 (Financial Risk Management) to the Financial Statements. There are other risks that are inherent in the vaccine, plasma and recombinant proteins therapies and pharmaceutical industries, including iron deficiency, besides those detailed below or in the Financial Statements, that could also adversely affect CSL’s business and operations. These risks are not covered in this report as they are not considered material to CSL’s overall operations and financial position. Patient safety and product quality Patient safety is paramount for CSL’s ongoing sustainability as a global biotechnology leader and CSL’s long‑term strategy of efficiency and reliable supply. When CSL talks about patient safety, CSL means both in the use and administration of registered products as well as in the conduct of CSL clinical trials. Occasionally, patients and trial participants may sometimes experience adverse reactions to therapies, CSL’s manufacturing, product quality assurance and pharmacovigilance practices serve to provide high standards of safety and preserve CSL’s reputational integrity. CSL’s processes and procedures adhere to global good pharmacovigilance practice (GPV) and good clinical practice (GCP) standards to ensure that product information is up-to-date and contains all relevant information to assist healthcare practitioners to appropriately prescribe CSL products. For clinical trials, CSL prioritises informing participants about their disease (if applicable) and the investigational therapy involved in the trial before obtaining consent. Participants are informed about and acknowledge awareness of the potential benefits and risks of participation in the trial through use of Informed Consent Forms approved by relevant regulators, institutional review boards and independent ethics committees. Comprehensive qualitative and quantitative safety signal detection activities are performed throughout the development programs and the lifecycles of CSL’s marketed products. In terms of meeting product quality requirements through CSL’s manufacturing and supply, CSL adopts and complies with a broad suite of internationally recognised standards through the CSL Quality Management System, including good manufacturing practice, and good distribution practice (GDP) that includes audits of third-party vendors and suppliers. CSL is frequently inspected by independent regulatory authorities auditing compliance with these standards. Product innovation and competition CSL recognises that an impediment to delivering on CSL’s innovation and sustainable growth strategies is the changing competitive landscape for new technologies and disruptive therapies, such as gene and cell therapies. This material risk may alter the economics and characteristics of, and the demand for, CSL’s plasma and adjacent therapies, and may also affect the platforms and capabilities in plasma protein technology, recombinant protein technology, cell and gene therapy and vaccines technology. CSL continues to seek out new and unexplored avenues to tackle the most pressing medical challenges and remains committed to investing in targeted and disruptive R&D innovation to better meet the needs of patients and public health. CSL strategically reviews its existing and future product pipeline against unmet need and market demand and continually evaluates the competitive landscape. A key part of CSL’s strategy includes thoughtful diversity through multiple therapeutic areas and scientific platforms. CSL incorporates product lifecycle development and management, as well as development of new therapies, in strategies for each therapeutic area. In addition to proprietary research, CSL’s competitive approach includes licensing, acquiring or partnering with third parties to remain competitive and advance growth within CSL’s chosen therapeutic areas. In addition, clinical studies in new therapeutic and disease areas carry an inherent higher initial risk of failure as well as operational and technical challenges, due to the potential for knowledge gaps in the relevant medical, scientific and regulatory environment and the uncertainty of therapeutic outcomes. With respect to continued growth and innovation in the competitive global influenza vaccine market, CSL recognises the need to continue leading in the development and manufacture of influenza vaccines including cellculture technology and investigating the use of sa-mRNA technology for the development of both influenza and COVID-19 vaccines. Embracing innovative technology is important in this product sector, unlocking competitive advantages for success. 14 Limited Annual Report 2023/24
