CSL Limited (CSL:ASX), a leading biotechnology company, reported strong financial results for the first half of fiscal year 2024, with a notable increase in revenue and net profit. Dr. Paul McKenzie, CEO of CSL, highlighted the company's growth, particularly in its CSL Behring division, and addressed challenges within CSL Vifor. The company saw an 11% increase in revenue at constant currency to $8.1B and a 20% rise in net profit after tax to $1.9B. CSL Behring experienced exceptional growth, with its immunoglobulin franchise performing notably well. The company also discussed the expansion of plasma collections and the successful introduction of the Rika plasmapheresis platform. Despite facing market challenges and the loss of exclusivity in Europe, CSL Vifor still generated over $1B in revenue. Seqirus, CSL's influenza vaccine division, reported solid sales growth and outperformed the market.
Key Takeaways
- CSL reported a revenue increase of 11% to $8.1B and a net profit after tax increase of 20% to $1.9B in the first half of FY2024.
- CSL Behring's immunoglobulin franchise and the Rika plasmapheresis platform contributed to significant growth.
- CSL Vifor faced challenges in the iron market and exclusivity loss in Europe but still generated over $1B in revenue.
- Seqirus achieved strong sales growth and received several vaccine approvals and recommendations.
- The company is confident in its guidance for the second half of FY2024 and expects all business units to contribute to double-digit earnings growth over the medium term.
Company Outlook
- CSL expects revenue growth of approximately 9% to 11% for FY2024, with NPATA in the range of $2.9B to $3B.
- CSL Behring aims to recover to pre-COVID margins in the next 3 to 5 years, with a current gross margin improvement to 50%.
- CSL Vifor anticipates limited growth in the near term but maintains confidence in its strategic vision.
- Seqirus will continue its product differentiation strategy but expects to be loss-making in the second half due to seasonality.
Bearish Highlights
- The AEGIS-II trial for CSL112 did not meet its primary endpoint, leading to further analyses and discussions with health authorities.
- CSL Vifor is facing market challenges and limited growth in the near term.
- Seqirus is expected to be loss-making in the second half of the year due to strong seasonality.
Bullish Highlights
- CSL Behring's immunoglobulin franchise saw exceptional growth.
- Plasma collection expansion and the Rika plasmapheresis platform introduction have been successful.
- Seqirus delivered solid sales growth, outperforming the market.
Misses
- CSL Vifor's challenges in the iron market and exclusivity loss in Europe.
- The AEGIS-II trial for CSL112 did not meet the primary endpoint.
Q&A Highlights
- CSL does not anticipate significant changes in compensation for plasma donors with the Rika platform.
- The company is aligned with Terumo on the Rika plasma collection system completion timeframe in the U.S.
- CSL is prepared for potential competition in the IV iron market in Europe and expects no generic competition for Injectafer in the U.S. until mid-2026.
- The company plans to transition from quadrivalent to trivalent flu vaccines in the U.S. starting in 2024 without impacting pricing.
- CSL has achieved $75M in run-rate synergies from the Vifor acquisition and is focused on margin recovery and steady-state growth post-COVID.
CSL Limited's earnings call revealed a strong financial performance in the first half of FY2024, with a positive outlook for the future despite some challenges. The company remains focused on growth, innovation, and strategic initiatives to maintain its position as a leader in the biotechnology industry.
InvestingPro Insights
CSL Limited's (CSLLY (OTC:CSLLY)) recent financial performance reflects a company on the move, with the latest data from InvestingPro underscoring its market position and valuation. The company's market capitalization stands at a robust $91.4 billion, indicative of its significant presence in the biotechnology sector. This is complemented by a Price/Earnings (P/E) ratio of 37.24, which, while high, may reflect investor confidence in CSL's growth prospects and its prominence as a key player in the industry, as noted in one of the InvestingPro Tips.
InvestingPro Data also shows a strong revenue growth of 21.14% over the last twelve months as of Q2 2024, signaling the company's ability to increase sales and expand its market share. The gross profit margin remains impressive at 51.63%, showcasing CSL's ability to maintain profitability despite market challenges. Additionally, CSL has demonstrated a strong return over the last three months, with a price total return of 17.45%, suggesting that the company's stock performance has been favorable in the short term.
Investors looking to delve deeper into CSL's financial health and stock performance can find additional insights through InvestingPro, which offers over 10 InvestingPro Tips for a more comprehensive analysis. These tips shed light on aspects such as CSL's dividend consistency, debt levels, valuation multiples, and profitability forecasts. For those interested in a more in-depth analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
Full transcript - CSL Ltd (CSLLY) Q2 2024:
Mark Dehring: Ladies and gentlemen, good morning, and welcome to CSL's first half results call for fiscal 2024. It's Mark Dehring speaking, and I'm pleased to be joined by several of CSL's leadership team. With me here are Dr. Paul McKenzie, CSL's Chief Executive Officer; Joy Linton, CSL's Chief Financial Officer; Dr. Bill Mezzanotte, Executive VP and Head of Research and Development; Andy Schmeltz, Executive VP, CSL Behring, Stephen Marlow, Senior VP and General Manager, CSL Seqirus; Herve Gisserot, Senior VP and General Manager at CSL Vifor. Today, it's a little -- we're going to vary a little bit from past practice. Paul will, of course, provide an overview of the results and operations, and then we'll have Bill Mezzanotte providing some updates on the R&D portfolio including the CSL 112 top line data announced yesterday. Joy will then provide some additional detail on the financials. And Paul will finish up with some comments on outlook. After which we'll move to Q&A. [Operator Instructions]. Please note, this briefing is being webcast. And lastly, before we start, I draw your attention to the forward statement disclaimer contained in the slide deck. And with that, I'll pass over to Paul McKenzie, Paul.
