CSL Limited (CSL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the CSL Vifor briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Mark Dehring, VP, Investor Relations. Please go ahead.

Thanks, Kylie, and very good morning, everybody, and welcome to this morning's CSL Vifor investor briefing. I'm joined here with Paul Perreault and a number of CSL's senior executives. I'm sure everybody know Paul is our Chief Executive Officer. As Kylie mentioned, we will be having a briefing, but we have put aside a generous amount of time for Q&A. And with that in mind, I do ask that during Q&A to give everybody an opportunity to ask a question. As with past practice, please limit your questions to 2. If you do have a further question, you are, of course, welcome to rejoin the queue. 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 you over to Paul Perreault. Paul?

Thanks, Mark, and good morning, everyone. Thank you for joining our CSL Vifor briefing today. I'm going to start off with a strategic overview of how CSL Vifor fits into the CSL strategy. Then Paul McKenzie, our Chief Operating Officer, will highlight some of the market opportunities we see for CSL Vifor. After Paul, I'll be pleased to introduce you to Herve Gisserot, who has been appointed to lead the CSL Vifor business as General Manager. Herve joined Vifor Pharma in January 2022 as the Chief Commercial Officer and has vast experience in the pharmaceutical industry globally, including 13 years at GSK. And prior to that, held leadership roles at Sanofi and Fournier Pharma. Herve will go through the CSL Vifor portfolio in more detail and outline the key priorities and the growth drivers for CSL Vifor. Following Herve will be Dr. Bill Mezzanotte, our Head of R&D and Chief Medical Officer. Bill will cover the R&D pipeline and really provide more detail on the opportunities across both CSL and CSL Vifor. Then our CFO, Joy Linton, will provide an update on the financials, including the new segment reporting and our updated guidance for fiscal year '23, including CSL Vifor for the very first time. So there's plenty to like, in my view, with CSL Vifor, and I think that many in the audience will agree that CSL is not a habitual acquirer of companies. We take our time. We look at companies where there are capabilities, competencies and adjacencies to what we do. Companies with well-established market positions are especially attractive to us. EPS accretion or at least a path to EPS accretion goes without saying. And we are instinctively cautious so as not to stretch the balance sheet too far. And I think we've achieved all of these objectives with the acquisition of Vifor Pharma, along with a few other things. And CSL Vifor, in my view, is a unique company. It adds tremendous value and strength to CSL. It helps to accelerate our growth strategy and brings increased innovation, capability and scale. It's a durable business that will continue to provide us with profitable sustainable growth. It helps really because CSL Vifor brings a like-minded business with a similar culture and values to CSL, which is quite important as the 2030 Strategy is underpinned by our people, as you see on this slide. CSL Vifor contributes to our diverse product portfolio and our deep R&D pipeline and advances the health of those that face a range of serious medical conditions because patients and public health really do also underlie the strategy. So good starts with both the rare diseases, the area of need and the culture fitting together to underpin the strategy of CSL. We are now significantly a larger company, have a broader strategic horizon. And at the same time, we've retained our financial flexibility. At the announcement back in December last year, we said that the acquisition would be low to mid-teens NPATA per share accretive. And today, I can reaffirm that outlook. This acquisition is quite unusual. It's not often you come across a biotech company that is actually generating cash as an exciting future for growth opportunities and will continue for years to come. We now have a world-leading franchise encompassing renal disease and diseases of iron deficiency. And this brings me back to the slide on the screen. It's that strategic fit. We already had a great strategy before announcing our intention to acquire Vifor Pharma. Did we have to do the deal? I'd say probably not, but it's a great opportunity. You can see here on the slide how well CSL Vifor fits into CSL's 2030 strategy. Diseases of iron deficiency adds neatly to our strategy of achieving sustainable growth. Nephrology fits neatly into our areas of focus. And as you know, we already have clinical programs within transplant and nephrology. Elsewhere in our 2030 Strategy, we have added partnerships under the efficiency and reliable supply pillar. CSL Vifor's iron business is the jewel of the business. Yes, people have been asking me what about things like cliffs with intellectual property or loss of exclusivity. There's a lot more to this business than just viewing it as an earnings erosion story following a loss of exclusivity. FMC gives us access to the nephrologists and patients a critical element when you're developing products. And interestingly, we are already taking calls from small biotechs who have assets in this area. They are looking for a preferred partner to help them to take their products forward, and we are just that, a preferred partner for innovation. The combination of CSL and Vifor Pharma is greater than simply the sum of the parts. We will be stronger together. CSL Vifor have strong expertise in developing these partnerships with a constant cadence of deals. CSL can learn from this, but whilst we have been an -- we haven't been an acquirer of assets, we will bring continued focus and opportunities to what CSL Vifor has already established. CSL Vifor does R&D, but not quite the same way we do R&D at CSL. In the past, we have often -- Vifor Pharma has often outsourced their R&D. And I'm sure many of you who have attended our annual R&D briefing, and will have seen the approach CSL has to R&D. Bill Mezzanotte and the team will bring capabilities and experience to their R&D at CSL Vifor, but also expanding the new broader CSL Group opportunities. Some may recall when I came to the CEO seat here at CSL a decade ago, at that time, CSL was right for a step forward. When Brian and I made the transition, we talked about the need to globalize and commercialize the focus and the strategy, really making it and taking it a leap forward. CSL Vifor is in that same vein as CSL was 10 years ago. It's a relatively smaller business, doing well, generating cash, but it needs to boost. It's now time to really commercialize the strategy of CSL Vifor. Moving forward, CSL Vifor is about expansion of its commercial opportunities, leveraging the broader group of R&D opportunities. I sometimes reflect on the doubt that's been expressed at times about our acquisition of the Novartis asset from Seqirus. And whilst in hindsight, it's convenient to talk up a success story. My thinking is somewhat different here. Perfect companies typically aren't for sale. In fact, I'd say that no company that you would acquire will be perfect. And certainly, a lot of the companies are to the valuation that we would entertain. But the right strategic fit, the right people, the right focus will inevitably deliver sustainable, profitable growth and value for CSL and for our CSL shareholders. It is about that long-term sustainable growth. I'd like now to hand over to Paul McKenzie, who will talk a little bit more about the growth opportunities for CSL Vifor. Paul?

