Ladies and gentlemen, good morning. Welcome to CSL's first half results call for fiscal 2023. It's Mark Deering speaking, and joining me online is Paul Perreault, CSL's Chief Executive Officer, Paul McKenzie, CSL's incoming Chief Executive Officer, and Joy Linton, CSL's Chief Financial Officer. Paul Perreault and Joy will shortly provide an overview of the results, and then we'll move to Q&A. As with past practice, could you please limit your questions to two? Of course, if you have further questions, you can rejoin the queue. Please note this briefing is being webcast. Lastly, before we start, I draw your attention to the forward statement disclaimer contained in the slide deck. I'll now pass you over to Paul Perreault. Paul.
Thank you, Mark. Good morning everyone, and thank you for joining the call today. Before I get into the results, I would like to take an opportunity to just say a few words about our upcoming leadership change at CSL. As you know, back in December, I advised the board of my intention to retire after 10 years as CEO and more than 25 years with CSL. It really has been a privilege to lead this great organization. I'm immensely proud of what we've achieved at CSL over the last decade, the sustainable growth and innovation with a patient-focused culture. I wanna congratulate Paul McKenzie, who's here with us today on being appointed CSL's next CEO. Paul is an experienced biotech leader with an excellent track record of delivering outstanding results.
I am confident that Paul will continue to innovate and lead CSL to its next level of sustainable and profitable growth for our shareholders and the patients that we serve around the world. I thank you all for your support over the years. I look forward to watching CSL continue to be a global leader, deliver shareholder value, and most importantly, keep our promise to patients and provide them with our life-saving medicines. Now turning to the result. As per usual, I will provide an overview of our first half results, then I'll hand over to Joy, who will go into more detail on the financials. I'll conclude with our outlook. Of course, we'll be happy to take your questions at the end of the presentations.
With the addition of CSL Vifor, you will notice that we've adopted a new format and pushed some of the detail by product to the appendix. This allows me to really focus on the drivers of each business, also provides investors with more detail as well as leave more time for questions. I trust you find this an improved approach, as always, we welcome any feedback. You all have Mark's number. Onto performance. CSL has delivered a solid result for the first half of fiscal year 2023, I think this demonstrates the strong fundamentals of the company and the disciplined execution of our patient-focused strategy. As we emerge from the COVID pandemic, the continued investment that we have made is now starting to deliver positive momentum, it highlights the resilience and the potential of our broadened portfolio. First, the headline numbers.
Revenue was up 25%. This includes approximately five months of contribution from CSL Vifor. Net profit after tax was $1.62 billion, which was steady on the previous half. This does include the one-off cost associated with the acquisition of CSL Vifor. Adjusting for this on an underlying or NPATA basis, which is the measure of what we're now focusing on, this was $1.82 billion for the half, up 10%. In terms of the major highlights for the first half, in the CSL Behring business, our IG franchise grew very strongly, and plasma collections are now at record levels. The impacts of COVID are largely behind us at this point. CSL Seqirus has continued to deliver strong sales growth driven by its high-value differentiated products.
CSL Seqirus announced a license agreement with Arcturus Therapeutics for access to their late-stage self-amplifying mRNA vaccine technology. For CSL Vifor, we successfully closed the acquisition on the ninth of August and had approximately five months contribution in this half. The integration is well advanced, delivery of our cost synergy objectives are on track. In R&D, we were very excited to receive FDA approval for HEMGENIX in the U.S. . This is the very first gene therapy product approved for patients with hemophilia B, an important new therapy that will change people's lives and potentially be a cure for many patients. Turning to the next slide and focusing on CSL Behring and its sales by therapeutic area. Overall, CSL Behring's revenue is up 11% at constant currency. As I mentioned, our IG franchise grew strongly with sales up 19%.
This was driven by a significant increase in plasma supply, with strong growth recorded in both our leading IG brands, Privigen and Hizentra, across all geographies, especially in Europe and the emerging markets. The increase in plasma supply also saw our albumin portfolio grow by 11%, with strong growth in both the U.S. and Europe, whereas albumin growth in China was constrained by the COVID environment. Hemophilia was up 12%, where once again, the standout performer was IDELVION, which was up 22%. This was driven by higher patient demand with increased in-person doctor visits and increased utilization in Japan. Specialty products were up an encouraging 5%, with strong growth in KCENTRA, which increased by 8% as hospital demand returns to pre-pandemic levels.
The other category for CSL Behring was down 31%. This was due to the fact that the revenue we received from the manufacturer of AstraZeneca's COVID vaccine was minimal in the current half as we had completed the contract of 50 million doses for Australia and other nations. Moving on to the next slide, which is our operating highlights for CSL Behring. As I mentioned at the beginning, plasma collections are now at record levels. The strong improvement in collections we achieved last financial year has continued and in fact is accelerating. For the six months to December 2022, our plasma collections were up 36%. Compared to the same period before the pandemic, our collection levels are now 10% higher.
This is a remarkable achievement and is a testament to the focus and dedication of all of our employees at CSL Plasma and the commitment of our wonderful donors. We've seen a continued increase in the use of the CSL Plasma donor app, which has undergone additional enhancements, the downloads for the app are now exceeding two and a half million. The continued adoption of the online self-administered health history questionnaire is saving donors time from waiting at the in-center kiosks. In September 2022, we welcomed back the Mexican donors to our plasma centers after the U.S. District Court in Washington granted a preliminary injunction reversing the ban on Mexican donors entering the U.S. to donate plasma. The centers on the border are recovering strongly.
We continue to invest in opening new plasma collection centers, with seven opened in the U.S. as well as one new center in Germany and others are close to opening. During the half, we commenced the rollout of the new RECOplasma phoresis devices in a number of our centers. So far, the results have been in line with our expectations of faster collection times, meaning less time on the bed for the donors. The rollout has gone slower than we would have liked due to supply chain issues with soft goods, the tight employment environment, and some teething issues that we're working to overcome. We are committed to the rollout of our program and want to ensure we get it right in light of the increased pace of collections. On the manufacturing side for CSL Behring, we officially opened the new plasma fractionation facility at Broadmeadows.
This facility gives us the capacity to process up to 9.2 million plasma equivalent liters a year and prepares us for the initial launch of CSL112. We also added new base fractionation capacity at Marburg. Both of these expansions will help us meet the increasing demand for our plasma-based therapies. We have also continued to invest in yield initiatives. As you know, yield has always been a key and important focus for us, and we have multiple programs underway in both collections and manufacturing. We'll update you when we have some more meaningful things to share with you in this particular area. Moving on to the next slide in CSL Seqirus, our vaccines business. Seqirus delivered another strong result with total revenues of $1.738 billion, up 9% at constant currency.