Paul McKenzie: Thank you, Mark, and good morning, everyone. Great to be back in Melbourne. Thank you for joining today's CSL half year results call for 2024. As Mark mentioned, we released top line data for CSL112 yesterday, and Dr. Bill Mezzanotte will talk to this shortly. While not the clinical outcome we were looking for, the study was well designed, and well executed. I would like to second Bill's thanks and gratitude to the entire CSL112 team, the clinical investigators and their teams and the patients who participated in the trial. Before I deep dive into the results, I wanted to take the opportunity to reflect on my soon-to-be first 12 months as CEO. I continue to be energized by the passion that my colleagues bring to their work every day. All 32,000 of us at CSL and our partners are proud of the difference we make to patients, donors and public health. Our portfolio of life-changing medicines and vaccines provide significant benefit to patients around the globe, managing diseases of significant unmet need. CSL Behring is a unique and resilient business with a strong growth outlook. My first 12 months as CEO has only reinforced that view. I continue to be bullish on the outlook for CSL Behring and look forward to sharing with you the great progress we are making in our plasma manufacturing and commercial activities. In our CSL Seqirus business, the value of our differentiated vaccine portfolio continues to deliver value to public health systems now and well into the future. Reflecting on CSL Vifor, our commercial portfolio addresses significant unmet need in patient journeys in iron deficiency and nephrology. While the strategic potential of the business and the adjacencies with CSL Behring portfolios remain strong, we are working to address a number of challenges. Some of our existing portfolio is facing commercial and regulatory headwinds. For example, step edit pressure with Ferinject or a reimbursement bundling of KORSUVA in the U.S. Further, some of the pipeline assets did not meet their desired clinical outcomes, a risk inherent in research and development pursuits. These collective dynamics have dampened our near-term financial growth expectations for CSL Vifor. On a positive note, CSL Vifor continues to generate strong revenues and margins, together with strong cash flows, and we are extracting synergies over and above our initial expectations. Additionally, CSL Vifor has brought a number of enterprise-wide opportunities, leveraging the capability and strength of 3 businesses in a new and unified way. An excellent example of this is patient blood management. However, this initiative will take time to deliver returns. Most importantly, as a group, CSL remains in a strong position to deliver annual double-digit earnings growth for the medium term. Speaking of the group results, let's move on now to Slide 4. I'm pleased to report that CSL has delivered an excellent result for the first half of 2024, driven by strong performance by the CSL Behring business. First, the headline numbers. Revenue was $8.1 billion, up 11% at constant currency. NPATA was $2 billion, up 13% at constant currency. Net profit after tax was $1.9 billion, up 20%. In terms of the major highlights for the year, the CSL Behring business delivered strong growth across the portfolio, especially the IG franchise, which grew very strongly, up 23%. Specialty Products, KCENTRA and HAEGARDA, continue to deliver and be the standout contributors to that portfolio. Gross margin recovery is underway, and Joy will take you through the detail of that shortly. There are a number of positive plasma initiatives gaining momentum, including the new Rika rollout. Regulatory filing for Garadacimab, our next-generation HAE therapy has now been accepted for review by the FDA and EMA, and we anticipate bringing this product to market later this calendar year. It's also worth noting that Japan submission is on target for approval this fiscal year. Moving over to CSL Seqirus, which delivered solid sales growth, outperforming the market in a very challenging season. This was primarily driven by our adjuvanted FLUAD product, which grew 14%. In partnership with Meiji, regulatory approval was achieved for the world's first self-amplifying mRNA vaccine for the prevention of COVID-19 in adults. And not only did we commence the Phase III clinical trial for aQIVc in the Northern Hemisphere, we enrolled our last patient well ahead of schedule in January 2024. CSL Seqirus continues to expand its differentiated portfolio, and we are passionate about bringing these innovations to the market over the next few years. Switching over to CSL Vifor, the business is well positioned for the loss of exclusivity in iron in Europe with limited impact of this seen to date. TAVNEOS, a treatment for patients with severe active ANCA-associated vasculitis has exceeded expectations, mainly in Germany and the U.K. with this momentum projected to continue as we expand into additional EU markets. And finally, patient conversion to MIRCERA, our long-acting ESA has been strong. Moving to Slide 5. Focusing now on CSL Behring, our revenue was up 14% at constant currency. As I mentioned, growth in our Ig franchise was exceptional. Sales were up 23% with strong growth recorded across all geographies as global supply recovered significantly. Our intervenous Ig products PRIVIGEN and INTRAGRAM were up 27% in total, and our subcutaneous product, HIZENTRA, up 18%. As we outlined at Capital Markets Day in October, underlying demand for Ig continues to be robust and patient diagnosis rates continue to grow in core indications. We have also launched a 50 ml prefilled in for HIZENTRA in the U.S. and the EU. We now have a wide range of prefilled syringe sizes to help meet the individual needs of patients living with both PID and CIDP. Our albumin portfolio grew by 8%, with strong growth in Turkey and Mexico and solid growth in both Europe and the U.S. In China, competition remains strong, and our team continues to advance our positioning. Hemophilia was up 8%, where once again the standout performer was IDELVION, which was up 7%. We maintained leadership positions with IDELVION in the U.S., several key markets in the EU and Japan. Our new transformational gene therapy HEMGENIX has had an accelerating rate of patient referrals. We are confident administration to patients will follow as we navigate through the complexities of the fragmented U.S. health care system as a first mover with gene therapy in hemophilia. HEMGENIX is recognized as the new paradigm for patient and was recently awarded the Prix Galien Award for best product for rare orphan diseases. Specialty products were up 6% led primarily by KCENTRA, which grew 12%. HAEGARDA was up 9%, driven by strong growth in the EU and despite increased competition, has been able to add new patients and preserve our existing patient base. You will note the category Other was down 16%, which included COVID vaccine sales in the prior period. Moving to plasma highlights for CSL Behring. Let me start off by reiterating that the underlying fundamentals of plasma collection remains strong and that there has been continued momentum for plasma donation growth. Digital transformation and continuous improvement initiatives have supported the increases in new donors, reactivated donors and returning donors. We recently expanded our geographic footprint for plasma collections, opening our first center in Puerto Rico. This builds on the network diversification we already have in Germany, Hungary and China. One of our initiatives to drive efficiencies through the network is the introduction of the Rika plasmapheresis platform. Our partner, Terumo, has submitted their nomogram I trial data to the FDA and we have aligned with them our rollout plan over the next 18 months. If nomogram I is approved, this initiative will provide a 10% lift in yield across the fleet. One of the pillars from our strategic focus areas is to expand the CSL Behring gross margin. We are making good progress with cost per liter reducing 10% over the period compared to the prior period. There is still much more to do, however, and we will be working hard to continue this momentum but gross margin recovery is underway. Joy will talk more to this shortly. Moving on to the next slide and CSL Seqirus, our vaccines business. First of all, a few comments on the current season dynamics. The industry has seen reduced rates of influenza immunization due to vaccine fatigue and the introduction of RSV and shingles vaccines. Given the reduced rates of immunization, there has been ample supply, giving rise to pricing pressure as manufacturers look to clear stock. Across the industry, we have seen an overburdened health system with staff shortages and reallocated government funding. Against this backdrop, CSL Seqirus has outperformed the market, delivering solid revenue growth of 2% at constant currency. Our adjuvant vaccine FLUAD reported strong growth of 14%, driven by early supply performance and a preferential recommendation from the ACIP in the U.S. Considering the broader environment, CSL Seqirus growth is outpacing the competitors, and we expect continued growth over the long term from commercialization of our asset pipeline, which I will talk to on the next slide. Some operational highlights for Seqirus. FLUCELVAX, 6-month plus age extension was approved in the U.K. Australia and New Zealand. And for FLUAD, 50-year-plus age extension was approved in the EU. For FLUAD, we also received a preferential recommendation in Canada for the 65-plus population. On the pandemic side of the business, the advanced purchase agreement with the UK was awarded solely to CSL Seqirus. We were selected by BARDA to deliver H5N8 antigen to the U.S. government for preparedness against potential avian flu outbreak in humans. In relation to our product innovation journey, we commenced the Phase III trial in the Northern Hemisphere for aQIVc. This brings the best of our technologies together, cell culture and our proprietary adjuvant. Our next-generation self-amplifying mRNA COVID vaccine received regulatory approval in Japan. It is the first self-amplifying mRNA vaccine approved anywhere in the world. And just last week, you may have noticed some very positive immune response duration data published in The Lancet. And finally, we commenced a Phase I trial for our self-amplifying mRNA for seasonal and pandemic influenza. Turning to CSL Vifor on Slide 9. Revenue was just over $1 billion. We have not provided growth numbers similar to the other business units as the prior comparable period only included 5 months following the acquisition of Vifor in August 2022. Starting with iron. Ferinject in China was included in the National Reimbursement Drug List. As you may know, the iron market is transitioning with the introduction of step edit measures introduced by U.S. payers, this has had a positive impact on Venofer, CSL Vifor's low-dose iron product, but puts pressure on the high dose iron product, Injectafer. We are also meeting the challenge of loss of exclusivity in Europe, and we are well prepared for this. We remain confident in the growth strategies we outlined at Capital Markets Day. Our patient blood management initiative which includes iron is making good progress, but this will take some time. Moving on to nephrology, continued strong ESA performance in the U.S. was a result of following patient conversion to MIRCERA. Kapruvia was approved in a number of emerging markets and launched in the Netherlands and Iceland. And we've seen great strong performance in Germany, France and Austria. VELPHORO's performance in the U.S. was impacted by reduced inventory levels as requested by our customer. More recently, VELPHORO in China was approved and included in the National Reimbursement Drug List. TAVNEOS saw strong sales growth with patient penetration across all launch markets, with regulatory approval also being obtained for South Korea. We also received the pediatric indication for Veltassa in both the U.S. and in Europe. So with that, I will now hand over to Bill Mezzanotte for his update on CSL112 and other R&D products.