Thank you, Paul, and good morning, everyone. As Paul highlighted, CSL Vifor strengthens CSL's 2030 Strategy by adding a durable and growing business that had complementary and adjacent franchises to CSL's portfolio. CSL Vifor has leadership positions in diseases of iron deficiency, dialysis and nephrology. Our strategic goal is to unlock the full potential of CSL Vifor by building on these leadership positions and continuing to grow the product portfolio. CSL Vifor is largest franchise is its iron franchise. They have been the pioneer in the development of iron-based products and are the global leader in the treatment of iron deficiency, iron deficiency -- and iron deficiency anaemia affect many people around the world with more than 3 billion people having iron deficiency and around 1.2 billion having iron deficiency anaemia. Despite the high prevalence and potentially serious consequences, iron deficiency and iron deficiency anaemia remain underdiagnosed and undertreated. There is a high unmet medical need in this area and a significant untapped potential for CSL Vifor to continue to grow its iron franchise, and Herve will cover our strategic priorities with the on iron franchise in his presentation. The other large and growing opportunity for CSL Vifor is in renal disease. Chronic kidney disease is a leading cause of mortality and morbidity globally. In the U.S. alone, approximately 15% of all adults suffer from chronic kidney disease. It is estimated that the market size for renal disease will grow from USD 13 billion to USD 25 billion by 2026, representing a compound annual growth rate in the low double digits, driven by an aging population and increased prevalence of chronic kidney disease arising from risk factors such as diabetes and heart disease. CSL Vifor gives us the opportunity to build a significant renal franchise and become the partner of choice in this important and growing market. Chronic kidney disease is a complex and debilitating condition that affects millions of people around the world. People living with chronic kidney disease face a long and difficult journey associated with multiple and varying conditions and complications that severely impact their daily quality of life and life expectancy. Building a significant renal franchise involves supporting patients with chronic kidney disease and caring for them as they progress along their journey so that they can get the best possible treatment and maximize the quality of their lives. CSL Vifor has a strong presence in nephrology, and we are committed to growing the range of therapies to address the full spectrum of kidney disease with a focus on nondialysis, dialysis and rare disease to improve the lives of patients. CSL also has existing products and products in both commercial development and clinical development, which complement and extend CSL Vifor's portfolio. My colleague, Bill Mezzanotte will be talking to this later in his presentation. I am now pleased to hand over to Herve Gisserot, who will take you through the CSL Vifor portfolio in more detail. Herve?