Supply, capacity and operations Having a sustainable and reliable supply chain is critical to the success of CSL’s 2030 Strategy, particularly to achieving consistent, economical and efficient supply. Any disruption to supply has the potential to impact our operations. CSL constantly monitors the demand for its products over a 10-year horizon as well as its capacity to acquire raw materials essential to the manufacture of CSL products. Delivering a positive donor experience is important to maintain and grow our collection of plasma. In the plasma collection centres, CSL uses modern techniques and technologies to facilitate a safe and efficient donation process. It consistently updates its plasma collection centres to provide a comfortable and safe donor experience. External sources of plasma may be used as needed to supplement collections to meet demand. CSL endeavours to invest in manufacturing capacity ahead of projected demand to ensure that it can supply the needs of patients. Its operations also accommodate investments in technology and process improvements to enhance efficiency and reduce costs. Such improvements encompass strategies to increase the yield of both immunoglobulin and cell-based influenza vaccines, along with boosting the throughput of its existing facilities. CSL’s global network strategy continually evaluates short-, mid-, and long‑term needs to inform decisions on capital and operational expenditures, including the use of expert third party providers to ensure a resilient, reliable and sustainable supply chain. CSL examines and prioritises its operational effectiveness efforts, capital plans, inventory targets, supply chain visibility, distribution and regulatory strategies to enhance the positions of its products from a business continuity and supply chain resilience standpoint. Market access In most countries, pricing and access are determined by the country’s P&R (pricing & reimbursement) authorities, based on clinical and economic evidence as well as patient outcomes, using strict appraisal processes. Policy making may involve multi‑stakeholder engagement, which includes governments, payers/insurers, patient advocacy groups, medical societies and non‑governmental organisations. CSL recognises that if it is not successful in maintaining an economic and reliable supply of its therapies for its stakeholders, or does not adopt responsible pricing, it may adversely affect its ability to execute its strategy, deliver sustainable growth and uphold CSL’s corporate reputation. CSL further recognises that as a result of macroeconomic pressures and other factors, governments and payers around the world are putting more emphasis on affordable pricing and equitable patient access. The Company works closely with stakeholders in all countries where it markets its products to ensure both that CSL therapies are accessible, and that its pricing remains competitive, responsible and reflects the value its therapies bring to patients and health systems. People and culture CSL’s commitment to supporting its people and strengthening its inclusive, purpose-driven culture are integral to meeting and exceeding the expectations of those it serves, its stakeholders and the communities in which the Company lives and works. It has a variety of programs and policies in place, including the Speak Up Policy and the Code of Responsible Business Practice (CRBP), to ensure that CSL Values guide how the Company’s people interact with each other and how CSL operates around the world. Acting with integrity, CSL builds trust, which protects and promotes CSL’s reputation. It also recognises the need to have the right people with the right skills in the right roles. An inability to attract and hire the right talent may slow progress towards the 2030 strategy. As it focuses on attracting, developing and retaining top talent, CSL regularly reviews best practices, and benchmarks itself within the markets in which it operates with the goal of offering total rewards and an employee experience that are both compelling and competitive with industry peers. In addition, CSL understands that the workplace and its employees’ needs are constantly evolving, and the Company offers flexible work options and opportunities for them to stay connected regardless of location. CSL constantly challenges itself to create an engaging and collaborative environment in which its people can continuously learn and grow professionally, deliver meaningful work and drive innovation. Privacy and cybersecurity The privacy and security of our data, including that of CSL’s patients, donors and employees, is of critical importance to CSL. The Company recognises the escalating risk of cyber threats and data privacy breaches targeting individuals and organisations. These cyberattacks constantly evolve, ranging from sophisticated phishing scams to attacks on critical infrastructure. Additionally, breaches of CSL information technology (IT) security and unauthorised or inadvertent release of information, caused by human error, malware or espionage, may compromise the privacy and security of the data the Company holds. To address these challenges, CSL maintains a proactive stance by continuously monitoring and assessing cybersecurity threats. CSL has designed and implemented security controls for its IT systems, infrastructure and data, based on its understanding of the known threats and industry best practice. CSL understands that being aware and prepared is key when responding to cyberattacks and safeguarding data privacy. CSL supports its employees to mitigate cyber and privacy risks, by providing ongoing education and training (including crisis response simulations and business continuity exercises). Further details about CSL’s enterprise risk management framework and how it manages its business risks is provided in CSL’s 2024 Corporate Governance Statement available on CSL.com (We Are CSL > Corporate Governance). Read more at csl.com/we-are-csl/ corporate-governance 15