William Mezzanotte: Thank you, Paul. I appreciate the chance to discuss AEGIS-II. Just some opening remarks. AEGIS-II was one of the largest and certainly most complex clinical trials we've conducted at CSL. It was supported by years of nonclinical and clinical mechanistic work and a large Phase 2 safety study. We initiated AEGIS-II in 2017, and our trial team research partners and patients hung in there through the disruptions of a global pandemic, multiple wars and widespread political crisis. We conducted the study in 49 countries, had over 900 investigator sites and enrolled over 18,000 patients who we needed to follow for at least 1 year from the time of enrollment. Despite the challenges, the extended enrollment time required, we were still able to follow to completion of 1 year, all but 2 patients. That's a remarkable achievement. And so on behalf of CSL, I'd like to thank all the patients, families, caregivers and investigators for their support and participation in the AEGIS program. And as a result of conducting this mega trial, CSL has enhanced capabilities that already are and will, in the future, serve our patients and portfolio very well. Here on this slide is the design of the study, and details of this have been published previously, but let me touch on a few salient points. This was a randomized, double-blind, placebo-controlled study to investigate whether CSL112 added to the standard of care could help reduce recurrent major adverse cardiovascular events, in particular, stroke, myocardial infarction and cardiovascular death in patients experiencing an acute myocardial infarction. Patients could be treated in accordance with appropriate country guidelines and interventional approaches. They had to be randomized and received their first dose of study medication within 5 days of presenting with acute MI. Patients were randomized 1:1 to CSL112 or matching placebo via infusion. The dose of 6 grams was chosen based upon clinical pharmacokinetic and pharmacodynamic assessments from earlier studies, nonclinical measurements of cholesterol efflux and rigorous assessment of safety and toxicologies. After the first infusion, patients were to receive 3 more weekly infusions within the first month with investigator follow-up through to the primary time of interest 90 days and then assess onwards at 180 and 365 days post MI. In the first 90 days after an MI, patients are most vulnerable to a recurring event and the risk slowly declines over the first year. The primary event was the time to first occurrence of any component of the composite endpoint of CV death, MI or stroke from time of randomization through 90 days. The study was designed in collaboration with an internationally prominent and geographically diverse executive steering committee, who strongly endorsed conducting the trial in the dose regimen selected and the endpoints chosen. The study included 2 interim assessments for futility. The quality of the study conduct was excellent as was the data capture. The results were clear. On the next slide, I will share the results. The study did not meet its primary endpoint, which was a statistically significant reduction in major adverse cardiac events at 90 days. There were no major safety or tolerability concerns with CSL112. As a result of these results, we do not plan on making any filings for approval to any major health authority. However, we do plan to discuss the results with major health authorities and to conduct numerous additional analyses to better understand the data and then determine any next steps in development. Importantly, study results will be presented at the American College of Cardiology Scientific Sessions on the 6th of April this year and published in a peer-reviewed journal. Until then, by ACCC rules of disclosure, we are not permitted to share externally any further details about the trial results. Obviously, we, as an organization, are disappointed in the results, but not in the effort of our people. Given the unmet need in these patients during this vulnerable time period, the ongoing scientific and medical interest in high-density lipoprotein therapy and the potential value to CSL, I firmly believe we did the right thing. My goal when I started at CSL was to build an organization capable of delivering CSL112 and an organization that could be successful with or without positive 112 results. I believe we have achieved both. To complete AEGIS-II, we had to significantly enhance our capabilities to run the trial. All these capabilities will be utilized as we relentlessly and methodically grow and diversify our pipeline into the future. While today is not to be meant to be R&D Day, we'll have that again in October, I did want to touch base on the next slide on a few recent pipeline highlights that reflect our ability to build and diversify our pipeline. Here are 4 quick updates, some of which as Paul has touched upon already, to reflect my enthusiasm for the portfolio. First, building on our enhanced capabilities to run cardiac outcome trials, we saw positive Phase II results for the use of clazakizumab our anti-IL-6 antibody in patients with end-stage kidney disease. These patients historically have very high levels of inflammation and very high mortality rates, primarily due to cardiac disease. Reducing such inflammation with therapies like clazakizumab has been associated with reduced cardiovascular risk. We will be shortly initiating a Phase III trial to test this hypothesis. The study will be much smaller than AEGIS-II but fully powered to demonstrate the benefit we believe exists. We will be employing dialysis sites like Fresenius to help us conduct this international trial. Garadacimab, as Paul mentioned, our Factor XIIa antagonist for the treatment of hereditary angioedema with a great clinical safety and tolerability profile is now under regulatory review in the U.S., EU and in other countries like Japan. We fully expect this potentially best-in-class therapy to receive first approval at the end of this calendar year. Building on our critical HIZENTRA franchise, we finished enrollment in our Phase III study to evaluate the safety and efficacy of HIZENTRA in dermatomyositis, a rare disease high morbidity and mortality. We should see Phase III data around the time of R&D Day in the second half of the year. HIZENTRA has received orphan drug designation for this indication. Finally, as Paul mentioned, our adjuvanted high antigen cell-based flu vaccine, aQIVc, for patients 50 years and older just completed enrollment for the Phase III immunogenicity trial which will allow regulatory filing in the U.S. aQIVc has the potential to demonstrate best-in-class efficacy along with a very good tolerability profile and the reassuring safety profile we have seen over the years with both our cell-based antigen and our MF59 adjuvant. Data will also be available towards the end of calendar year 2024. And if positive, we will file soon thereafter. So stay tuned. I look forward to sharing more on these programs and many more things at our R&D Day in October. Now on to Joy.