Thank you, Paul, and good morning, ladies and gentlemen. It's a great pleasure to be talking to you today. It has only been a short time since we joined the CSL family, but we have been very warmly welcomed. It's an exciting time for CSL Vifor to become part of the wider CSL Group, and we are looking forward to working with our CSL colleagues to drive sustainable growth. As Paul Perreault said at the outset, one of the common values that we share is our focus on patients. Patients are at the center of a rating we do at CSL Vifor, and we are committed to supporting and improving the lives of patients in underserved therapeutic areas with significant unmet medical need. As Paul McKenzie outlined, CSL Vifor has leadership positions in iron, dialysis and nephrology. We have a very attractive portfolio with a combination of established products such as Injectafer, Ferinject, iron franchise. -- recently launched products like Korsuva in dialysis and Tavneos in nephrology rare diseases; and a pipeline of exciting new prospects and opportunities across all the 3 of our therapy areas, which Bill Mezzanotte will go into more detail later on. Starting with our iron franchise. Ferinject or Injectafer is our flagship iron product and is leading the high dose IV iron therapy segments of the market. It was launched 15 years ago. For us, it's 15 years young for reasons I will explain in a minute and has achieved global in-market sales on an annual basis of over CHF 1 billion since 2019. As Paul McKenzie mentioned, there is a large prevalence of iron deficiency and iron deficiency anaemia amongst the world's population. And the majority of iron deficiency and iron deficiency anaemia patients are yet to be diagnosed and treated with only a small portion of eligible patients currently receiving intravenous iron as exemplified on the graph for the EU5 countries. Of those that are treated Ferinject has a market share of 50% of the high dose intravenous iron segment and 29% market share of the overall iron market. More than 19 million patients, years of experience has helped to establish Ferinject, Injectafer as trusted brands with clinical benefits demonstrated by its efficacy and safety data. So despite being 15 years on the market, we still see a tremendous opportunity to really grow our iron franchise. And I will talk about some of the ways we intend to do this on the next slide. Our key strategic priorities for the iron franchise to leverage the untapped potential are: first, to maximize the penetration of Ferinject ex U.S. We will do this by expanding the market further in Europe and our geographic footprint into markets such as China, where we expect NDA approval shortly. Japan, where we launched during the pandemic and Canada, where regulatory dossier will be filed by the end of the year. We will also continue a strong focus on patient blood management and look at the potential revenue synergies in this area with CSL Behring. Patient blood management or PBM is designed to improve surgical and medical patient outcomes by preserving patients' own blood and minimizing the requirement for blood transfusions in the surgical setting. One of the 3 pillars of PBM is detection and management of iron deficiency and iron deficiency anaemia prior to surgery. It has been proven that implementing PBM, including IV iron therapy leads to better clinical outcomes. Specifically, there is evidence showing clinical and health benefits of Ferinject when used in the perioperative setting. Today, PBM is already a significant contributor to worldwide Ferinject revenues in Europe and the rest of the world. However, there remains a significant unmet medical need, acknowledged by the World Health Organization's call on Ministries of Health and policymakers to foster rapid PBM implementation. Several global leading medical societies also emphasized the importance of PBM in their updated clinical practice guidance. We intend to improve PBM service in targeted hospitals through best-in-class scientific engagement and key account management capabilities. We also support various policy initiatives in that space. Second and very importantly, we also want to maximize the penetration of Injectafer in the U.S. in close collaboration with our partner, American Regent and Daiichi Sankyo company. A great opportunity to do so is the expected U.S. label change, including heart failure. Heart failure is already a significant driver of revenue for Ferinject in Europe, in particular, but there also remains a significant increased commercial potential. Close to 1 in every 2 chronic heart failure patients has iron deficiency with a significant number of heart failure patients either not diagnosed or inadequately treated for iron deficiency. Iron deficiency is a strong, independent modifiable predictor of heart failure outcomes. A large body of evidence has demonstrated in heart failure patients that Ferinject treatment not only significantly improve function, reduce symptoms and improve quality of life, but was also associated with reduced hospitalization. The value of treating iron deficiency in heart failure patients was clearly recognized by guideline committees all over the world. We implemented recommendations to screen patients regularly for iron deficiency and to consider treatment to improve their health status. The European Society of Cardiologists heart failure guidelines implemented the strongest recommendations '21, in that, they even recommend considering ferric carboxymaltose to reduce the risk of heart failure hospitalization in patients who were recently hospitalized. In other words, the urban guidelines recognize that the data has been collected for Ferinject. And hence, Ferinject remains the only IV iron specifically mentioned. In addition, it is clearly stated that oral iron is not recommended for patients with iron deficiency and heart failure in the EASI guidelines. This gives us significant opportunities to strengthen iron deficiency diagnosis and for increased treatment with IV iron. We want to drive the same patient success story in the U.S., supported by upcoming heart failure label updates. Currently, the approved label for Injectafer is specifically for the treatment of iron deficiency anaemia, it does not allow for the promotion of iron deficiency without anaemia. In the near term, following an [ NDA ] submission by our U.S. partner, we aim for a label update, including the improvement in quality life, exercise capacity as well as reduction in hospitalization in heart failure adult patients with reduced ejection fraction and iron deficiency with or without anaemia. We anticipate an FDA decision in February 2023. If approved, this new indication will allow us to engage with heart failure specialists and highlight the important role of iron deficiency in heart failure, and Injectafer as a valuable treatment option for their patients. Another key upcoming events is the completion and readout of an important Phase III registration study led by American Regent, the Heart FID trial. The primary objective of this morbidity and mortality study is to determine the efficacy and safety of iron depletion using IV ferric carboxymaltose relative to placebo in the treatment of heart failure adult patients with reduced ejection fraction and iron deficiency with or without anaemia. The Heart FID outcome study is expected to be completed in January 2023, with the readout in the first half of the same year. Should this study be successful, it will allow our partner to submit another [ SNDA ], helping to raise awareness of the benefits of high dose IV iron treatment in this patient population and improve patient access. Finally, we intend to explore other avenues for IV iron differentiation based on Ferinject's specifics as a nano medicine, which includes advocacy and education on nano medicines across all stakeholders. As you can see, we remain confident on the ability of CSL Vifor as part of the CSL family to drive growth in the iron franchise, even though the exclusivity expires in the next few years. For IV iron products are defined by their consistent and firmly controlled manufacturing process based on decades of experience. And with the enhanced reach of CSL's geographic footprint and market access, we are confident of the longer-term growth potential of these products. CSL Vifor's other leading franchises in dialysis and nephrology are competitively positioned and empowered by our partnership with Fresenius Medical Care in the form of our joint company, which is called Vifor Fresenius Medical Care Renal Pharma. CSL Vifor owns 65% of the stake in the joint company. This partnership was forged in 2010 and has achieved global leadership in the treatment of nephrology care. The joint company harnesses the combined expertise and know-how of CSL Vifor's strong pharmaceutical expertise with FMC's leading clinical care capabilities even beyond dialysis. It's a unique business model that comes with a strong and loyal patient population. The joint company treats approximately 350,000 patients in FMC's global network of over 4,200 dialysis clinics and is the world's leading provider of products for people with chronic kidney failure. Notwithstanding the additional dialysis patient's mobility experience during the COVID-19 pandemic, we are starting to see growth returning and remain confident in the long-term growth potential of the joint company. The unique combination is a natural funnel for high-quality assets, making CSL Vifor the partner of choice in nephrology. Through our close collaboration and the sharing of ideas on a global scale through access to patient data as well as improved clinical trial design coming from real-world data, which allows a faster clinical trial execution, through the implementation of treatment algorithms based on medical evidence, which can accelerate changes in medical practices and improve patient outcomes and through our commitment to bring more innovation to patients. Turning to the next slide. Here, you can see the products from our dialysis and nephrology franchises that are sold through the joint company. Noting that the joint company has wide for nephrology only for iron products globally. On the left-hand side of the slide is the percentage of sales for each therapy group that was generated via the joint company in full year '22 for Vifor Pharma. For dialysis, it was 75%, nephrology 15% and iron 20%. In total, the percentage of Vifor Pharma sales generated with the joint company in full year 2020 was about 40%. On the next slide, I would like to talk about an exciting product that we have launched this year in the dialysis market, which is Korsuva. Korsuva, which was developed by our partner Cara Therapeutics is the first and only approved therapy for the treatment of moderate to severe pruritus associated with chronic kidney disease in adults undergoing hemodialysis. Kidney associated with pruritus is an itching condition that impacts up to 40% of this patient population around the world. It is associated with poor quality of life, reduced social interactions and depression. I've had the opportunity to listen to patients suffering from CKD associated itching. Some said, it's like having their body on fire. They feel like they are a human torch that they're itching is inside their body and cannot be reached. In other words, it makes their already very challenging quality of life as CKD patients, even more miserable with also an impact on the family caregiver. With Korsuva, we bring an approved solution to their conditions for the first time. korsuva was approved in the U.S. in 2021 and launched in April of this year. Korsuva was also granted separate funding with transitional drug add-on payment adjustment, the so-called TDAPA for a period of 2 years, which supports the timely patient access. We have a strong focus to delivering this innovative treatment to the patients in need and maximize its uptake. To this end, we have signed agreements to supply major dialysis players, including Fresenius Kidney Care and DaVita. We are also in the process of actively pursuing policy initiatives focused on improving the future asset for Korsuva to secure long-term patients and CSL value for this innovative medic. So far, we are hearing very encouraging patient testimonials of the clinical benefit of Korsuva. In Europe, Korsuva is marketed as Kapruvia and was approved in April 2022. Launches are underway in Europe, starting with Germany and Austria. We expect a few more countries to launch Kapruvia this year with the majority of countries launching in 2023. Turning to nephrology, which is a large and expanding market. We are building out our capability, which gives us significant growth opportunity. Firstly is Tavneos. This is first-in-class treatments indicated for 2 major types of ANCA associated vasculitis, or AAV. AAV is a rare systemic disease in which overactivation of the complement pathway activates neutrophils leading to inflammation and disruption of blood vessels. Many patients with AAV faced an unbearable burden of problems brought on by the disease itself or the consequences of the disease. We are very confident that Tavneos will become part of the new standard of care, allowing the patients to achieve remission while reducing exposure to glucocorticoids. This will support better outcomes for patients and a better quality of life by reducing the challenging side effects of glucocorticoids. We just launched Tavneos in Germany and Austria earlier this year, and more recently, in Great Britain and Japan with many more launches planned over the next 12 to 24 months, as you can see on the slide. Moving on to the next product, Veltassa. Veltassa is indicated for the treatment of hyperkalemia or elevated levels of potassium in the blood in chronic kidney disease and chronic heart failure patients. In patients with acute hyperkalemia, Veltassa can be used to manage potassium after emergency treatment for life threatening hyperkalemia. Beyond the acute setting, Veltassa can be used to manage chronic hyperkalemia permitting them to stay on optimal doses of lifesaving as the medication. Performance in the U.S. has been challenging in a competitive market landscape. However, U.S. payer coverage is continuously improving with nearly 70 million patients gained through new payer contracts since the beginning of the year. In addition, we have secured an agreement with Humana recently. Veltassa will be the only product on the Humana formularies starting January 2023. We are confident on future growth driven by better access to new patients in the U.S. In addition, we are planning to launch Veltassa in France in 2023. France is a promising market for hyperkalemia treatment as it represents 25% of global potassium binder use. The third product on this slide is Sparsentan, which is in Phase III development for the treatment of IgA nephropathy or IgAN and Focal Segmental Glomerulosclerosis, FSGS, 2 rare kidney disorders where no effective or approved therapy exist. While our partner Travere has just announced that they expect a 3-month extension of the PDUFA target action date for IgAN following interaction with the U.S. FDA, our confidence in this product remains unchanged. If approved in the 2 indications, we will be targeting European launches in 2024. In summary, at CSL Vifor, we are very, very excited about the future sales growth potential in our portfolio. We expect greater than 10% revenue growth for CSL Vifor into the medium-term. The key drivers of this growth are in iron, if approved, the new heart failure indication for Injectafer in the U.S., which is expected to boost sales from 2023, and we will look to maximize the full potential of Ferinject in Europe and the rest of the world, leveraging the capabilities and the geographic footprint of the broader CSL Group. For dialysis, we believe Korsuva will be a key driver of growth and we'll be focusing on the commercial uptake in both the U.S. and Europe. For Erythropoiesis-Stimulating Agent or ESA products, we expect increasing U.S. share following a recent agreement signed with DaVita, which will be effective by year-end. We also expect a normalization in the mortality rate of dialysis patients that have -- that we have seen in recent times due to COVID-19. And last but not least, on nephrology, we expect Veltassa growth to accelerate driven by better access in the U.S. market and the upcoming launch in France. And for Tavneos, we expect a solid uptake as we launch in multiple countries over the coming 12 to 24 months before bringing Sparsentan, our second rare disease medicine to patients. I am confident the commercial opportunities we see will be greater now that we are part of the CSL family, and I'm excited to be leading this business. I would like now to hand to Bill Mezzanotte.