Seasonal influenza vaccines, which make up 90% of Seqirus' revenue, was up 9%, achieved against a backdrop of reduced rates of vaccination. Whilst there were low levels of influenza circulating during the pandemic, this has reversed, and we're seeing the highest and earliest prevalence of influenza-like illness in nearly a decade. Population immunity against influenza is also low, increasing the importance of vaccination. Despite the decline in immunization rates, Seqirus maintained a record volume of doses and continued to grow revenue through its differentiated product portfolio. Continuing with CSL Seqirus and some of the operational highlights, this Northern Hemisphere season was the first time we began selling into the pediatric segment of the market since FLUCELVAX was approved in the U.S. for six months age indication.
This resulted in an increase in demand for FLUCELVAX. We expect this growth to continue over coming years, with approvals also received in Argentina, Canada, and Taiwan, with Australia and New Zealand currently under evaluation. For Fluad, the CDC adopted the Advisory Committee on Immunization Practices, or ACIP's, recommendation for it to be one of the preferentially recommended seasonal vaccines for adults aged over 65 in the United States. This preferential recommendation provides us with the opportunity to better educate healthcare professionals, pharmacy partners, and patients on the benefit of adjuvanted influenza vaccines, which are really designed to protect the immune systems of the elderly. On the pandemic side of the business, CSL Seqirus was awarded a BARDA task order for the manufacture of H5N8 clinical trial material. We also supplied Afluria pre-pandemic stockpile, which is H5N1 to Singapore.
CSL Seqirus completed the contract for the manufacture of the 50 million doses of AstraZeneca's COVID-19 vaccine in Australia, which I mentioned before and was a tremendous achievement. Finally, on manufacturing, the additional fill and finish that we've been working on at Holly Springs and Liverpool were completed and building works are well advanced for the new cell culture influenza facility in Melbourne at Tullamarine, where I visited earlier last week. Turning to the next slide in CSL Vifor. As I mentioned at the beginning, our acquisition of Vifor Pharma successfully closed on August 9 last year. We had approximately 5 months of financial contribution from the new member of the CSL family or CSL Vifor. CSL Vifor sales for the period were $889 million. We don't have a prior period to report against, as we didn't own the business in the previous half.
Based on unaudited management accounts, CSL Vifor performed well with a revenue growth of approximately 15%. The main contributors to this growth were MIRCERA and the dialysis segment and the continued progress of the launch of KORSUVA in the U.S. The introduction of step edit measures in the iron market in the U.S. had a positive impact on Venofer, CSL Vifor's low-dose iron product, but put pressure on the high-dose iron product, Injectafer. We continue to work with healthcare providers to ensure the optimal outcome for patients. The integration of CSL Vifor is well advanced, and the cost synergies that we identified at the announcement of the acquisition are well on track. You know, there were some other highlights in the period, and they included for the iron business, the heart failure label variation for the U.S. has been submitted with a response expected very shortly.
In dialysis, the agreement with a large kidney care provider in the U.S. for the ESA portfolio is now effective from December 2022. In KORSUVA, Kapruvia was approved in Australia, Canada, Singapore, and Switzerland, with a long-term licensing agreement also signed for KORSUVA in China. In the non-dialysis part of the nephrology business, Tavneos, a treatment for patients with severe active ANCA-associated vasculitis, was approved in Great Britain, Switzerland, and the U.A.E. Just last week it was approved here in Australia. Moving on to the next slide and the R&D portfolio. The slide shows the forward-looking R&D portfolio events for fiscal year 23, as presented at the R&D investor briefing in November 2022. Let me talk about some of the highlights in the R&D portfolio, which are shown in the green words on the slide.
In immunology, we will be presenting the garadacimab HAE phase 3 study data for the first time at the 2023 American Academy of Allergy, Asthma and Immunology Annual Meeting in San Antonio, Texas. These data are consistent with the positive top-line results announced in August last year. We plan to begin regulatory submission to global health authorities later this calendar year. Berinert SubQ for HAE received PMDA approval and was launched in Japan. This approval of the at-home subcutaneous therapy for patients suffering from hereditary angioedema advances treatment options for patients in Japan. In hematology, I mentioned HEMGENIX, the first and only one-time gene therapy for appropriate adults with hemophilia B, was approved by the FDA in November and will be launched very soon.
Results from the HOPE-B study demonstrated that after two years of follow-up, adults with severe or moderately severe hemophilia B treated with a one-time infusion of HEMGENIX generated elevated and sustained mean Factor IX activity levels and durable hemostatic protection. In the cardiovascular metabolic space, enrollment in the CSL112 AEGIS-II trial was completed in November 2022. There is a 12-month follow-up after which the data will be unblinded and analyzed prior to the release of the final results in early 2024. We initiated a combined Phase 2b/3 study, POSIBLE 6, in October to evaluate clazakizumab for prevention of major adverse cardiovascular events in MACE in hemodialysis patients. In vaccines, our adjuvanted cell culture vaccine or aQIVc program is on track to go into the phase 3 trial.
For CSL Vifor, the phase III study for SNF472, which is being developed for calciphylaxis in patients on hemodialysis, was completed in late 2022, with top-line data expected in quarter two calendar year 2023. Also in the CSL Vifor portfolio, EMA accepted for review the conditional marketing approval application for sparsentan for the treatment of IgA nephropathy. The EMA will review the application under the centralized marketing authorization procedure. A review decision on a potential approval is expected in the second half of calendar year 2023. We also received approval for Ferinject to treat patients in China with iron deficiency and approvals for KORSUVA and Kapruvia in multiple countries, as I mentioned, including Switzerland, Canada, Singapore, and Australia.
Before I finish up and hand over to Joy to go into the financials in a little bit more detail, I wanted to share this slide with you, which shows the significant launch dates that are being targeted with our advanced R&D pipeline over the next few years. In this financial year, we are all set to launch HEMGENIX in the U.S. We'll also be launching HAEGARDA, or as it's known, to be known Berinert SC in Japan. As I mentioned, we are expecting to receive response to the heart failure label in the U.S. any day now. In terms of the other launches expected over the following year, I won't go through all of them as many of them will be familiar to you, such as garadacimab, CSL112, clazakizumab, or our aQIVc program for CSL Seqirus.
