Material Risks (alphabetical order) Risk Description and Potential Impacts Managing the Risk 8. Product Development, Innovation and Competition • A n inability to respond effectively to or compete with rapid technological advancements, generics, biosimilars and emerging disruptive therapies may affect CSL’s ability to deliver on its innovation and growth strategies, potentially altering the demand for, and the economics and competitive positioning of, CSL’s plasma-derived and adjacent therapies, vaccines, iron replacement therapies and nephrology products including those used in dialysis care. • L oss of CSL’s competitive edge against other companies in the collection of plasma potentially affecting CSL’s ability to manufacture and sell our products. • T hese may affect the competitiveness and relevance of CSL’s capabilities across plasma protein, recombinant protein and vaccine technologies, impacting pipeline prioritisation, product differentiation and long-term value creation. • C SL remains committed to exploring new and emerging pathways to address the most pressing medical challenges. • C SL continues to invest in targeted and potentially disruptive R&D innovation to better meet the needs of patients and public health. • C SL strategically reviews its existing and future product pipeline against unmet need and market demand while continually evaluating the competitive landscape. • S cientific and therapeutic diversity remains central to CSL’s strategy. This includes robust lifecycle development and management of existing products, alongside the development of novel therapies across CSL’s therapeutic areas. • I n addition to proprietary research, CSL actively pursues strategic opportunities through licensing, acquisitions and partnerships to remain competitive and drive sustainable growth. • C SL also acknowledges the inherent risks in clinical development of new therapeutic and disease areas. These include higher initial failure rates and increased operational complexity arising from potential knowledge gaps in the scientific, medical or regulatory environment, and the uncertainty of therapeutic outcomes. • I n the highly competitive global influenza vaccine market, CSL remains focused on sustaining its leadership through ongoing innovation in vaccine development and manufacturing. • T he adoption of advanced and emerging technologies is critical to maintaining long-term competitive advantages and delivering on CSL’s promise to protect public health. • R &D portfolio risks are overseen by the IDC, while competition-related risks are overseen by the ARMC. More broadly, strategic risks are assessed in the development of CSL’s strategy. 9. Product Quality • A failure in the development, manufacture or supply of CSL’s products, arising from process deficiencies, inadequate controls, human error, or non-compliance with regulatory standards, that could result in products not meeting required quality, safety or efficacy standards. • S uch events may lead to product recalls or shortages, disruption to patient access, regulatory enforcement action, reputational damage and financial loss. • I n terms of meeting product quality requirements through CSL’s manufacturing and supply processes, CSL adopts and complies with a broad suite of internationally recognised standards through the CSL Quality Management System (QMS), including good manufacturing practice (GMP), and good distribution practice (GDP) that includes audits of third-party vendors and suppliers. • C SL is frequently inspected by independent regulatory authorities auditing compliance with these standards and CSL responds to any findings should they occur. • T he QMS includes a robust framework for managing quality at CSL through policies including production and process assurance, quality lab controls, issue analysis and management, facilities and equipment, and document, data and records management. There is regular tracking of KPIs, internal enterprise quality audits, and technology to track corrective and preventive actions (CAPAs) by each of CSL’s businesses. • Q uality risks are included in the enterprise risk management processes and overseen by the ARMC. Also refer to page 38 (Additional Material Topics) of this Annual Report. Material Risks 22 Performance
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