Thank you, Herve. And may I offer you a public welcome to CSL. I'm looking forward to working closely with you to maximize the value of CSL Vifor just as I do with Steve Marlow of CSL Seqirus; and Bill Campbell of CSL Behring. In the next 2 slides, I would like to take a portfolio perspective of the ideas previously presented by Paul McKenzie and Herve. I also want to expand on Paul Perreault's earlier comments about blending the capabilities, experience, focus and opportunities across the legacy organizations to build an even stronger CSL portfolio. While I will touch on these points as well as some of the products today, I invite all of you to join me in early November for our annual R&D Day, where the R&D team will have an opportunity to delve more deeply into many of these assets. Next slide. Herve presented this slide earlier and touched on many of the end-market products supporting CSL Vifor's 3 target therapy areas. I'd like to add some color regarding CSL Vifor's pipeline as well as how CSL Behring's interesting capabilities dovetail into these areas. Let me start with the iron access. As Herve mentioned, a large body of evidence has been generated in patients with heart failure, showing that Ferinject treatment not only reduces symptoms and improves quality of life and is also associated with reduced hospitalization. These data have led the European Society of Cardiologists heart failure guidelines to recommend considering ferric carboxymaltose to reduce the risk of recurrent hospitalizations for heart failure. However, more and more health authorities and payers are looking for clinical outcome studies to prove benefit. So the ongoing heart failure and iron deficiency trial or Heart FID trial is an important additional outcome study that aims to further cement the clinical benefit to patients with heart failure and iron deficiency derived from Ferinject. Data readout from this important trial are due in the first half of 2023, with a filing in the U.S. and other parts of the world to follow. Beyond this exciting trial, we plan to bring the full capabilities of CSL to help accelerate or maximize the other opportunities in iron that Herve has described. In the middle of this slide, patients who are dialysis dependent. Let me make 2 key points. First, these patients have a 5-year survival of only about 50%, which is substantially worse than many cancers. For me, no statement more aptly explains why the acquisition of Vifor blends so nicely into our core purpose to improve the lives of patients with rare and serious diseases. And one of the major causes of morbidity and mortality in dialysis-dependent patients are cardiovascular complications. Very soon, CSL will be initiating a Phase II trial looking to reduce major adverse cardiovascular events or MACE in dialysis-dependent patients utilizing our anti-IL-6 compound clazakizumab. Importantly, we plan to employ a number of dialysis centers in the Fresenius network in the execution of this clinical trial. A rare cause of morbidity and mortality in dialysis-dependent patients is a condition called calciphylaxis, where small blood vessels throughout the skin and fat are seeded with calcium leading to excruciating pain, diffuse nonhealing skin ulcers and septic complications. And this rare condition is associated with an approximate 50% 1-year mortality. SNF472 blocks hydroxyapatite crystals, blocking this systemic calcification. Phase II data were very positive, and we expect Phase III data in the early part of 2023. And in the nephrology access, Herve has already mentioned the dual endothelin and angiotensin 2 antagonist sparsentan for IgA nephropathy and FSGS that we are very excited about. And INS-3001 is a subcutaneous calcification inhibitor similar to SNF472, but can be used in patients with CKD not on dialysis. In addition, CSL Behring has ongoing programs using CSL346 to slow the progression of diabetic kidney disease, and we are also exploring the safety and efficacy of clazakizumab to prevent antibody-mediated rejection in patients who have received a kidney transplantation. Next slide. Paul McKenzie showed the slides picking the journey of patients with kidney disease might undergo. Now I add the in-market and pipeline therapies that the CSL Enterprise has to help practitioners manage the complications and improve the outcomes in these patients. Focusing on the pipeline, the combined CSL portfolio already target some of the morbidities and opportunities present along this disease continuum. Those assets outlined and products in blue are products from CSL Vifor. All those outlined in red are CSL Behring assets. Starting with prevention or slowing of kidney damage. We and sparsentan in Phase III CSL346 completing Phase II and a number of earlier-stage immunology products with the benefit of combating diseases that also impact the kidney. In the chronic kidney disease space, I already mentioned INS-3001 that is currently in Phase I. And we and CSL and myself, in particular, have spoken many times over the past few years about our 18,000-plus patient Phase III study, evaluating the efficacy of CSL112 and in patients who have recently suffered a heart attack. That study is progressing well. But what may not be well appreciated is that approximately 25% of the patients enrolled in that study have evidence of chronic kidney disease. For dialysis patients, SNF472 for calcification is completing Phase III, and we anticipate results early in 2023. And the study of CSL300 clazakizumab in patients on dialysis, as I mentioned, is starting Phase II. And finally, CSL300 is also being evaluated in Phase III for the treatment of antibody-mediated rejection in patients who have received a kidney transplantation. So this is a great start, but only a start. And we look forward to future opportunities where we either discover ourselves or leverage through partnerships, new therapies. This will include utilizing the expertise of Fresenius Medical Care, all in the service of expanding treatment opportunities for patients suffering with renal disease, diseases that affect the kidney and for patients who have the hope of cure through renal transplantation. Now it's my pleasure to turn the mic over to Joy Linton. Joy?