Plus, we've added some new projects to the impending pipeline for CSL Vifor, including SNF472 for the treatment of vascular calcification and sparsentan for the treatment of scar tissue developing in the kidney for CKD patients. Furthermore, CSL Seqirus has signed a licensing agreement with Arcturus for their self-amplifying vaccine technology. We have a multitude of late-stage programs that are well advanced and coming to fruition over the next few years, which will be a super exciting time for CSL. In all of my time at CSL, I have never seen the pipeline in such a strong position, and it really sets the company up for sustainable and profitable growth into the future. I'll now hand over to Joy.
Thank you, Paul, and good morning to everyone. Before I make a start, I do want to publicly recognize Paul's tenure at CSL. He's overseen transformation, business excellence, and incredible growth. It's been a huge privilege for me to work alongside Paul for the past two years and to observe and learn from his leadership in action. Paul's focus on people, whether it be our patients or our employees, is legendary inside CSL, and I'm sure many of you on the call can relate to this when I say that Paul is a people person. As we've announced at the CSL Vifor Market Briefing in October, guidance is now provided at statutory net profit after tax attributable to CSL shareholders before impairment and amortization of acquired intellectual property, or NPATA in abbreviated form.
It also excludes the one-off costs relating to business acquisition and integration costs and inventory fair value uplift adjustments. On a reported basis, first half NPATA was $1.818 billion, up 2%. On a constant currency basis, NPATA was $1.957 billion, up 10% after adjusting for a currency headwind of $138 million, and I'll talk to FX in more detail shortly. As you have heard me say before, we believe NPATA better reflects the underlying performance of the company. Net statutory profit after tax measure is, of course, provided as usual. I do want to highlight that unless otherwise called out, references to NPATA are attributable to CSL equity holders only. As you know, part of the CSL Vifor business includes the majority-owned joint venture company, Vifor Fresenius Medical Care Renal Pharma.
As CSL Vifor controls this joint company, 100% of the joint company result is consolidated into the financials. 100% of the revenue from the joint company is included in the CSL group revenue. The earnings are attributed according to the ownership structure of the joint company's earnings, 55% in favor of CSL Vifor and 45% in favor of the non-controlling interest. Just as a reminder, the financials in this presentation are inclusive of approximately 5 months' contribution from CSL Vifor, which of course, affects every line item of the financials. On this slide, we do provide a reconciliation between NPATA and NPAT at constant currency. Starting with NPATA of $1.957 billion, the following adjustments are included. There's $96 million attributable to the amortization of acquired intellectual property.
Our other one-off acquisition costs of $190 million. This is made up of the unwinding of the inventory fair value uplift recognized on acquisition. This is a non-cash item with the remaining balance of $85 million relating to the acquisition, transaction, and integration costs. After adjusting for non-controlling interests and tax, NPAT attributable to CSL shareholders for the first half is $1.753 billion. Turning to the group financial highlights on slide 14 and looking in these in a bit more detail. On a constant currency NPATA basis, total revenue for the group was up 25% to $7.575 billion, with a corresponding gross profit of $4.275 billion, up 24%. I'll talk to margins shortly.
Sales and marketing costs increased by 65%, which was driven by the marketing and commercial activities for the HEMGENIX launch, as well as the incorporation of CSL Vifor. The group operating result was up 18% or $3.563 billion. Research and development costs were up 25% as we advanced assets such as garadacimab, CSL112, and HEMGENIX, along with the inclusion of the CSL Vifor R&D activities. We do expect for the FY23 full year, total spend for R&D will be in line with the 10%-11% guidance envelope of total revenue as we continue to invest in innovation and have a number of exciting programs to come to fruition that Paul has already outlined.
General and administration costs, excluding CSL Vifor acquisition-related costs, adjustments of $85 million, was up 26%. This was largely driven by the CSL Vifor five-month contribution. Net finance costs increased as a result of the debt associated with the CSL Vifor acquisition and rising interest rates. On debt, our weighted average cost of debt at December 2021 was 2.43%, and at December 2022, it was 3.85%. As previously mentioned, NPATA attributable to shareholders of CSL was up 10% at constant currency. The reported effective tax rate for the half year 2023 declined to 16%, mainly due to the geographic profit mix and CSL Vifor's lower statutory tax rate.
We do expect the effective tax rate to be within the range of 18%-20% at constant currency for fiscal year 2023. Cash flow from operations was $981 million, a decrease of 31%. This was largely reflecting the strong growth in plasma collections. Another contributing factor was the higher finance costs paid primarily due to the debt financing arrangements entered into fund the acquisition for CSL Vifor. On a reported basis, NPATA EPS was down 3%. However, at constant currency, it was up 4%. Finally, we have increased our interim dividend to US$1.07 per share, representing a 3% growth against the $1.04 per share paid in the prior corresponding period. For Australian shareholders, this translates to approximately AUD 1.55, up 9%. Turning to the segment results on slide 15.
As we detailed at the CSL Vifor market briefing in October, the new segment reporting shows gross profit, less sales and marketing expenses as managed by the business units. Our new segment reporting reflects the way that the chief executive officer, who is the chief operating decision maker, monitors and assesses performance of the business in accordance to make decisions about resource allocation. This is in accordance with the accounting standards. Furthermore, R&D and G&A expenses are no longer allocated to individual segments, as the centralization of the management and reporting of R&D is reflective of the portfolio approach we are now taking to our R&D investments. General and admin costs, this follows the work that we've done over the last few years to bring together our enabling functions into a single global structure.
Excluding the five-month CSL Vifor contribution, total revenue was up 10% at constant currency, and the strong IG sales in CSL Behring and the ongoing shift to differentiated products in CSL Seqirus were both significant contributors to this top line. With the addition of CSL Vifor, where MIRCERA performed exceptionally well, total group revenue was up 25% at constant currency. As you know, COVID has impacted the cost of collecting plasma right across the industry, and of course, this has impacted CSL Behring's gross margin. I'll talk to this in more detail in the next slide. Fundamentally, however, today's margins reflect the cost of plasma 9-12 months ago, as the cost of plasma works its way through inventory until it is sold a year or so later when it is reflected in the cost of goods.
CSL Seqirus margin expanded with the continued success in the product differentiation strategy and improved manufacturing efficiencies. Lastly, the addition of CSL Vifor has had a modest but positive impact on the group's margin. Looking now at the segment operating result excluding CSL Vifor, it was up 4%. However, when you adjust for the first half fiscal 2022 contribution received for the manufacturing of the AstraZeneca COVID-19 vaccine, the segment operating result is up 8% on a comparable basis. Turning to the next slide, CSL Behring gross margin graphic. The red line is the total cost per liter or CPL for the U.S., and the gray line being the gross margin percentage. The largest components within the CPL are donor compensation and direct labor. These two combined equate to approximately 65% of the total CPL.