Joy Linton: Thank you, Bill. Still very much to look forward to in the R&D pipeline. Good morning, everyone. As Paul indicated, CSL has delivered a strong result for the first half of fiscal year 2024. On a reported basis, NPATA was USD 2.017 billion, up 11%. On a constant currency basis, NPATA was $2.056 billion up 13% after adjusting for a currency headwind of $39 million. As a reminder, references to NPATA are attributable to CSL equity holders only, and this result does include a full 6 months contribution from CSL Vifor. On this slide, we have again provided a bridge between NPATA down to NPAT at constant currency, and let me run through the numbers. Starting with NPATA of $2.056 billion, the following adjustments are included. $129 million attributed to the amortization of acquired intellectual property. The increase from the prior period was predominantly due to the 6 months versus 5 months of amortization for CSL Vifor. One-off acquisition costs of $49 million is made up of continuing integration costs relating to the acquisition of CSL Vifor of $18 million, and the final 1 month unwinding of the inventory fair value uplift recognized on the acquisition of CSL Vifor. This is a noncash item of $31 million. After adjusting for tax and noncontrolling interests, NPAT attributable to CSL shareholders for the half was $1.942 billion. In the financial statements, you will find an extension to the segment note, Note 1, which provides a detailed bridge between the statutory results and the underlying results. I hope you find this table useful. Now turning to the group financial highlights and looking at some of the financials in more detail on the next slide. On a constant-currency basis and at NPATA, total revenue for the group was up 11% to $7.954 billion. A breakdown of our major products by revenue is provided for you in Appendix A and B of this presentation. Gross profit was $4.491 billion, also up 11%. And the group operating result was up 13% to $3.796 billion. Research and development costs were up 11%, in line with sales growth and is expected to be within our guidance envelope of 10% to 11% of revenue for the full year. General and administration costs were down 7% over the period, arising from favorable FX variances and efficiencies that we are generating from bring enabling functions such as HR, finance, legal and IT into a single global structure and also some of the cost synergies from CSL Vifor are included in this line. Net finance costs increased due to the higher interest rates on the floating portion of our debt and the full 6-month impact of the CSL Vifor debt. The weighted average cost of debt was about 4.2%, up from 3.85% with the ratio of fixed to floating remaining at 70-30. As previously mentioned, the NPATA attributable to shareholders of CSL was up 13% at constant currency. The reported effective tax rate increased to 19.2% in line with guidance provided at the full result. The increase was due to the geographic profit mix and an increase in the corporate tax rate in the U.K. We continue to expect for fiscal year '24 the effective tax rate to be within the range of 18% to 20% at constant currency. Cash flow from operations increased by 9% to $1.069 billion, was primarily a result of the growth in sales. Our NPATA EPS was up 13% constant currency or 11% reported. The interim dividend of USD 1.19 per share was up 11%, and this translates to approximately AUD 1.81, which is up 12% on the previous year given the strong U.S. dollar. Before I move on this slide -- off this slide, you may notice when you get to the financial statements that we have reallocated certain corporate costs on a functional basis from general and admin into either cost of sales, sales and marketing costs or R&D. And to help users of the financial statements to compare expense lines, we have restated prior year periods in a similar manner. This is a reallocation of costs only and does not affect the bottom line. So turning to the next slide. On this slide, this is our segment reporting showing gross profit, less sales and marketing expenses for each of our business units. You will recall, research and development costs and G&A expenses are no longer allocated to individual segments, as this reflects the way we now manage the business units. The main metric I'd like to focus on for this slide is the gross profit margin for CSL Behring. The gross margin recovery is underway and for the half improved to 50% at reported rates. This number is slightly better at constant currency and marginally above our expectations, having benefited from price increases earlier than anticipated. The initiatives in plasma collections that we have implemented together with manufacturing efficiencies are also driving improvement in our gross margin. We are making encouraging progress, but we still have work to do and we remain confident in getting back to pre-COVID margins consistent with what we outlined at the Capital Markets Day last October. And with that, I'll hand back to Paul.
Paul McKenzie: Thank you, Joy. I'd now like to make a few comments on our outlook. Looking specifically at CSL Behring, we continue to induct strong demand for Ig across its core indications. With an accelerated rate of referrals, we look forward to increasing patient administration of HEMGENIX. Our ongoing initiatives in plasma collection and manufacturing yield will support our efforts to further recover our gross margin to pre-COVID levels. In relation to Horizon 1, we are seeing promising Ig recoveries in the early deployment for the first of a series of planned near-term upgrades to the current manufacturing process. Additional technology improvements are also in development for future deployments. And for Horizon 2, preclinical studies have been initiated, and health authority engagement is ongoing. For CSL Seqirus, we will continue our strategy of product differentiation by progressing global registrations for our next-generation, self-amplifying mRNA COVID vaccine. As a reminder, this business has strong seasonality. Approximately 85% of the sales are recognized in the first half of the year, with expenses more evenly split over the year. As a result, CSL Seqirus will be loss-making in the second half of the year. For CSL Vifor, we are operating within an evolving iron market. While there are challenges for near-term growth, we are well positioned for iron competition in the EU and are advancing our geographic expansion. We will continue to drive the sales momentum of our nephrology products, including MIRCERA and the recent launches of TAVNEOS and Kapruvia. Our focus remains on unlocking value by leveraging capabilities across the CSL Group. An example of this is addressing together with CSL Behring the significant public health need in patient blood management. For CSL at the group level, I am pleased to reaffirm our financial guidance for fiscal year 2024. We expect revenue growth to be approximately 9% to 11% over fiscal year '24 at constant currency. With NPATA expected to be in the range of approximately $2.9 billion to $3 billion at constant currency, a growth of between 13% and 17%. I also am reaffirming our double-digit earnings growth outlook over the medium term that we shared at the Capital Markets Day. And of course, being forward-looking statements, these are subject to the usual disclaimers as mentioned at the start of this presentation. With that, we will move on to your questions.
A - Mark Dehring: The first question comes from Lyanne Harrison at Bank of America (NYSE:BAC).
Lyanne Harrison: I've got two parts to my question. So what I might do to is, first of all, talk about the full -- the dialysis business. This half, there's a little bit of weakness there. Can you talk to the challenges specifically for dialysis and also the run rate going forward for the next 6 to 12 months, given -- do you expect that to improve given new launches ahead?