Thank you, Bill, and good morning, everyone. So now we come to the financials. Since our results presentation in mid-August, having just completed the acquisition of Vifor Pharma, we've made a great deal of progress with our purchase price accounting activities. This work is required by the business combination accounting standard AASB 3 and seeks to assign a fair value to all of the assets and liabilities of the acquired entity. The primary focus of the work over the past 2 months has been on fair valuing items that may impact FY '23 net profit after tax. The work is subject to audit and finalization over the course of this financial year? There remains some work to be done, such as our liabilities and the determination and allocation of goodwill, and we're working to have this completed by our first half results announcement in February. But today, we can share with you our view on the combined group outlook for FY '23. Firstly, however, I would like to take you through how we will be reporting our group results including those of CSL Vifor going forward. So turning to Slide 22. Our new segment reporting reflects the way the Chief Executive Officer, who is also the Chief Operating Decision-Maker, monitors and assesses business performance in order to make decisions about resource allocation in accordance with the accounting standards, specifically AASB 8. This new segment note restated for the years ending 30 June 2021 and 30 June 2022 is included as an appendix to this presentation for your information. We have rebranded our business divisions into CSL Behring, CSL Seqirus and CSL Vifor. Segment operating results shows gross profit less sales and marketing expenses as managed by the business units. We have also centralized the management and reporting of research and development reflecting the portfolio approach we are now taking to our R&D investments and general and admin costs following the work over the past few years to bring together our enabling functions in a single global structure. R&D and G&A expenses are, therefore, no longer allocated to individual segments. A new line has been introduced NPATA, which is the statutory net profit after tax before impairment and amortization of acquired intellectual property as well as one-off business acquisition and integration costs and other acquisition accounting-related adjustments. The segment note also shows the statutory NPAT and NPATA attributable to CSL equity holders and that attributable to the noncontrolling interest. As you know, part of CSL Vifor's business includes the majority-owned joint company, Vifor Fresenius Medical Care Renal Pharma. As CSL Vifor controls the joint company, 100% of the result is consolidated into the financials. The earnings are then attributed according to the ownership structure of the joint company's earnings. 55% in favor of CSL Vifor and 45% in favor of the noncontrolling interest. Both earnings per share by NPAT and NPATA are provided in this manner. Going forward, we intend to use NPATA attributable to CSL shareholders to provide financial guidance for the CSL Group. We believe that adjusting for the amortization of acquired intellectual property is a better measure of the underlying growth of the company. Finally, you will notice the absence of Vifor financials in the segment note. Given the deal did not close until the 9th of August this year, they will not appear in historical numbers when we first report in this format at the interim results announcement in February next year. However, I do recognize investors may want to model CSL with the inclusion of Vifor numbers realigned to the CSL financial year-end. And to that end, I provided the key historical Vifor numbers separately, which we'll discuss on the next slide. So on Slide 23, we see the key CSL Vifor historical pro forma unaudited financials realigned to CSL's financial year-end, including the 3 main revenue segments of iron, dialysis and nephrology, followed by gross profit, sales and marketing and the segment results, all in our new reporting format. The split of revenue by region is quite similar to that of the CSL Group with 53% of revenue derived in the U.S. and 34% in the U.K. and Europe. I'd like to take a few moments to walk you through the P&L items between CSL Vifor segment results and CSL Vifor's net profit after tax. Going forward, of course, we will only be reporting CSL Vifor to the segment result line, but I felt it was important that investors have a clear understanding of the reconciling items between the 2 numbers. So for fiscal '23, investors should consider: firstly, we have revenue and earnings for 11 months rather than a full year. Just like to reiterate that point, it is 11 months, not the full year. We then take amortization of acquired intellectual property. As you know, CSL expenses R&D as it's incurred, but when IP is acquired as it is in this case, we simply expense the cost of this intangible asset over the projected life of the assets. Both commercial and pipeline IP have been assessed and we have determined that all of the assets of CSL Vifor have a finite life, ranging from 10 to 40 years. And indicatively, in FY '23, this is expected to be around $140 million to $170 million post tax. In terms of R&D, group guidance remains unchanged at 10% to 11% of revenue, noting that between the segments, this may vary year-to-year depending on the programs underway. For G&A, CSL Vifor's spend on G&A is comparable to the broader group at about 7% to 8% of revenue. And lastly, CSL Vifor's effective tax for FY '23 is expected to be circa 15%. And this brings us to net profit after tax. Adjusting for the 45% attributable to the noncontrolling interest, the FY '23 net profit after tax for CSL Vifor is expected to be approximately $300 million to $330 million for the 11 months. And this is represented on the next slide, Slide 24. Starting at the top, our previous guidance for the company, that is CSL Behring and CSL Seqirus was for a net profit after tax of $2.4 billion to $2.5 billion at constant currency for FY '23. This component of the guidance remains unchanged. Who knows what will happen to exchange rates, but I do note that if the FX rates as of the end of September, held for the balance of the financial year. All else being equal, we would have a circa $200 million headwind at NPAT, primarily reflecting the non-U.S. dollar-denominated revenue in our CSL Behring business. The next slide, being our expectation for CSL Vifor of between $300 million to $330 million for the 11 months, as discussed on the previous slide from which we then deduct the net incremental cost of debt attributable to the acquisition. In broad terms, this debt is made up of $4 billion raised earlier in the year through the 144A process in the U.S. at an average rate of 4.14%. Also, an additional $2.5 billion of bank lines was drawn down on completion of the acquisition currently at a floating rate of circa 4%, up from about 2.5% assumed when we first announced the acquisition. And now with the focus on NPATA, we then adjust for the amortization of acquired intellectual property. And this brings us to an NPATA outlook for FY '23 of approximately $2.7 billion to $2.8 billion, representing a growth on FY '22 NPATA of between 13% and 18%. I note the above guidance excludes the one-off acquisition costs related to the noncash revaluation of acquired inventory as well as the one-off transaction and integration costs, which remain consistent with our prior expectations of about $200 million in total. I am also pleased to reaffirm commentary we made almost a year ago when we first announced our intention to acquire Vifor Pharma. We remain on track to deliver circa $75 million of cost synergies over 3 years. We also foreshadowed a low to mid-teens NPATA per share accretion in the first full year of CSL ownership, including the full run rate of cost synergies and notwithstanding the recent increase in the cost of debt, we expect this statement to be true for FY '23. And with that, I'll now hand back to Paul Perreault for some concluding comments.

Well, thank you, Joy. Well, that was pretty comprehensive over the last hour or so, I have to say. But -- let me just make a few comments to try to bring back some of the key items. And before I get to the key value catalyst on this slide, just a couple of other comments that I'd like to make. I talked about the fact that it's hard to find a business that's perfect if you're doing an acquisition. But I have to say, I think Vifor Pharma is the perfect fit for CSL. So when we take a look at the various areas of the company that you've just heard about, it fits really nicely with the strategy that we put into place. I think there are enormous opportunities to really grow the iron franchise, as you heard from Herve to drive new indications, expand into new geographies and improve access. He talked about heart failure, which is a significant opportunity for the iron business. And on the commercial front, CSL Vifor is only in about 20 countries, and they haven't launched every product in 20 countries, just like CSL Behring is in 102 countries, and we don't have all products there. There's plenty of room for growth and expansion to service patients in many countries around the globe. And I talked about the fact that the -- that everybody wants to hang on the loss of exclusivity. And we will be involved in this therapy for a long time to come. I thought plasma manufacturing was hard and people asked me, well, how does this fit with kind of the plasma business. Clearly, operationally, there's a lot of complexity to what Vifor Pharma does. Iron is actually harder. When I say hard, it's hard as a rock. And many of you know iron ore in this country, and it does start with iron ore when we manufacture iron. I've been to St. Gallen, it is a very difficult process, starting with iron ore and powder, cranes that take the iron powder, put it in and you start with purification and hydrochloric acid. It's not that other people can't make it, but it is complicated. And as Herve pointed out, this nano medicine is unique mixture of the different areas of iron that are controlled in Ferinject and Injectafer are just unbelievable. So we feel we have some really great opportunities to look at this complex compound and continue to sell iron for many years to come across the globe. So I think today, certainly, iron is today's jewel in the crown. And for tomorrow, we're adding a new tool and that's really in nephrology. That's tomorrow's jewel that will be added on to the crown jewels of the company. The sheer incidence of the disease and the opportunities available are huge, really big opportunities for us to have an impact in a positive way on patients. Nephrology encompasses a whole range of diseases and therapies needed to treat them. I think both Herve and Dr. Bill talked about that during their presentations. And the fact that a patient doesn't typically start with dialysis, there's a progression of disease. 15%, I think Paul had on his slide, of the U.S. population. And I'm talking about the older population. So if you take the 40 years and older population in the U.S., you're talking about a potential market need of almost 25 million people in the U.S. alone. So there's a lot to do and a lot to like about the durability of this business in terms of where we can help patients. So all in all, I'd say that the dialysis space is interesting, not many pharmaceuticals or companies who are in this space, the joint company that we have with FMC gives us that access to the nephrologists, the patients which is really a critical element when you're developing products. So that's just a few general comments to kind of wrap up some of the key items, but let me talk about some of these key value catalysts that we have in the business. In the near-term, we expect that Injectafer change in label to reflect that heart failure to come. We have a program of launches in dialysis and nephrology that includes Korsuva and Kapruvia, Tavneos and Sparsentan in the Phase III readout of SNF472 in CUA. In the midterm, we have another readout of our expected SNF472 this time for peripheral arterial disease in end-stage kidney disease patients, and we will maximize Ferinject ex U.S. We're really looking forward to the FDA decision on Injectafer in the U.S. for heart failure based on the Heart FID trial outcome. We will be leveraging our relationships with the joint company to accelerate changes in medical practice. And over the long-term, we'll be focused on leveraging both the joint company and the CSL relationships to bring innovative products into the pipeline. Overlaid on these catalysts are the strengths that CSL bring to CSL Vifor, our scale, our focus and the discipline that we bring, not only every day to the company, but especially when we do an acquisition. In the near term, business continuity remains our top priority. As we work through the integration process, we will focus on implementing our cost synergies, which we're on track for and that we flagged when we announced the acquisition. Remember, this isn't a synergy deal actually. I mean, $75 million in synergies over 3 years is not what you would expect most pharma companies to be talking about when they do a $12 billion acquisition. So this is about the future focus of the company that we're really excited about. But we will get those synergies, and we are on track. We will also be focused on leveraging CSL's extensive distribution network to launch CSL Vifor products into new geographies and indications as well as expand CSL Vifor's commercial opportunities over the near to midterm. And over the longer term, a key strategic priority will be to maximize the value of the existing partnerships such as the joint company with Fresenius Medical Care and leveraging CSL's R&D capabilities to continue to deliver innovative medicines to meet patients' needs. So on the last slide, let me just finish by reiterating what I said at the beginning. CSL Vifor accelerates our strategy to create value, deepens our patient focus and the ability to protect the health of patients through an expanded portfolio of medicines and a broader pipeline. Today, CSL Vifor has leadership positions in iron, dialysis, nephrology, and we see tremendous opportunity to maximize the value of these franchises and drive profitable, sustainable growth and we expect to deliver greater than 10% revenue growth over the midterm. Finally, for CSL Group guidance for fiscal year '23, including CSL Vifor, we expect revenue growth to be in the range of 28% to 30% at constant currency, with NPATA expected to be approximately in the range of $2.7 billion to $2.8 billion at constant currency. And as Joy said, it's a growth of between 13% to 18%. With this change to NPATA, we will also be aligning management incentives with NPATA going forward. And lastly, CSL Vifor is expected to provide low- to mid-teens NPATA per share accretion in fiscal year '23 and into the midterm. With that, I thank you for your interest and your attention, and we'll be happy now to take some questions. Mark?