CSL’s Businesses and Outlook You can read more about these technologies in the Innovation section of this report. Over the medium term, CSL Behring is committed to returning gross margin to pre-COVID levels. In addition to the initiatives to reduce the cost per litre of plasma outlined above, Ig yield improvements are critical to this. Increasing the amount of Ig extracted from every litre of plasma will always be an area of high focus for CSL. Over the next three to five years, the aim is to increase Ig yields by using data analytics, smarter plasma allocation, and through the implementation of a program of operational excellence. Over the longer term, CSL has a positive outlook for the demand for its products. Overall, the global Ig market is expected to grow over the next five years with continued supply, and with improved diagnosis rates in primary immunodeficiency (PID) post‑COVID. Within this growing Ig market, both PRIVIGEN® (an intravenous infusion Ig therapy) and HIZENTRA® (a subcutaneous Ig infusion therapy) are expected to gain market share over this timeframe. CSL is proud of CSL Behring’s Ig leadership position, and is poised to expand it. It is expected that the global Haemophilia B market will grow over the coming five years due to the steady prevalence of the disease and the launch of novel treatments, including gene therapies. Within this growing market, the CSL Behring portfolio is poised to grow its share of revenue. The Hereditary Angioedema (HAE) market is also expected to grow over the coming five years due to improved diagnosis rates and new prophylaxis therapies. Regulatory filing for garadacimab, CSL’s next generation HAE therapy, has now been accepted for review by the FDA and EMA, and it is anticipated that this product will come to market in FY25. The outlook for CSL Behring is positive, however competitive pressures across some indications have increased recently. Based on expected market dynamics, the depth of CSL’s portfolio, strong leadership and continued innovation across rare and serious diseases, the outlook for CSL Behring is strong and well-positioned to deliver sustainable, profitable growth. Read more at investors.csl.com CSL Behring’s operating units cover the journey from donor to patient. The focus of plasma collection is threefold; growing plasma volume while concurrently reducing the unit acquisition cost and enhancing the donor experience. Its manufacturing capability is focused on fractionating the plasma collected, improving Ig and albumin yield and transforming it into CSL’s portfolio of innovative medicines, as well as delivering supply of our recombinant medicines. CSL Behring’s commercial teams around the world are engaged with healthcare providers, payors and key stakeholders working to meet patient needs, and to deliver successful launches of CSL’s life-saving therapies, providing access to more people with rare and serious diseases. In the short term, one of CSL Plasma’s key priorities is sourcing a sufficient and sustainable volume of plasma to meet the growing need for CSL’s medicines. Plasma-derived therapies have a nine-to-12-month manufacturing cycle, so increasing collections in a sustainable way today is critical to CSL’s ability to increase the supply of therapies to patients in the future. Currently CSL Plasma teams are focused on reducing the overall cost per litre of plasma by optimising donor experience, improving centre productivity and innovation, including through the rollout program for the RIKA plasmapheresis technology and individual nomograms. 16 Limited Annual Report 2023/24
4. Continue to invest in manufacturing capabilities, platforms, and partnerships to keep pace with the growing demand for cell-based vaccines, support the launches of sa‑mRNA vaccines, and to ensure CSL meets and exceeds the needs of the healthcare providers it serves. Over the short-term two current trends will likely continue to evolve. First, the exciting acceleration of new vaccine technologies will likely continue. CSL Seqirus is well positioned with its technology platforms (cell, adjuvants, and sa-mRNA) and our R&D pipeline. CSL has also observed reduced rates of immunisation following the pandemic. Against this backdrop, CSL expects its differentiated vaccine portfolio to deliver ongoing value to public health systems. Seasonal influenza remains one of the most consequential vaccine preventable diseases due to its significant morbidity and mortality, with unmet need across all populations, and with particular risk to the very young, as a result of immature immune systems, and in older adults where immune systems start to wane over time. CSL Seqirus’ recent growth has been underpinned by our differentiated products – FLUAD® and FLUCELVAX® – which have been designed to help address these unmet needs. CSL expects to continue this growth over the medium-term, fueled by an ever‑growing body of real‑world evidence that demonstrates the benefits of CSL Seqirus’ Influenza vaccine portfolio. CSL is also planning to extend the indication of FLUAD® to populations 50 years+ and FLUCELVAX® to 6 months+ in a number of key markets to ensure the broadest possible access to these differentiated vaccines. Additionally, CSL is advancing key development programs, including aTIVc and sa-mRNA with the goal of leading important innovation to further address the unmet need within the influenza vaccine space. CSL is also keen to bring the anticipated benefits of sa-mRNA COVID vaccine to market. CSL Seqirus’ current efforts are focused on finalising clinical work and regulatory submissions in major markets around the world, enabling commercial launches over the next one to three years. Over the longer time frame, CSL’s strategy of differentiation and continuous innovation aims to protect ever-growing communities around the world and clearly establish CSL’s leadership within the markets it serves. Read more at investors.csl.com The CSL Seqirus strategy focuses on four key pillars: 1. Continue to grow the influenza franchise, further evolving our portfolio to innovative differentiated products that address unmet public health needs. 