Paul McKenzie: Thank you very much for the question, Lyanne,in terms of our Vifor, look, we have strong commercial portfolio. We're going to see some limited growth in the near term because of market challenges, not just in dialysis, but market challenges relative to step edits, that limit the use of a product in the marketplace as well as Kapruvia reimbursement, which has been tied in with the bundle issues in the U.S. dialysis system. In addition, some of our pipeline products did not have the clinical outcomes that we are looking for. But please note, this is a strong revenue and gross margin business, and we are really proud of what we've been able to do with integrating the company in and achieving above and beyond on our synergy targets. So our strategic vision remains compelling, although the timing of the entire ecosystem will take longer than we had envisioned.
Lyanne Harrison: And just to follow up on that. You mentioned gross margins and understand the issues there with the step edits, but is that a particular headwind for Vifor's gross margins? Or are there other factors impacting the gross margin? Because we note that it's weaker compared to the same period last year.
Paul McKenzie: Yes. I think it's a great point. So let me just clarify. On the step edits, what happens is we end up going to Venofer as the low-dose iron product, which has a lesser margin than Ferinject or Injectafer.
Lyanne Harrison: And if we think about growth for the Vifor business going forward, how should we think about that for the next 6 to 12 months? Are we looking mid-single digits, high single digits? Or is that something you can provide some commentary on?
Joy Linton: Lyanne, it's Joy. I don't think we're necessarily going to provide that sort of guidance by business unit. But I think what you're hearing us saying is a bit over 12 months ago, we'd said we could sort of see double-digit revenue growth across the medium term. And I guess that's what we're stepping back from today. So the growth will be much softer than that.
Mark Dehring: Thanks, Lyanne. Next question comes from David Low at JPMorgan (NYSE:JPM).
David Low: Perhaps a question for Joy. I mean I heard your comment that the Behring gross margins were ahead of expectations. Can I get you to talk a little bit about the 10% reduction in cost per liter and whether we're seeing that in the gross margins yet? And then perhaps about the trajectory of the recovery given you've got quite a wide range of timing on that at the moment.
Joy Linton: Thanks, David. So yes, the 10% is average year over average year. So you are seeing that in the gross margins, which is why we put it out there. And in terms of -- so it's the first part. And on the second part of your question, on the go forward, really, I think we're quite consistent with what we said at Capital Markets Day. So we're still saying 3 to 5 years from Capital Markets Day. And in '24, I'm kind of still saying 1% plus or minus a bit, perhaps some a little bit more on the plus side than the minus side. So good progress so far, perhaps slightly ahead of where we might have thought, but that's really a function of some earlier pricing than we expected, still lots more work to do, but so far, so good.
David Low: Just the other question I had was just on Vifor. With the breakdown of sales and marketing, we can see that Vifor's allocation of sales and marketing, certainly to revenue at north of 20% is well ahead of the other divisions that are sub10%. Just wondering, is that the reality going forward? Is there -- or is there opportunity there to wind down the sales and marketing cost as a percentage of sales?
Paul McKenzie: Yes. We'll continue to look at opportunities of how we continue to enhance our sales model there with learning the best from Behring and Seqirus as well as look for opportunities of how Vifor sales force can contribute in areas like patient blood management.
Joy Linton: Yes. And I might just -- just a slight build on that, David. It is a bit of a different model. So I don't think you'll ever see it be a Behring level as in terms of percentage of sales because there is things like distribution agreements and payments to partners, et cetera, in there. Having said that, it was probably closer to 25 than 20, so we've actually already taken quite a lot of cost out of that. And as Paul said, there's more work to do.
Mark Dehring: Next question comes from Saul Hadassin from Barrenjoey.
Saul Hadassin: I guess first question for me, maybe to Paul. Paul, the commentary around the ability to generate double-digit earnings growth over the medium term. Just looking at the performance of both Seqirus and Vifor this half and that Behring did all the heavy lifting. Is your expectation that either of those divisions will contribute to that double-digit earnings growth positively? Or is Behring going have to do effectively the same heavy lifting that it did this half over the next 2 years?
Paul McKenzie: In the medium term, we expect all business units to contribute. I think in any given year, you'll see an ebb and flow across the business units.
Saul Hadassin: And Joy, if I could just follow up with one on the net operating cash flow. Know you paid a lot more tax this half, but particularly receivables within the working capital look like it went up materially. Just wondering if that's a timing issue that will reverse out in the second half.
Joy Linton: Yes, that's correct, Saul. Really a function of the Seqirus timing and just the nature of the Northern Hemisphere season vis-a-vis last year. That will -- in fact, we've had a very strong collections month in January, so that will phase through in the full year.
Mark Dehring: Next question comes from David Stanton at Jefferies.
David Stanton: If you can give us sort of an update further to a previous question on the margin recovery you expect in Behring, you were saying that -- we know it's in the same sort of time frame. But can you talk to the major drivers and potentially proportion you expect all of that margin growth from each of those major drivers, please?
Joy Linton: I'll make a couple of comments and then maybe hand to Andy. David, I would say we remain of the view that the drivers are broadly consistent with what we shared at Capital Markets Day. So continuing to see a reduction in the cost per liter to collect is still a focus. And a lot of -- and Andy can comment on the work that's going on around productivity in the centers. The rollout of the Rika machine is a clear and demonstrable driver of margin expansion. The yield initiatives that we've been talking about, both Horizon 1 and eventually Horizon 2, there are important operational activities that are going to continue to drive that through. And then, of course, you've got mix of the products. And there was actually even a bit of a drag still with PRIVIGEN growing a bit stronger than HIZENTRA in the first half, the rollout of prefilled syringes in the second half will, on HIZENTRA, that should help a little bit there. So as we start to see HIZENTRA come back or more and perhaps importantly, the PRIVIGEN growth stabilize, I think you'll start to see some of that margin expansion come through in that but broadly consistent with what we would have said in October. But I might hand to Andy for a couple of additional comments.
Andy Schmeltz: Thank you. Joy really outlined it well. We have multiple levers underway over the medium term to improve our margin and return to pre-COVID levels over the next 3 to 5 years. I mean, certainly, within CSL Plasma and reducing CPL, cost per liter, really enhancements of technology in the way that we can bring down donor fees, in the way that we improve the operational excellence and effectiveness in our plasma centers, the rollout of the Rika machines devices which are in steady-state rolled out across the fleet with Nomogram I as a key enabler. There'll be about 10% more plasma on average per donor. And then also beyond this cost per liter in plasma, as Joy also mentioned, our Ig yield initiatives, we have these Horizon 1 initiatives, process improvements from a manufacturing perspective and then Horizon 2 new processes, which have the potential to improve Ig yield by about 20% overall. So lots of opportunity to improve our cost base there. And then also, as Joy said, the product mix over time should improve. Obviously, lots of volume growth, but we do see the opportunity for price, certainly with continued growth of HIZENTRA in our Ig franchise. So I think I'll leave it at that. But we're well on our way to get where -- to meet or see pre-COVID margins over the next 3 to 5 years.