Terrific. Thank you, Paul. [Operator Instructions] Our first question comes from Andrew Goodsall at MST Marquee.

You have talked to the 10% top line, but you haven't talked to margin, and I know previous before management had a long-term margin expansion target of greater than 1,500 basis points. Just wondering if you could talk to where you think margins can go?

Thanks, Andrew, for your questions. So when we talk margins going forward, we will be talking at the segment level for CSL Vifor. And clearly, the margins on the Ferinject product being the margin -- being the owned product are fairly strong. And I hope you've heard today that we see good growth in that business. So we would expect some margin expansion from that. I think we're a little bit thoughtful just to see how each of the various products play out over time. So we're not going to come out and predict a big margin expansion over time, but that's certainly the general direction.

Okay. And a follow-up, it could be for Paul McKenzie, just talking about the doubling of the renal disease opportunity. Just wondering how you reconcile that with the medical capacity, whether there's actually the capacity to expand that aggressively and appreciate that some of that growth is going to be outside of the dials setting or the fixed -- or yes, just going to leave that one with you if you could talk to it.

Great. Thanks, Andrew, for the question and I'll also ask Herve to weigh in. But as you said, there is definitely space in that market for growth. And as you said, there will be both additions in the dialysis space as well as in other avenues of health care for the patients to be satisfied. So I'd ask Herve to add a few comments in any particular markets that he'd want to highlight.

So yes, we are...

Looking for the opportunity of the marketplace for this increase in the need for dialysis and iron and the treatment in the nephrology area, both in dialysis and outside of dialysis.

So we obviously see with the aging population and lifestyle issues like diabetes or heart failure a growing need to support CKD patients along the journey. It will indeed in the end translate into more patients receiving dialysis. After the slight dip we have experienced through COVID, but we expect the number of dialysis patients to return to normal gradually and start going again, let's say, low single digits in the years to come. We believe that in the U.S. but also across the rest of -- across the world, we can leverage really our joint company to really best support this pool of patients, make sure they get best care and receive the innovative medicine CSL Vifor has in the current portfolio or plan to bring going forward. So in addition to maximizing iron, we really believe that this renal/dialysis franchise will be a major growth engine for us in the many years to come.

I think, Andrew, the capacity to treat these patients is certainly there. I think there's plenty of opportunity for their health care system to absorb. And by the way, there's a lot of innovation looked at in this space, even FMC and others, they're looking at home dialysis treatments, looking at ways to get better access to dialysis for patients outside of the dialysis centers themselves. And that new way of caring for patients is something that certainly those that are in the dialysis space right now are looking at how can they participate and help to optimize the area because everybody is looking to move out of some of these centers and try to do it more conveniently but also more individually. And Bill, I don't know if you have any comments on the treatment because I think what Andrew was asking is the capacity to treat the new growth in this area.

Yes. I would just say no nephrologist only focuses in dialysis. They both look both ways, either earlier to prevent kidney disease or manage CKD or later to take care of patients who have had transplantation. So I think there's plenty of capacity. What we don't have is enough good medicines.

Comes from Sean Laaman at Morgan Stanley.

I'd like to ask about Veltassa and its performance. And clearly, over the last few years, at least the last little while Lokelma has been doing better, but our research suggests that there could be quite a competitive advantage when you're talking to cardiologists with Veltassa in your pocket. In so far as it sucks up the potassium iron and spits up calcium versus Lokelma doing sodium. So I'm wondering if that is a meaningful advantage. So as you create more into the cardiology space as opposed to talking to nephrologists, that's one area where you could drive market share? And is that going to be synergistic with revenues, particularly if you get Injectafer approved in heart failure?

Yes. Thanks. This question is very close to my heart since I joined Vifor earlier in the year, I really looked at Veltassa in the U.S., in particular, where to be completely transparent, the performance has not been completely in line with our expectations in recent years. After really understanding the root cause, we have really implemented corrective action plan, and we have made excellent progress since the beginning of the year in particular in terms of gaining more access both commercialized and Medicare in the U.S. We were able to gain 70 million additional lives plus, as I said during my remarks, we just signed an agreement with Humana, which will give us really exclusive position on their formulary from January 2023 onwards. So it will be all about pulling through now, leveraging really the competitive profile of Veltassa versus Lokelma. We have very strong data, as you said, based on the DIAMOND study, suggesting that for chronic use, Veltassa is extremely well positioned to ensure that patients receive optimal RAASi Enabling treatment. Veltassa is also sodium-free, which is clearly another competitive advantage. So after unlocking access, we are focusing now on really the commercial fundamentals, the quality of our scientific engagement to make sure that we accelerate the growth of Veltassa, which is really very significant. And I really believe that CSL brings with this cardiorenal portfolio really also fantastic opportunity going forward, and we can really synergize in that regard. That's for the U.S. Ex U.S., we have been quite successful in many European markets where we continue this head-to-head competition with Lokelma, but there are also many more established products still being widely used representing a potential for further growth. And we are launching in France, 1 of the largest K binder markets in the world, and we are in Phase III in Japan with an expected launch in the '25 time frame. So I think the Veltassa has a bright future with a lot of potential for further growth, and it will certainly be at the heart of our strategy in this cardiorenal space.