2. Continue to build on pandemic and pre-pandemic influenza leadership. Pandemic preparedness is a critical public health imperative and an important part of the CSL Seqirus business as it leverages core capabilities and unique partnerships with governments and other key stakeholders. Today, CSL has more than 30 agreements with Governments around the world where it is uniquely positioned to respond in the event of an influenza pandemic. With CSL Seqirus’ ongoing investments to continually enhance manufacturing capabilities and network, development of CSL Seqirus’ sa-mRNA platform, and the strong collaborations with governmental partners, CSL Seqirus is well positioned to respond to the public health need in the event of a pandemic. 3. Broaden global portfolio beyond influenza. CSL is excited about its self-amplifying mRNA technology which it believes will allow us to develop the next generation COVID-19 vaccine. 17
Over the last two decades, the principle of PBM has been formulated, recognising that retaining a patient’s own blood within their circulatory system is the most advantageous for their health. Despite advancements in medical science, the issue persists: there is an excessive dependence on blood transfusions despite their known risks. This overreliance leads to avoidable adverse outcomes, depletion of limited blood resources, and inefficient use of healthcare funds. CSL Vifor views a solution to this in PBM: an evidence‑based approach to improve outcomes by preserving patient’s own blood. Due to the well-established benefits of PBM, there is positive momentum behind its implementation, supported by the World Health Organization, EU commission and national guidelines. The stage is set therefore for broadscale PBM adoption. CSL Vifor is uniquely positioned in PBM to translate evidence-based medicine into evidence-based practice. The portfolio addresses ID (iron deficiency)/IDA (iron deficiency anemia) management pre and post operation to reduce blood transfusions and improve surgical patient outcomes. The CSL Behring portfolio addresses minimising blood loss through optimising hemostasis and attacking coagulation deficiencies, therefore reducing surgical blood use. Read more at investors.csl.com By bringing together this expertise and these products from CSL Vifor and CSL Behring, CSL is positioned to become the foremost and reliable partner in “blood health”, significantly enhancing patient care. Over the longer term, CSL is aiming to strengthen our renal disease position to offer medicines to patients at all stages of chronic kidney disease (CKD). Our ambition is to further expand the portfolio from dialysis to prevention of kidney damage, treatment of CKD complications and transplant. The market reveals a significant unmet need. The conditions targeted by CSL Vifor are inadequately served and represent a compelling opportunity for growth. It is estimated that the renal disease market will grow at a steady pace. This growth will be driven by an aging population and increased prevalence of CKD risk factors such as diabetes and heart disease. CSL aims to satisfy this unmet need by further expanding the portfolio from dialysis to prevention of kidney damage, treatment of CKD complications and transplant. CSL’s Businesses and Outlook CSL Vifor’s commercial portfolio addresses significant unmet need in patient journeys in iron deficiency and nephrology. Over the short term, CSL has prepared for challenges, however its growth ambitions are supported by multiple strategic and operational initiatives. These include geographic expansion, new indications, enhanced tender capabilities, investing in real-world evidence, life cycle management and driving additional value for the CSL Vifor and CSL Behring offerings from Patient Blood Management (PBM). CSL Vifor is well positioned for the evolving iron market. The clear ambition is to retain a leadership position in iron despite the competitive generic environment, including the loss of exclusivity (LoE) of CSL Vifor’s flagship product FERINJECT® in some markets. To date, global iron volumes have remained robust in Europe. This marks an important moment for the business, but it is well prepared and strategically positioned to meet the challenge. The fact remains that the intravenous (IV) iron market is largely untapped, with 85% of eligible patients not receiving IV iron treatment. The market is therefore expected to continue to grow in volume, in line with historical trends, presenting opportunities for CSL Vifor to drive long‑term, sustainable growth. 18 Limited Annual Report 2023/24
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