The remaining is a mix of leasing costs, consumables, and other costs associated with including fixed costs. The initial decline in margin that you can see on the chart arises from the sharp drop in plasma collected a year earlier when the pandemic first started to take hold in the US. Early in the pandemic, the industry hadn't yet raised donor fees or wages. You can see clearly the effect of the higher fixed cost allocation because of the reduced volume of plasma working its way through the manufacturing process. The peak in CPL occurred midway through the second half of fiscal 22, with the heightened red line reflecting such. The main driver being the increase in donor compensation as the industry worked hard to attract donors in a difficult COVID environment, along with inflationary pressures, particularly labor and supply chain costs.
With the 9-12 month inventory cycle time, these costs are now filtering through the financial statements and are contributing to the downward pressure on the CSL Behring gross margin. Now that that has happened, what we're currently seeing is a gradual reduction in CPL. To put that into context, from the peak in fiscal year 2022, CPL at the end of December has reduced by approximately 10%, and we can expect to see this benefit in gross margin in the next financial year as the cost of inventory phases through the P&L. While we do expect further softening of the CPL, managing it downwards is not an easy task, especially when you overlay the many macroeconomic factors in play.
The CSL Plasma team have been extremely diligent in evaluating and executing initiatives to continue to grow plasma volumes. We are now starting to reap the benefits of that hard work and focus. Now on to the next slide, which talks through currency. As I'm sure you can all appreciate, there's been significant volatility in world currency markets. CSL being a global company, we are not immune to this. In the first half of this fiscal year, we incurred NPAT A currency headwinds of about $138 million US dollars. It was largely driven by a stronger US dollar. This is a function of both realized and unrealized losses. Two significant realized losses amounting to approximately $50 million dollars were a function of, firstly, realized losses accrued, which related to the US dollar against the Chinese yuan. That relates to albumin.
In addition, the movement of the pound sterling against the US dollar as a result of production of Fluad in Liverpool in sterling, which was subsequently sold into the U.S. The balance of the losses relate to the movement of the US dollar against the euro, the Chinese yuan, as well as a basket of emerging market currencies, primarily from the CSL Behring sales in these currencies. This headwind was partially offset by a significant cost base in Swiss francs. Our currency exposure has improved since the last update in October 2022, and if currencies were to remain stable from now until the end of fiscal 2023, the total FX impact is anticipated to be a headwind of approximately $175 million at NPAT A, noting that we have reflected $138 million of that in the first half.
With that, I will hand back to Paul, who will finish up with some comments on the outlook.
Thank you, Joy, and thank you for your kind comments. I've learned a lot from you over the last 2 years as well, and I'm sure that I'm quite positive that your leadership style will become legendary as well. In a good way, in a good way. Onto the outlook. Looking specifically at CSL Behring, the strong growth we've seen in plasma collection in our immunoglobulin franchise is expected to continue. Notably, in the second half, we'll be launching our gene therapy product, HEMGENIX, initially in the United States. For CSL Seqirus, we expect to deliver another strong, profitable year. Consistent with the seasonal nature of the business, we anticipate a loss in the second half of the year on CSL Seqirus.
Lastly, I'd like to make a comment that the R&D portfolio is progressing extremely well. It's in the best shape it's ever been with a cluster of late-stage programs approaching fruition. In terms of our guidance for fiscal year 2023, I'm pleased to reaffirm our guidance provided in October of last year. We expect revenue growth to be approximately 28%-30% over fiscal year 2022 at constant currency.
Our guidance provided in October of last year, we expect revenue growth to be approximately 28%-30% over fiscal year 2022 at constant currency, with NPAT A expected to be in the range of approximately $2.7 billion-$2.8 billion at constant currency, a growth of between 13% and 18%. This includes approximately 11 months of contribution from CSL Vifor and excludes the one-off cost associated with the acquisition. With that, Mark, I think we're now happy to take questions.
Good. Thank you, Paul. Operator, we'll now move to Q&A. I think everybody on the call is familiar with the process. If you have a question, please press star one. Our first question comes from David Stanton at Jefferies. Go ahead, David.
Thank you very much, everyone. Paul, can I start by congratulating you on your tenure as well? The two questions from me. First one, some of your global competitors have talked to a donor fee decline as they see it going forward in the order of about 30% from the highs. CSL's talked to, you know, total plasma cost decline of about 10%. Can you explain some of the differences where they may be compared to your competitors in terms of that decline?
Thanks, David, and I appreciate the comments. Look, I would say that it's never apples to apples, and you have to look at the number of new donors coming into your system as well as the number of return donors. The new donors are at a higher rate in terms of compensation. We also have all the fixed cost overhead in the center. When we talk about CPL, we look at it holistically. Everybody wants to talk about donor fees, which is an easy lever to pull. As I mentioned, we're above pre-pandemic levels by over 10%, and we're growing, and we need to continue that growth to supply product to patients.
You know, you have to be very careful because the faster you lower the fees, the faster you're going to reduce your collections. It's a real balance that we play. Our job is to try to be more efficient and driving, you know, the overhead recoveries, the lower hours per donation, making sure that our staffing models are appropriate, to make sure that we're doing all the levers within the CPL to bring that down. Donor fees is 1 part. It's a large part of it, I get that. I'd say we're doing it in the right way to make sure that we continue to grow collections while we bring down the cost. I can tell you that, you know, as we continue to move forward, we're acutely aware of this.
I think we're already at or below donor fees for most of our competitors, so I don't think we had as much to go either, is my view.
Understood. My second question is, you know, garadacimab, you'll be presenting that, what looks to, on preliminary data, to be quite excellent data. Where do you see that product on a, on a two-year view compared to both the comparables and your own HAE franchise, please? Finally, is it higher margin? Sorry, that's the 2B part of the question. Thank you.
Well, I'm not gonna give you a two-year forecast. What I would say is that we expect a very strong uptake of garadacimab. The data is fantastic. When we take a look at what's gonna be presented in just a week or two, I think everybody will be very pleased. It is right in line or slightly, you know, what I would say is a very great profile for patients, and we expect that we will see people move there. Yes, from a margin perspective, it's going to assist. From that perspective, we're super excited about garadacimab because, you know, we've been innovating in the HAE space for a number of years. We continue to see improvements. You know, just like IDELVION to HEMGENIX, I mean, you know, we don't mind disrupting ourselves a bit in order to bring a better product to patients.