And maybe I'll just add a couple of things, Herve, to your answer. And it's an excellent mechanistic question that I think deserves a little bit more of a scientific story we'll be interrogating the DIAMOND results to look for things, but it's also begs for real-world evidence kind of approach, and we may need a little more time to get those approaches and the type of evidence that you're suggesting mechanistically, but we'll look.

Great. I have one more follow-up, just on the reported results to date. So the iron franchise has grown really, really strongly in fiscal '22 and hasn't followed the trend we've observed in dialysis, which was expected according to our primary research. But is this suggesting the iron franchise is growing out of the dialysis space and you're seeing better uptake in areas such as patient blood management?

So we -- I mean, we see many, many, many opportunities to maximize the iron franchise going forward. And if we talk specifically about Injectafer -- Ferinject, the main focus because there are so many opportunities that we have to be extremely focused and disciplined in the way we try to look at this kind of potential. So the top priority is patient bed management, heart failure, where we want to continue to maximize this opportunity in Europe and we want to launch heart failure in the U.S. early 2023. Geographic expansion is a critical priority, especially in China, where we expect the approval at some point in time very soon now, probably in the coming days or weeks. We are in close conversation with our colleagues from CSL Behring to see what we can do together, especially in countries like China or to support indications like patient blood management. But there are many other opportunities like women health, including the fatigue segment, which could represent a fantastic driver of growth, especially in emerging markets in the many years to come. So we really believe, as Paul said, that we can continue to grow this iron franchise with Ferinject/Injectafer at the heart of it for the many years to come. And even if we face follow-on competition at some point, we really believe that the market potential is so high that we can continue to deliver growth.

And if you talk about the patient blood management section, we're kind of used to trying to convince skeptical or critical health authorities, payers and governments as the value of our medications. But here, the blood transfusion is not necessarily a benign occurrence. And so we're actually working with the tailwind there of what governments and the health authorities would like to see. And so I think when we generate the data, there will be a very receptive audience to what the data we do generate.

Next question comes from Chris Cooper at Goldman Sachs.

So just maybe a follow-up to one of Sean's questions there. So the sort of segmental disclosure on Slide 23. So when we look at the different franchises. Now clearly, '21 and '22 are not going to be representative years on any level, but the only one that to look up close to the overall sort of divisional sales guidance of 10% plus is iron. Can I just confirm, is it the expectation that the dialysis, nephrology and the other segment, they move towards or above that 10% level over the medium term? Or is it that the sort of positivity you have around the additional upside of the iron franchise, it's going to be that, that does the heavy lifting and the other segments are going to be perhaps tracking below that 10% level. Can you just clarify that?

Thanks, Chris, for your question. So we see this 10% plus growth across all 3 of the therapy areas. And you've got to remember, KORSUVA is the new product. So in '22, we're seeing some nice growth from KORSUVA, which wasn't there previously. So yes, no, across all 3 areas, we see that sort of growth.

Okay. And just if I sort of think back to December when you first announced the deal, you have the slide there with the pre-commercial opportunities, which -- many of which you talked about today, of course. But I just wanted to get a sort of update. So first of all, I mean, [ in fact, is that ] no mention about a tool today. Can I just confirm that, that is now -- that that's no longer going to be moving forward after the CRO you received in February? Or do you need to wait and see what happens with the taxed drug before you make the final decision there? And then just on KORSUVA and TAVNEOS, it sounds like everybody is in line with expectations. Are you in a position to sort of reconfirm the sales targets that Vifor themselves have put out for those 2 drugs?

Yes. Let me touch on Vadadustat and then I'll turn it over to Herve for TAVNEOS and KORSUVA sales. Right now, we're awaiting some further response from Akebia, and we haven't written it off completely yet. Obviously, GSK has another product in that area, and we're watching with interest their approach. The data in the dialysis segment was even for Vadadustat was stronger than it was in the nondialysis space. So there may still be a path forward for that product. But we have to wait and see a little bit.

So maybe commenting on TAVNEOS and KORSUVA. For TAVNEOS, we are up to a great start in the countries where we have launched, Germany and Japan, in particular. In Japan with our partner Kissei. In fact, if you look at our performance per million inhabitants, we're tracking ahead of the TAVNEOS launch in the U.S. from ChemoCentryx. So that's very, very encouraging. And we have a very large wave of launch countries down the line, as I highlighted in my remarks. So TAVNEOS really addressed an unmet medical need, and the initial trajectory is very promising in that regard. So KORSUVA is -- I'm very passionate about KORSUVA. I really believe that we can change the life of CKD patients on hemodialysis with this product because itching really makes their life absolutely miserable. The dynamic of this market segment is very interesting in particular in the U.S. in the sense that it's not the traditional pharma market where you promote and then you see a relatively linear ramp up here, you have to partner very closely with the providers, and many things are also driven top-down based on medical and financial considerations. That's what makes our partnership with Fresenius Medical Care so powerful because we have the ability to gather real-world evidence on an ongoing basis, adjust algorithms and make sure we can drive the change in medical practices. The problem with CKD-associated pruritus is that there was no treatment. And as a consequence, there was under diagnosis and under treatment. So now we have this major task of convincing doctors and nurses to systematically screen and make sure that the appropriate patients, probably about 30%, 35% of the total pool of patients get KORSUVA for their severe-to-moderate itching. So we see now for a few weeks a major acceleration of the KORSUVA ramp up in the U.S. We believe it will have primarily in the Fresenius clinic, but also across other providers. We believe that it will have a very positive halo effect and we will see this acceleration. In parallel, we are launching -- we have just launched in Germany, where the initial feedback, qualitative at this point in time because the product was launched early October is extremely encouraging in line with the patient testimonials we have received from the U.S. So this is a major growth driver because we do address a very clear unmet medical need with KORSUVA and Kapruvia.

Next question comes from Lyanne Harrison at Bank of America.

I might start with a bigger picture and talk about -- I'll ask about the in-licensing arrangement. So obviously, a few therapies there under that sort of arrangement. Can you talk about what's CSL Vifor strategy under CSL ownership with respect to in-licensing in the longer term? And can we expect Vifor to move away more heavily and develop a fuller portfolio in-house using R&D capabilities from CSL?