David Stanton: Just following up on the second part of that, my first question. So it's all -- should we just assume they're all proportionately the same amount of contribution?
Paul McKenzie: They're all equal in contribution, right? Each of them, depending on where we're at in the overall cycle, right? I mean the collections have a direct impact. When you collect the product, the yields have a continuous impact. So I think we have lots of levers to pull nowadays, David, and I don't think you could look at them as equal contributors.
David Stanton: Yes, yes, excuse me. Sorry, I didn't mean to cut you off there. My second question then is, can you give us an update on the time line for potential reimbursement approval for Garadacimab in the U.S.? I know that you say you expect approval in the U.S. by the end of this calendar, but should we assume 6 months later for reimbursement approval. So it's sort of an F '25 story?
Andy Schmeltz: Yes, Andy here. I can take that one. For Garadacimab, as we expect approvals, it's our fiscal year '25, but later in the calendar year '24. In the U.S. certainly, some formulary approvals will come with a lag, but we expect to be able to launch quite quickly and have uptake of the medicine. Certainly, when you get into international markets, Europe, et cetera, there's going to be the typical lag in negotiation with health authorities, reimbursement authorities for uptake. But we're very excited, and we are bullish because of our heritage in HAE that we really have an exciting offering with Garadacimab and we want to get out of the gates quickly.
Mark Dehring: Great. Thanks, Dave. Our next question comes from Gretel Janu at Evanson Partners.
Gretel Janu: Thanks very much, Mark. I just wanted to start firstly on Ig, very strong. You did say back in August that you were looking for mid-teens volume growth for FY '24. I'm assuming you exceeded that in the first half, but you have also mentioned pricing exceeds your expectations. So how much did price contribute in the first half?
Paul McKenzie: If you look at pricing, around mid-single digit...
Joy Linton: Yes.
Gretel Janu: And do you still confirm mid-teens volume growth for FY '24?
Joy Linton: Yes, we do. Yes. That's correct, ever so slightly. A little bit stronger than that in the first half, but we would hold our view on the full year. That's correct.
Gretel Janu: Great. And then I just wanted to touch on Rika and the 18-month rollout there. So given all the issues in terms of supply and reliability you've had in the past 12 months there, how are you approaching the rollout? Should we expect just steady-state kind of rollout over the next 18 months? Or will it be more pushed towards the back half?
Andy Schmeltz: So as we stand today, about 10% of our fleet in the U.S. now has the Rika plasmapheresis devices. That's about double the number of plasma centers as October. We expect, as we get to the end of our fiscal year in June that we should have about 20% of our fleet with the Rika devices. And then over the course of calendar year '25, the rollout to the rest of our U.S. fleet. So we feel that this is appropriate and purposeful to enable us to have smooth training and uptake. And of course, given the nomogram I filing by Terumo is at the FDA right now, we think that, that times nicely also with the ability to benefit from nomogram I.
Mark Dehring: Next question comes from Sean Laaman at Morgan Stanley (NYSE:MS).
Sean Laaman: First question is just a bit of a temperature check on Vifor. So I mentioned some challenges for the business on KORSUVA bundling, the step edits, the generic competition, et cetera. But I'm wondering, once you get past these sort of near-term hurdles, do you still have the same growth expectations either in actual percentage growth terms or dollar value or that you had for the business when you bought it, i.e., does the business hold the same value for you today, given these challenges compared to when you first acquired it?
Paul McKenzie: The simple answer is yes. And I think what we're also finding is there's other opportunities. It's just making sure we can coordinate and choreograph the timing of those opportunities, but the simple answer is yes.
Sean Laaman: And second question relates to Rika. So the 10% yield improvement is quite material. How does the dialogue go with potential donors, given that you're sucking out 10% more volume from their veins than before? And how does that translate to whatever you might have to say on donor remuneration, et cetera?
Paul McKenzie: Thanks for the question. What we look at every time we introduce a new concept or new capability, we go through a typical donor consent with the donor, so the donor will be aware of the new nomogram going in. The beauty of the Rika machine is that from a donor viewpoint, the amount of time on the machine will not change. So the donor will not, in terms of what we're compensating for the donor 4, which is their time on the bed, they won't see a significant change in that discussion. And we'll obviously do some market testing of our best approach as we now have that digital capability we've talked to you about, where we can really test and get our messaging out. And we really do feel that the donors, they have taken very well to the machine, and we think they'll continue to be very supportive moving forward.
Mark Dehring: Good. Thanks, Sean. Next question comes from Steve Wheen at Jarden. Go ahead, Steve.
Steven Wheen: Yes. Thanks, Mark. My question is just around the guidance. For the first half of '24, you've done 11% revenue, which is at the top end of your range, and at the NPATA level you're at 13% growth, which is at the bottom end of your range. I'm just wondering if that mismatch there, whether there -- what was sort of perhaps a bit unexpected in the margin in the first half? And what gives you the confidence in the second half to sort of make that back up to be a bit more squarely within the range that you've set and reaffirmed?
Joy Linton: Yes. Thanks, Steve. It's Joy here. Really, just a few things on timing and I'd probably even call the tax line out, right? So in the first half, we're at 19%. That's probably a bit stronger than we would look to be in the full year. So nothing particularly that would we -- that worries us about that. In fact, we're fairly comfortable on the NPATA guidance.
Steven Wheen: Okay. Second question I had was just with regards to 112. Just curious from -- you've obviously built some manufacturing capability there and how that does get redeployed. Any sort of accounting issues that we need to consider in response to the results that you've received?
Paul McKenzie: Just the good news is we have really good engineers, present company excluded. But the design of the facilities were made such that we can repurpose those facilities to other uses. So we do not see a material impact for the company.
Mark Dehring: Good. Thanks, Steve. Next question comes from Andrew Goodsall at MST Marquee.
Andrew Goodsall: Just looking at the - does seem that there's been a little bit of a skew of the recovery of sales growth into Europe. So just wondering what that mix has meant in terms of top line and margins.
Andy Schmeltz: I can take that one specifically. One of the effects of that with Ig is that we see higher kind of return of supply to Europe which is why PRIVIGEN -- one of the reasons why PRIVIGEN has such strong growth of 35% in the first half. It's due to this resupply to the market, which we had redirected some of the Ig supply during COVID. And so we're excited for that and certainly benefiting that we should normalize back going forward.
Mark Dehring: Did you have another question, Andrew? We seem to have lost Andrew. So we'll go to our next question. Next question from Craig Wong-Pan at Royal Bank of Canada.
Craig Wong-Pan: Just a question on HAEGARDA. I mean, quite good growth there of . Just wanted to understand what drove that increase in the EU.
Andy Schmeltz: We grew pretty much in line with the market. So can you specify your question specifically about Europe?