Good. Thank you.
Thank you, David. Next question comes from David Low at J.P. Morgan. Go ahead, David.
David Stanton. Congratulations. Can you hear me?
Yep. Can you hear us, David?
Seem to have lost David Low. David, we'll come back to you. Next question comes from Andrew Goodsall at MST Marquis.
Just to reiterate that, congratulations and also welcome Paul McKenzie. Perhaps if I can just start with Terumo. Just with recently, I guess we've seen that that stalled your rollout. Maybe just any more commentary on sort of when that gets started again and just on the outlook for Terumo, where that can go I guess, and perhaps, you know, potential date for a new nomogram and hematocrit for that one.
Again, hi. Thank you, Andrew. This is Paul McKenzie. I'd also like to pass on my thanks and congratulations to Paul on his retirement. He's been, as Joy said, legendary for shareholders, but our people within CSL as well as our patients who he is truly a chief patient officer for the company and makes sure everyone else in the company feels the same. On Terumo, as you know, we've had to extend our rollout of Terumo. We're still very bullish on what we've seen in terms of the results on the donor experience from both a safety viewpoint and a time on the bed viewpoint. We have run into with Terumo, and we're partnering with them actively, some supply chain challenges on soft goods, which are really...
We're very dependent on them and have to make sure we balance the speed of rollout with the risk that the presence of soft goods would present if we didn't have them in the fleet. We've been working very hard on that, and we're continuing to evaluate that supply chain availability versus our rollout. We're currently in three centers, and we look to continue to do more centers as the supply chain issues resolve themselves correctly. In terms of the nomogram, I'm pleased to report that we have received FDA approval for the IDE, which is the investigational study, and we will begin that clinical trial in this quarter.
Okay. How long would you expect that to take?
That's a relatively small amount of patients, roughly 124 patients, so should be on a short order.
Okay. My second question, just, while we're on the subject of yield, just, the last result, there was some sort of mention of potential yield within the fractionation process. Just wondering if you've got any further commentary on that and the materiality of that?
Look, it's progressing well. I would say that, you know, we'll be continuing to roll out more data when we have it available, Andrew. It's, you know, it's one thing to get it in lab scale and then start to move it into manufacturing, but we still got a ways to go to make sure that we get it all the way through the manufacturing process. Of course, you know, when we do our separation technology at the various sites, we also have to make sure that we can get it across all the sites. It sounds easy to say, "Well, all the plasma will go through a new yield process or an additional yield process," but there's a lot of complexity to it.
That's why I'm not trying to be coy, but I just say that, you know, there's some milestones that'll come hopefully later this year and into next year that we'll be able to update you on as we continue to go because we wanna make sure that as we roll it out, you're well informed. Look, I don't. Any yield is great. You know, the slightest yield, I mean, this is gold, and our business is to get better yields because the more IG yield you get, the less plasma you have to collect. That's the hardest thing we do in the business is collect plasma. I'm looking for, you know, decent uplift.
Perfect. Thank you, and congratulations again, Paul.
Thank you.
Thanks, Andrew. I see we have David Low from J.P. Morgan back online. David, please go ahead with your questions.
Thanks very much. Can you hear me this time?
Yes.
Can you hear us?
Hello.
Yes.
I can hear you.
Okay. Yes, we can hear you.
Great. Congratulations, Paul. Same as everyone else has said, it's been a privilege to listen to you, over the last 10 years or so.
Thank you.
Um-
My wife doesn't say that.
My first question, Paul, was just anti-FcRn as a threat to immunoglobulin, given it seems to be making some progress in the autoimmune space, obviously with fairly small indications today, but with CIDP trial results expected fairly soon. Just wondering how you and CSL characterize this threat now as it seems to be getting closer.
Yeah, look, David, thanks for the question. You know, I characterize it as another competitor in a particular indication, and potentially, you know. They're gonna have to show better efficacy at a lower cost, and that's gonna be difficult, right? I mean, in my view with everything they've been spending on and all the promise they've been talking about in this space because there's more than one anti-FcRn that wants to take over the world. All I would say is that as we take a look at the need for IG across the globe, there's still a growing need for IG for multiple indications. There's still an underdiagnosis of primary immune deficiency. We still have patients waiting and we haven't even penetrated areas like China and other areas, which of course has some limitations.
The need for IG is gonna be there for, you know, years to come. We've been saying for many years that IG, you know, that was the big risk. IG is gonna go away. There's gonna be new competitors. Look, innovation will happen. As I've said before, my view and CSL's view and the scientific view is that a polyclonal antibody in the immune system is a really good asset, and it will be around for a while because we're still trying to figure out where IG works in some of these patients because it covers so many receptor sites. The coverage of the receptors for autoimmune or immune-mediated diseases is beneficial as opposed to trying to find a single antibody that's going to cover a wide range of disease states. I think we're still quite bullish.
I mean, I can tell you that as I look out into the future, I'd say IG is still gonna be a very strong contributor to growth for CSL. I won't tell you what's in our forecast, but I can tell you that, you still see me collecting plasma and more plasma. That should give you some indication of our view.
Perfect. Thank you for that. My other question relates to Vifor. I noticed the gross margins were significantly weaker than the FY22 period. I'm also aware that the sales mix changed. Could I get you to talk a little bit to that? I didn't quite follow your commentary there on Vifor and the change in demand for higher concentration and lower concentration iron products. If I perhaps that's all related.
Yeah. I'll let Joy talk to the margin. In terms of the Injectafer versus Venofer. Venofer is an oral low dose product and with step edits, they're trying to get the least costly and accessible product first before they move to the injection. That's because it's higher cost and more complex and costly to deliver than oral. That was the comment. Joy.
David, I'm not sure we particularly recognize your comment that says the margins on V4 are lower. Look, we haven't provided any historical margin data. If you perhaps if I just look at perhaps the unaudited numbers that I've, that we have. Perhaps we just allocate some costs slightly differently, but certainly in terms of the fundamentals of the business, we wouldn't recognize declining margins in V4.
Okay. It's accounting treatment. I'm looking at.
Possibly.
What you presented-
Yeah.
In October, and I understand that's unaudited and not CSL's numbers, but you would put the difference there or down to different treatment rather than any change in the business.
No fundamental change in the business. That's correct.
Okay.
Yeah.
All right. Thank you. Thanks very much, everyone.
From Lyanne Harrison at Bank of America. Go ahead, Lyanne.