So thanks, Lyanne. Thanks for the question. Look, as I said, CSL Vifor has, in the past, when it was Vifor Pharma, done a lot of licensing and licensing acquisitions to try to build the portfolio of business. And as usual, what I want to do is focus. I want to make sure that the strategy is a focus strategy that we understand deeply all of the relationships, the arrangements that are in place and that we optimize what we can in all of those and add value. Because I think there is value we can add with the CSL portfolio with a joint company with Fresenius as well as some of the other relationships that we have, the development line that Dr. Bill talked about. We have opportunities here to really change some of the R&D focus that we see in the portfolio, working with partners and separately with our own assets that we have currently in the CSL portfolio to bring to the CSL Vifor group. So when we take a look at that, and we've done the same, by the way, with other things, right? So when you think about the work that we did to manufacture the AstraZeneca vaccine for COVID here in Australia, we utilized CSL resources -- CSL Behring resources with CSL Seqirus to actually utilize the best knowledge that we had in cell culture development and cell-based therapies to actually get that product delivered to the Australian and South Asian population. So there's been this idea here that we've been moving to, which Bill has done this year, which we combine the whole portfolio from an R&D perspective underneath Bill. So that he and I both have visibility over the assets of CSL. It's the enterprise that really will drive our future. So being part of that enterprise-wide strategy, we won't be running it as a separate company per se. It's a division of the business for sure that's focused in a completely unique area, especially the iron and nephrology space. But it's all part of the CSL family. And that really is part of how we're going to approach the opportunities. Will we do more licensing? Probably, but it has to be the right thing as usual for CSL. It's not a take-all-comer strategy. We will evaluate where it fits into that continuum of care for patients that are undergoing CKD, so chronic kidney disease, and where in that life cycle, we can impact, hopefully, and slow down or prevent some of the diseases that could occur later. And we'll be open to opportunities as we always are because there's always -- we don't have our head in the sand. But by the same token, you won't see us waiving from our strategy too much. It is, as I mentioned at the very beginning about competencies, capabilities and adjacencies to what we do. We try not to get entertained with things outside of that. So I wouldn't say we'll be on the same cadence and metrics that Vifor Pharma had, which they had a cadence and some metrics around the number of deals each year they were trying to get done. That's not how we run the business here, but it doesn't mean we won't do something else as time moves through.

Okay. And just one other question, again, a bigger picture question. Behring and Seqirus have been very successful at growing fast at the market. Can we expect similar to be for particularly in the nephrology market. I know that broadly, you're talking about greater than 10% over the medium term. But obviously, a great opportunity there in nephrology.

Look, I think so, Lyanne. When I look at our portfolio and what we have, we are the company that really has the broadest portfolio within that space. There aren't a lot of players in this space, which it's been a bit unloved and underserved, and that's one of the things I loved about the business because we like areas that people don't find as attractive. When you're in a big market like oncology or immuno-oncology, there's a lot of rabbits but there's a lot of hunters, right? And so we just have to make sure that we're in the right spot at the right time here. I think we're exactly there. And as I said, this is the commercialization that the Vifor Pharma strategy underneath CSL's focus and determination to make sure that we deliver for shareholders like we've done in our previous acquisitions, and that's what we're here to do. And I've faster than the market, music to my ears because that's what we try to do. We try to be the leaders in anything that we do. And we've been fairly successful, but we can't just sit on that. You all will have to watch us. And hopefully, you'll see the same thing you've seen in the other acquisitions that we've done.

Next question comes from David Stanton at Jefferies.

I guess to follow up on a previous question, you've got these new products that you've outlined today. Would it be fair to say that those new products are higher percentage margin compared to the base business products, i.e., should we expect sort of percentage margin increase in CSL Vifor as those new products come to prominence, please?

Yes, that's correct, David. Yes, good assumption.

Okay. And despite the fact that it might cause some aggravation. Just I'm going to ask about the potential new generic entrants for Injectafer. I've never really understood -- I understand that they're coming in F '27, but we see lots of different models of authorized generics. How does it -- could you give us some color as to what authorized generics or genericization of this market might mean for CSL? I mean, are you working with the new players? Or are you just agreeing not to disagree anymore?

Thanks, David. Aggravation, what do you mean aggravation? No aggravation here. Look, I think, as I said, these are not products to be manufactured for the faint of heart. So that's fine. It doesn't mean that they can't make them, but they'd have to make sure that the components and the actual inner workings of the product are right there, and that's what Herve was referring to with nano medicines. There's a complexity of the way this molecule is put together that is really difficult to duplicate. So yes, I mean, some of these other generics, we're not moving quickly to talk about 4 years from now or 3 or 4 years from now. But I'm sure discussions will continue to be held. But think about there's different curves in terms of how people look at LOEs. And this is not a small molecule LOE where you see a big cliff in a drop off because this is a complex market. We're going to continue, first of all, to expand this business and maximize the iron business in the next few years. And so we'll be starting from a higher base. But think of it more in a harder biosimilar erosion curve than a small molecule curve. So there's a long, long tail to this franchise. This goes out many decades actually, I think, in terms of our ability to continue to gain value, launching new markets, expand the indications, patient blood management, heart failure, as was mentioned, there's a lot to do here. And people that have been suffering from diseases of anemia or fatigue, as Herve pointed out. So look, we're very, very bullish on this market. We think it's here for quite a while. We're not immune nor are we ignoring those that may want to come into this market, and we'll deal with that as time gets a bit closer. But right now, I'd say we're all understanding where we are.

Next question comes from Gretel Janu at Credit Suisse.

Just wanted to go back to the anemia franchise and Vadadustat. So I just do understand there's an element of wait and see here. But how do you see the risk [ master ] if the FDA was to give a positive opinion on GSK that produced that here?

So with Vadadustat, we are obviously working very closely with our partner, IQVIA. I cannot comment more specifically. There is an ongoing discussion with the FDA. At the same time, considering the importance of HIF, if HIFs, which is the market for our -- or is our portfolio we keep monitoring the market. We keep monitoring the situation. We do believe, however, that the near term, midterm, we still have a bright future with our user portfolio, as I mentioned during my remarks, were able to sign this agreement with DaVita. So we expect or is a business to grow significantly in the coming months and years based on this new agreement, as you know, DaVita has roughly 36%, 37% market share of the dialysis market segment in the U.S. So it's a very significant step change or step forward for ESA business. So we keep focusing on ESA. We keep working closely with IQVIA, and we keep monitoring the situation regarding HIFs as it is a potential innovation in the future.

I just would add that HIFs are a promising therapy but there's always therapeutic inertia. And once there is some safety concerns raised in the quest, the therapeutic inertia sometimes goes up. And so we'll see what happens with the whole landscape of the class. But ESAs generally work. And so I think there will always be a strong place for them in the future.

Great. And then -- yes, just one other question on Ferinject and Injectafer. So you talked about the opportunity from the U.S. -- from a rest of world particularly with Ferinject. But on the U.S. side of things with Injectafer, I guess, how much are you actually impacted or restricted by really maximizing the potential of this product with the distributor agreement you have with American Regent? And I guess what are the benefits of this partnership?

So I mean, we have a long-standing relationship with American Regent, in fact, for 25 years. I've been in very close contact with American Regent and -- thank you management in the U.S. I feel that there's an extremely high level of commitments for Injectafer. We are working, as we speak, very closely to see if we can join forces to maximize the heart failure opportunity. We have a field force in the U.S., CSL Vifor U.S. pharma. We have a field force focusing on nephrologists. ARI and DSI or [indiscernible] thank you. We'll have to call on heart failure specialists in the context of the heart failure launch. So we are assessing as we speak, really the opportunity to join forces to maximize this opportunity for patients and for CSL. So once again, in summary, super high level of commitments, opportunities to do more together maybe compared to what we have achieved so far. And I really feel that our partner is very open-minded in that regard.