Craig Wong-Pan: I mean sort of HAEGARDA growth of 9%. I mean that's been sort of stronger than what you've grown at before. I just wanted to see if there was some particular driver there. But if what you're saying is that you see that as growing in line with the market, then that's fine. I just wanted to see if there was any specifics there that kind of drove that sort of -- it seemed to be higher than what you've achieved in the past.
Andy Schmeltz: No. We're pleased that we've maintained share with HAEGARDA and the market growth is strong in the first half.
Craig Wong-Pan: Okay. And then second question, just on the Velphoro sales that U.S. inventory adjustment, is that just a one-off for this period? Or will that impact future periods as well?
Herve Gisserot: We do not expect further inventory adjustment going forward for Vifor in the U.S. In fact, the in-market performance of Vifor remains extremely strong. This is the only phosphate bile in the U.S. growing in a declining market, high single digit in terms of new prescriptions and total prescriptions. So we are very pleased with the commercial performance. There was indeed a significant inventory adjustment at FMC (NYSE:FMC) and Fresenius Rx in the first half but we expect things to normalize going forward.
Mark Dehring: Good. Thanks, Craig. Next question comes from Laura Sutcliffe at UBS.
Laura Sutcliffe: First one is just going back to Rika. I think you've outlined an 18-month time frame to completion in the U.S. Commentary from Terumo point was something maybe a bit more optimistic, I think they're saying 12 to 15 months. So could you maybe just give us some color there? Are you being conservative? Or is it that you have some more work to do on top of what Terumo has to do. If you could just help us understand why we've got 2 different time frames.
Andy Schmeltz: Thanks for the question, Laura. Not intended to signal anything whatsoever. We're aligned on the timing consistent with the plan. And we're perhaps maybe a little bit more conservative. If we can do it within 12 to 15 months or faster, we absolutely will. Our interest is to make sure that there's no hiccups and that there's continuity of transition in plasma supply.
Laura Sutcliffe: Okay. That's clear. And then just a second one on IV iron. I think you've talked about your level of preparedness for some of the maybe near-term lumps and bumps in the IV iron market. And I think you mentioned Europe specifically, but I didn't hear any mention of the U.S. I was just wondering if your plans factor in any expectations for a generic to Venofer in the U.S. I know we talk about Ferinject and Injectafer a lot. But I think Viatris is trying to get the generic be approved.
Herve Gisserot: So regarding the U.S., we are not expecting any generic competition before mid of 2026. So we still have more than 2 years ahead of us to maximize the opportunities with Injectafer, especially leveraging the new indication in heart failure patients suffering from iron deficiency. In Europe, we are extremely well prepared. We are facing limited competition so far. And yes, as stated, we are extremely well prepared to navigate this new competitive landscape.
Laura Sutcliffe: Okay. So just to be clear, you're expecting, sorry, Venofer's -- the generic to Venofer from Viatris to be rejected in the U.S.
Herve Gisserot: Yes. Sorry, my answer was on Injectafer. I don't want to comment on potential iron sucrose generics. This is a topic for years. So we will see. We don't know. This is more a question for Viatris versus for CSL. We're extremely well prepared. Venofer is by far the leading product benefiting from this step edit landscape as we described earlier. So we are ready for any kind of competition.
Mark Dehring: Thanks, Laura. Next question comes from Mathieu Chevrier from Citi.
Mathieu Chevrier: The first one is on Seqirus. I just wanted to get your views on the potential impact of your move to trivalent vaccines from the next flu Northern Hemisphere season in the U.S.
Stephen Marlow: Mathieu, it's Steve Marlow here. Just to comment on the change, which is the change from the quadrivalent to the trivalent, just to get everyone on the same page. There's 2A strains and 2B strains in the flu vaccine, the B Yamagata, which is one of the lineages of the B strains, has not been detected since COVID, really, since 2020. So we're working with the regulators to remove that component, and we're working closely with them to ensure reliability of supply. We expect the transition to take place in -- for all regulatory regions over the next 2 to 3 years, and the U.S. will transition first in 2024.
Mathieu Chevrier: Yes. And just your -- I guess, your expectations around pricing on the back of that.
Stephen Marlow: Yes. Look, the volume with the vaccine doesn't change. I mean [indiscernible] is one component of the vaccine. We do not expect to see any changes in pricing as a result of the change of the component of the vaccine, the protection remains unchanged.
Mathieu Chevrier: Okay. And maybe just another one on your Ig inventory position. And pricing outlook in the U.S. and I guess, the potential impact from the U.S. inflation Reduction Act.
Joy Linton: It's Joy here. Can you just clarify your question, please.
Mathieu Chevrier: You've mentioned about 6 months ago that you wanted to rebuild your Ig inventory position. I was just wondering how you're standing on that front. And then any sort of potential impact from the U.S. Inflation Reduction Act on your pricing ability in the U.S. going forward?
Joy Linton: I've got it. It's 2 separate questions. That's fine. So firstly, on Ig inventory, we continue to work our way through to getting to good, reliable supply, particularly in our EU market. We still have a way to go on that. We are still collecting as much plasma as we can collect, and we are selling as much plasma as well -- as much Ig as we can sell. So, that is a slow process, but a lot of effort going on in the organization to make sure that we're utilizing our inventory as efficiently as we can. So not a lot to report there. And on the second one, which is about the potential for any impact on -- from the IRA. I might hand to Andy.
Andy Schmeltz: Sure. So for the IRA specifically for our plasma-derived medicines, the components that are relevant is the maximum amount of pocket cost for patients, which has been reduced. And then, of course, the manufacturer has a little bit more of a burden here. Now the benefit of reducing the out-of-pocket costs, of course, is that if there are any patients that might not have filled a prescription because of the out-of-pocket costs are too significant, that burden should be eliminated. And so you might have more fulfillment of prescriptions, so more patient volume. And that's certainly a good thing. That being said, if there's any additional burden for us, we certainly have thought through this carefully and have incorporated into our forward plans. And just to kind of note for our Ig business, only about 10% of all patients in the U.S. that are utilizing Ig are Medicare patients right now. So it's not a significant proportion of overall business, but it's already been incorporated into our forward planning.
Mark Dehring: Thanks, Mathieu. We have a further question from Sean Laaman at Morgan Stanley.
Sean Laaman: A question on synergies with Vifor. So I think you mentioned that there's a bit of upside there, there was more than what you initially saw. I'm wondering if you can put some quantum around that.
Joy Linton: Thanks, Sean. We said at the time of acquisition $75 million run rate synergies over the first 3 years, so we're at that level now. And it's broadly not -- a pretty even mix actually between enabling functions a bit in R&D, which kind of falls into the 10% to 11%. So some of that gets repurposed rather than necessarily falling to the bottom line, which is fine. Procurement, so cost of sales, so some nice benefits in there. And then, of course, some of the sales and marketing synergies that we've delivered. And you'll start to see that come through on a run rate basis as the year continues.