Good morning, all. Thank you for taking my questions. Can I start with IG demand? Obviously, we're getting good plasma, collections come through. With the IG growth, where are you seeing that? Are you seeing, you know, increase in new patients diagnosed? Are you know, getting a sense that there's an increase in utilization or grams per head being used? Can you shed more color on that?
Yep. Sure, Lyanne. Thank you for the question. I think what we've seen is certainly in the EU, which was starved for IG during COVID, we've seen a big uptake again back there as supply starting to come back with the plasma collection. Also some of the emerging markets, again, you know, there was allocation that had to be done across the globe in order to try to get to as many patients as possible. We've seen an uptick in PID diagnosis post-COVID because patients are now coming out of their homes. You know, when you have a compromised immune system and you have something like a pandemic going on, you try not to be around people too much 'cause people are contagious.
Now there's more face-to-face visits in the doctor's office coming back. You cannot diagnose rare diseases with a Teams call or a video call or a Skype call, I can tell you. These are patients that need to be well understood. You need good histories and physicals. You need testing. You know, that's how you diagnose these rare diseases, and especially something as complex as primary immune deficiency, which presents itself mainly as infections. They might be getting antibiotics during COVID to treat an infection, but nobody's looking at the underlying disease. I think that's where we've seen, a better uptake in terms of new patients being diagnosed. These patients never went away. It's just they haven't been diagnosed.
Even when we go back to, you know, a decade and a half or two decades ago when there was supposedly, you know, the demand had come down and there was a glut of IG. The glut was only because people didn't believe the shortage was over, and they were waiting to put patients on. Physicians want to treat patients. If they don't have product to treat, they stop looking because they wanna be able to help and they wanna be able to treat. That face-to-face back on board, new patients being diagnosed, the emerging markets, again, is a driver of that as well as Europe that was had less IG available during the pandemic.
Okay. Just a follow-up with IG and inventory levels. You know, as seen in your balance sheet, you've got close to $5 billion in inventory now. Are you happy with your current stocks of IG, or you're still looking to build more?
Well, I'd love to say we're building more, but if you look at our finished goods inventory versus WIP and, you know, plasma collections, there's not much finished goods inventory ready to go. That's, that's part of the issue, is that, you know, it's hard to build inventory when, you know, you're still processing and producing and trying to get the inventory into the finished vials. I would say we're not where we wanna be yet in terms of safety stock, if you will, or more additional inventory. We're still pushing it out fairly quickly as it comes through the plants.
Thank you very much.
Mm-hmm.
Thank you, Leanne. Next question comes from Chris Cooper at Goldman Sachs. Go ahead, Chris.
Thanks, Mark. I also wanted to say thanks and congrats to you, Paul, but I do actually have two questions for Joy today, please. Joy, just on slide 16, your commentary that Behring margin will improve over the medium term. Can I just confirm the ultimate expectation is still to return to pre-COVID profitability in that division?
I think that's right. I don't think we see any reason why that wouldn't be the case. You know, we're not going to sort of say exactly at what point in the future that will be, but certainly over that medium-term period, that remains the aim.
Presumably, you don't need your CPL to return to that December 20 level in that chart for that to occur. I mean, you've had pricing, probably with some mix changes going your way in the interim period. Is that correct?
Yeah. I think that's right, Chris, that, you know, the world has changed since COVID, right? The way in which we get back there will look a bit different to what it was like pre-COVID. I'm not sure we ever think donor fees will go back to where they were pre-COVID. As you say, we've taken some pricing along the way. We've done a lot around productivity. We continue to do a lot around productivity. Paul sort of alluded to some yield work that's, you know, quite a bit of investment going into that. There's a lot of things going on to get ourselves back there. We've got the benefit of scale again as we've built additional capacity in the manufacturing facilities, and we'll start to see the volume benefit of that.
There's a lot. Terumo, we've talked about, you know, benefits through the plasma collection process. There'll be continued innovation. There'll be continued productivity improvements. They will all contribute to how we get back there, albeit with probably a higher donor fee over the long run.
Got it. Thank you. Just a second on the NPAT A adjustments, if you don't mind. I would expect a bit of first half weighting in those numbers, but it does look like you're tracking just a bit ahead of the implied run rate you guided to for the full year. I guess what I just wanna confirm is whether the reiteration in NPAT A guidance amounts to a reiteration of the NPAT target that you sort of outlined in October.
I'm not sure I can particularly understand the question. I think what we're doing is reaffirming the NPAT A guidance of between $2.7 billion and $2.8 billion. you know, pleased to be able to do that today, but I don't think, I'm not sure I particularly understand your question, Chris.
It just looked to me that the amortization of the acquired IP was just running at a level which was above where I would have expected it to be. I just wanted to make sure that was just a bit of front-end loading of the, of the full year guidance.
Okay.
Just consolidated-
Right.
For the period.
Okay. Yeah. I think a couple of things to note. Yeah, five months in the first half, six months in the second. Slide, was it 13? Just make sure you are taking out the NCI or the amount that's not attributable to CSL shareholders. I think the guidance we provided in October, we haven't moved away from that in terms of the amortization of acquired intellectual property. I think we've still got that same range. We have. You know, we haven't finalized the PPA work. What's in the balance sheet at December is an interim, preliminary number. We have 12 months post the acquisition to finalize that. We will be looking to, you know, bring a more final number in June. I see no reason why that amortization won't be in that range of $140 million-$170 million attributable to CSL shareholders.
Got it. We're still looking for a stat NPAT of around $2.5-$2.6 for the full year?
Yeah. Yes. Yeah, I see where you're going. Yep.
Great. Thanks, Joy.
Good. Thanks, Chris. Next question comes from Steve Wheen at Jarden. Go ahead, Steve.
Thanks, Mark. Paul, I just wanted to ask about the IG growth. Obviously growing the raw materials at 36%, does that include sort of the beds all back into full capacity, Mexico? Is that, you know, where are we in the trajectory of getting back to that sort of run? I'm just trying to understand how much more collections can improve just on sort of the structure of your clinics. And I'll do my second question after that.
Yep, sure. No problem, Steve. We have more capacity in our centers. We're above pre-pandemic levels and growing. As I said, We're 10% above our high pre-pandemic, that's really a great number to be at, but we still have capacity. The centers on the border were at about 70% of the capacity that we had going into the pandemic. We still have room to grow there at those centers, and I think there's more to come on top of that, you know, as we continue to move. I'd say that there's more capacity, there's more opportunity. We are running still higher than our competitors in terms of the average donations per center. You know, we're still opening some new centers as well.
I think the fleet has more capacity to grow. You know, it's all based on our IG growth forecast. When we take a look at our forecast, as you know, we're looking 24-36 months out in order to make sure that we have the fleet optimized to deliver that much plasma, you know, that far in advance. That's why we're collecting and still see the capacity there.
Great. Thanks, Paul. Then one for Joy. With regards to that gross margin chart and the cost per liter of collection, you seem to be talking to the 10% decline from the peak as sort of not gonna keep going at that sort of level immediately. I'm just curious about the extra cost of the contingency arrangement you have now with Haemonetics to extend that for two years. What sort of cost does that sort of inject back into this collection profile?
Yeah. Thanks, Steve, for the question. There's two parts to that. Let me just go back to the first part, which is you know, we do see there will be continued softening of the CPL, right? You know, the 10% was to December. You know, we do think there will be some further softening, particularly of the donor fee. Now, as I said earlier, we don't think it'll ever get back to where it was pre-pandemic but, you know, we're still at higher levels than where we think we will land. That would be the first comment I would make. The impact for Haemonetics is actually not particularly material. We, you know, have a good relationship with Haemonetics.
The extension there is really, you know, effective risk management just to make sure that we have, you know, continue to get soft goods and, you know, continue to collect plasma, right? It's not a, it's not a particular, material increase in cost per se. The upward pressures on costs are much more, you know, more global supply chain costs, inflationary pressures, wage pressures. Those types of things are probably a bigger headwind than anything to do with Haemonetics or Terumo.
Good. Thanks, Steve. Next question comes from Sean Laaman at Morgan Stanley. Go ahead, Sean. Sean, can you hear us?
I can. Hello, Mark, can you hear me?
Yeah. Hi, Sean. We can hear you. Please go ahead.
Oh, good. Good. I was just saying, you know, congratulations, Paul, on your retirement and all the best for the next chapter. Maybe some of the elements of this question have already been answered, but just to ask it to clarify my own understanding. My question relates to patient access to IG over the mid to longer term. We know CSL has been the most prolific company in the industry in terms of growing center numbers over the years. I just wonder if the cadence of rollout continues or whether you see plasma volumes growing more from liters per center rising over the mid to longer term. Does the challenge that we've observed of access to plasma volumes over the last few years drive a renewed or increased focus on IG yields?
Can we expect a material improvement in IG yields? And what might that magnitude be? I mean, there are some unlisted companies that suggest or anywhere between a 10%-100% improvement in IG yields. We know CSL has a pattern out there, probably one of many, which suggests a double-digit increase in yield. Give us some context on that. You know, will any improvement in yield that CSL might be able to achieve over the mid to longer term, be potentially matched by competitors, or will this be a competitive advantage to the company? Thanks, Paul.
Sure. Look, I would say that the access to new centers continues, and we are opening new centers, as I mentioned earlier, not at the same pace as we were pre-COVID, where we were opening 40 a year. We've now gotten to a point, and we're the second only to Grifols in terms of the number of centers that we have in the US and combined fleet. I think that's one thing that puts us in good stead because, again, each of our centers collects more on average per center than our competitors. There's still room to grow there. We're still opening new centers.
We hope to be able to process even more donors with the improved times of donors on the beds through the new systems we're implementing. We are looking to obviously not collect plasma if we don't have to. The demand requires that we do. The patient starts, the new patients available, the new geographies. You know, we're selling into over 102 countries today at CSL. We don't have every product in 102 countries, right? We don't have the whole portfolio in every country. We're still moving plasma products, including, you know, KCENTRA, including HAEGARDA, including BERINERT, including IG, including albumin. Those are all plasma products, and we need the plasma if we're gonna continue to expand into these new countries.
The countries that we're already in today, in fact. That's the global nature of our business. We're the largest global player in the industry, and that's our job. There's a lot of people at lab scale that talk about IG yield. Nobody's done it at scale. You know, there's a lot of people that claim they can get. I mean, 100% IG yield would mean you're getting more IG than is available because we're already recovering, you know, more than that'd be a pretty big ask. I would say that we certainly are well aware of everything that's going on in this space, and we think that the programs we have are fantastic. Now, will they all work?
You know, there are different areas of yield that we'll continue to explore, different steps in the process, different areas. I think we will have a competitive advantage for quite a number of, you know, years because this doesn't happen overnight. Unless my competitors are doing things I don't know, which could be the case because I don't know everything, I would say I like where we sit at the moment. You know, the magnitude is significant, you know, for us, where I could stop opening centers. That gives you some idea if you figure out how many liters we collect per center on average.
When we see the demand continuing to grow, in the high single digits, which we are, so that, you know, somewhere between that, 6%-9%, and yet we, as the leaders, want to grow faster than that. I still want the business to try to grow in double digits in IG because we're the leaders there, so that's our job. Look, it's not one thing that's gonna make a difference, and as I said earlier, you know, implementing yield across every manufacturing facility, is going to take some time because there's some processes that aren't exactly the same at each stage of the fractionation process. It's a complex business as usual, which is one of the beauties of the business, because not everybody can do what we do. I think we're in good stead, and I'm really excited about the future, innovations that'll come out of CSL.
Sure. Thanks, Paul. One more follow-up, if I may, just on MIRCERA and, I guess the other griller in the U.S. dialysis space and that contract win. Give us some context about how potentially material, that contract may win, may be, if you can.
Well, the new contract with MIRCERA allows us access to a whole other dialysis player. Obviously, if you look at the overall population of patients on dialysis, it opens up a significant opportunity for us as a company. I don't wanna go into forecast and where we'll be, right?
Awesome. Thanks so much, Paul.
Terrific. Thanks, Sean. Next question comes from Saul Hadassin at Barrenjoey . Go ahead, Saul.
Thanks, Mark, and good afternoon, everyone. First question from me, just looking at the rates of growth between IG and albumin. Just wanted to check, is albumin growth of 11%, is that a good proxy for your liters collected, 6-9 months ago? Is the difference to IG then at 19%, is that effectively all price and a bit of mix?
Yeah, thanks, Saul. Look, it's about on average, as you know, it's not the same, you know, production of albumin as IG in terms of apples to apples. There's always gonna be a difference between IG and albumin availability. In terms of where we take a look, yeah, there is some price and there's mix and there's volume. It's really a mix across all of those areas. I mean, when you look at the different regions, you've got about, I would say from this result, what we're looking at is about 75% volume and about 25% price.
Thanks, Paul. Just another one from me on plasma centers. The comment around collections being up sort of greater than 10% pre-COVID, I think your collection centers are probably up around 30% versus where they were pre-COVID, at least in aggregate.