Sean Laaman: Just squeeze one more in. Just the 10% average reduction in CPL across the period. Are you able to describe what the exit looks like and where we are today?
Joy Linton: The exit at the end of December is what you're asking?
Sean Laaman: Correct.
Joy Linton: Yes. 10% down on -- like yes, average year, 10%. I think there's no doubt in the last 6 months that, that rate of reduction has slowed a little, with donor fees kind of holding up perhaps a little bit more. But as we said earlier, a lot of work going on in the centers and Rika will help deliver that going forward. But donors, it's a very dynamic environment, and it moves around kind of month by month, I think is what we would say, which is why we put some average year numbers out there, Sean, actually, we think that's probably more helpful than the point to point.
Mark Dehring: Thanks, Sean. We have a further question from Andrew Goodsall at MST Marquee.
Andrew Goodsall: I hope you can hear me now. Just -- it was just a follow-up question on the Behring gross margin. Just if you eliminate for the COVID vaccine sales at previous period, where would the margin improvement year-on-year be?
Joy Linton: I'll have to take that question on notice, I think, Andrew.
Mark Dehring: Okay. Thanks, Andrew. Next question comes from David Bailey at Macquarie.
David Bailey: Yes. We've got the time line for the Rika rollout now. What are some of the factors that could drive the recovery for Behring back to Rika within 3 years? And then what are the other factors that could delay it to being cheap in fiscal '28? Just trying the moving parts to outside of Rika, what could bring that forward to '26 and what could it be in '28?
Andy Schmeltz: Yes, David, I'll try to add some color to that, kind of running through the list of levers that I mentioned in my prior response. You were working hard to move as quickly as possible, and we could have variability either way. So if you go to the leveraging technology within our centers and how we're -- the donors fees and being more purposeful in our ability to pinpoint the fees that are required. We're moving in the right direction. We think we've got -- we're getting more sophisticated with technology, so that could be an accelerator or could slow down. Certainly, we've got many elements of operational effectiveness in our centers, from scheduling to the hours that they're open, the workflow so that we're kind of minimizing the labor, but optimizing the throughput. So we're working on that. That could be a potential accelerant as well. Certainly, the promise of Rika and the rollout, the timing of nomogram I, the filing from Terumo is already in, that coming through as expected will certainly be an enhancement in terms of getting to that steady-state 10% more plasma on average. And then a little bit over time, I think Paul mentioned in his opening comments that early kind of Ig yield looks very positive from our findings. That could also be something that helps us move in the right direction. And then, of course, on the product mix, if we can really be successful with the launch of Garadacimab with the margins that, that offers and really strong growth with HIZENTRA, especially with the 50-milligram prefilled syringe that's now out there that also will be a good guide in helping us. So I think we want to reaffirm expectations on the 3- to 5-year time horizon. We've got many levers in play, but we are doing everything we can to move as quickly as possible.
David Bailey: And just in the -- just as a reminder, of the potential approval of the nomogram I and the, how quickly it will be to roll out across the other fleet once the Rika platform is in.
Andy Schmeltz: The capability for collecting a nomogram I should be once the FDA approval is there, should be relatively rapid given well it's just the line of how quickly we can get the Rika device throughout the U.S. fleet. But that's absolutely was -- is purposeful in the way that we're planning the rollout with Terumo.
Mark Dehring: Thanks, David. Next question comes from Andrew Paine at CLSA. Go ahead, Andrew.
Andrew Paine: Just back on the Rika rollout. Obviously, you've covered off the time line for this, but just want to know were there any changes to the agreement with Terumo that you're going to highlight, just thinking if there's something around price or anything like that, that we should be aware of?
Paul McKenzie: I appreciate the question, Andrew, but our contractual agreements with partners are confidential.
Andrew Paine: Okay. No problem. And then just going back to IV iron. We have been hearing more of a push back in the outpatient setting for Injectafer. But in the hospital setting or use in patient blood management that does seem a bit more positive and obviously, your focus as well. So do you think the transition here will see those near-term headwinds in the clinical setting continue? You've obviously got the step edit pressure as well. But is that something that you see also is a contributing factor to those headwinds?
Herve Gisserot: So I'm not completely sure I understand the question or maybe there are multiple questions in your question. So clearly step edits policies are a headwind in the U.S., something we have to navigate, and we believe we will do it successfully with our partner, Daiichi Sankyo. And as we said earlier, Venofer is the winner in that specific context. Outside of the U.S., we are not facing this kind of headwinds, and we have, in some countries, a very, very successful retail business, especially in countries like Germany and Switzerland so -- but maybe you can clarify a little bit your question.
Andrew Paine: Yes, yes. So just feedback we're getting in the outpatient setting to Injectafer concerns around hypophosphatemia and that's generally needing to manage and continue to assess the patient in the outpatient setting. Whereas in a hospital setting, there seems to be less concern around hypophosphatemia or anything like that.
William Mezzanotte: Yes. This is Bill Mezzanotte. Let me just comment in a moment. I don't believe there's actually any new data that drives that change. I do understand that in some outpatient settings, some sales and marketing activities might be driving some changes but not data and -- which is why I don't think you're seeing any difference in hospital setting where if there's a place you would worry more about hypophosphatemia would be in the inpatient setting. So I think we're still very supportive of the product. We keep a tab on the outpatient market as well.
Mark Dehring: Thanks, Andrew. We have one more question in the queue. After that, we'll draw the meeting to a close. And that person, Lyanne Harrison from Bank of America.
Lyanne Harrison: Just on collections. Previously, you've called out, I think, for '23, collection volumes were up 31%. Do you have a similar number for the first half of this year?
Paul McKenzie: We're back to steady-state and growing post-COVID -- we're going to fall back to -- we're going to continue to drive collections at or above our need for demand in the marketplace. So we're not, that was a COVID specific chasing those percentages. There are so many other levers we're pulling. That increases in Ig don't necessarily have to track or correlate or they don't correlate to the direct increase in plasma collection. So we're just going to go back to focusing on our growth and focusing on our initiatives and margin recovery.
Lyanne Harrison: Okay. And just one more question on Acturis 154. Can you give us an indication of when you expect first revenues from different markets? Obviously, Japan has already received approval. So when do you expect to launch and generate revenues there?
Herve Gisserot: Thanks, Lyanne. We expect to launch in Japan in 2024, so quarter 3, quarter 4 of 2024. In terms of other markets, we have submitted into Europe. So we would expect approval quarter 4 '24, quarter 1 '25, and then we will submit for the U.S. closer to the end of this calendar year. So we're approval approximately 12 months after that. So I suspect COVID's going to follow similar time lines to flu in terms of its vaccination season, so you can work up from those approvals when the product will be released into the market.
Mark Dehring: Thanks, Lyanne. Ladies and gentlemen, we have no further questions in the queue. So I'd like to thank you for your interest in CSL, and I'll now draw the meeting to a close. Thank you. Goodbye.
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