Can you just talk to those centers that have been opened, whether they are sort of similar size and in essence, you need to get back to 30% growth in leaders, total leaders collective versus pre-COVID to see those centers really running at a very efficient level. Thanks.
The newer centers are less of a proportion than they used to be, there is capacity there for the new centers to get there. They are the same size, by the way. We have a, you know, a footprint and a process of centers in terms of scale, size, number of beds, etc. We don't want them to be suboptimal, and we're running at what we think is the optimal size and capacity. There's more room to grow in individual centers. It doesn't mean that every center has 30% to grow. Overall, it all contributes to that growth that you've seen.
Great.
Great. Thank you.
Thanks all. Next question comes from Gretel Janu at Credit Suisse. Go ahead, Gretel.
Thanks, Mark, good morning all and congrats, Paul. Firstly on CSL Vifor. Back to the early comments on MIRCERA, trying to understand what happened in this half that contributed to the very strong growth there. Was there any early adoption from DaVita in the period? Going forward as well, with the approval of dapagliflozin out there, how do you see the growth platform for MIRCERA in the medium term? Thanks.
If I can just comment on MIRCERA. Obviously when we started up the new contract, you have to provide inventory. Part of what you've seen is the inventory growth across that new partner with us. In terms of the HIFs that you mentioned, obviously the HIF labels, you know, have come out. We're continuing to evaluate that, but we think most of that penetration will happen for those that aren't tolerant on the MIRCERA or the ESAs. They'll be an impact over time, but we don't think it will be significant out of the gate.
Understood. just to be clear about second half performance for MIRCERA, you wouldn't expect such a huge step up because you already saw some of that inventory come through in that first half, just to be clear?
Correct. Yes.
Great. Then secondly, just on HAEGARDA, just wanting to understand a little bit more about your rollout strategy and in particular, how much additional sales and marketing expense should we expect in the second half?
Thanks. I would say that in the first half, you know, we had quite a bit of sales and marketing expense because we had to prepare. As I said, this is something we have to do in a pristine manner. All eyes are on us in this space. You know, there's five competitors with a gene therapy for Hema that are waiting out there to look at us and see what we're doing. They wanna make sure that, you know, they learn from us. All eyes are on us. This is a costly product. We have to get all of the payers on board, which our access team has spent a lot of time and effort on education and working through the models.
I think we've done a great job of explaining the benefit to the patients over the long term. You know, the actual benefit as a cost is tremendous and well documented. I think, you know, we're getting there. The treaters have patients that they'd like to put on, but there are, you know, some hurdles to getting these patients in and setting up the appointments and the administration, which is, you know, 1 shot-ish, but it still, you know, takes time to understand how to infuse a gene therapy with a vector. I wouldn't expect you to see, you know, 100 patients sign up anytime soon. Right? It's gonna take a while to get that.
The sales and marketing will continue because there's a lot of work to do. you know, we've budgeted for most of that, and so, you know, it's within our results guidance that we're giving you. I wouldn't look for anything additional to what's in there because we already knew what was coming. I think that's fine. We also have a clinical trial, post-marketing, trial to run, and that is going to take a while to do because you have to have high antibodies to the vector that need to be identified for those patients. It's not a large study. It's only about, I think,
Thirty-
Thirty-
31
... 31 patients in the trial. That'll take another probably at least, you know, year or more to go because it's hard to find patients with this high antibody titer to the vectors. I would say it's going to be as more and more patients get enrolled and get experience with it, then we'll start to see the uptake into next year. Overall, I'd say, you know, it's going really well. Thus far, there's a lot of interest, a lot of patients that are ready to find their doctor and say, "Hey, you know, let's go ahead and give this a try." We'll see. I mean, like I say, all eyes are on us and we got to make sure Gretel is done in the right way.
Thanks, Gretel. Next question comes from Craig Wong-P an at RBC. Go ahead, Craig.
Great. Thank you. Just on IG sales, I noticed that Privigen experienced stronger growth than HIZENTRA in the period. Could you talk about the dynamics there and if this means that mix might not be much of a benefit in future periods?
No, look, I think mix will be fine, but as I said, a lot of the areas that grew were Europe and emerging markets, and a lot of those are more tender-based on IV and hospital use. I'd say you saw a lot of that from a Privigen volume perspective. As I said, it was about, you know, three-quarters volume and some price. The price would have also, you know, probably been a little bit more weighted towards Privigen. From that perspective, you probably saw a little bit of a difference there between Privigen and Hizentra.
That's understood. Just my second question on the Seqirus margins. Joy mentioned there was some benefit there from product differentiation and then the manufacturing side as well. Just wondering if you could provide a split between those factors and also whether the current margin which you achieved, is that kind of a new sort of normal sustainable margin for that business?
I think the margin really, it really reflects the product mix, right? What I think we've done a very good job of is to move the market away from an undifferentiated, relatively low, egg-based product, to both FLUCELVAX, which is the cell product, and Fluad, which is the adjuvanted egg. I think if you go to the appendix B, I suspect. Yep, appendix B, it does give you a split of those products, and you can see the growth. You know, we're not going back to egg-based products anytime soon, right? This is a fundamental shift- At all. Yeah, exactly. It is a fundamental shift that in the Seqirus business we've been on for a few years now and have, you know, it's underpinned the success of CSL Seqirus and continue to do so.
Okay. I think I thought you mentioned there might've been some manufacturing efficiencies which you got through so that it's mainly on the product mix.
Yeah.
cost saving.
Yeah, I mean, clearly, you put more through the facilities, you tend to get a bit of favorable manufacturing and, you know, volume was up, particularly in Europe, so you know, we will, there is some favorable manufacturing in that just from efficiencies. The main component is the product mix shift from the undifferentiated product through to FLUCELVAX and Fluad.
We also had better yields on a number of the strains this year.
Yep.
that also helps us.
Yep.
on the margin side. Yield is important, not just in plasma, by the way. You know? It's important in flu as well.
Okay, great. Thank you.
Good. Thanks, Craig. Next question comes from David Bailey at Macquarie. Go ahead, David.
Yeah. Thanks, Mark, and congratulations, Paul. Joy, just slide 16, the one with the CPL and the gross margin. Looks like there's a, you know, pretty strong negative or inverse correlation between those two variables up to the September quarter. Just wondering what the basis for that dip was, and if we can sort of confirm that this half is your expectations of being a trough for gross margins for Behring.
Thanks, David. I've been waiting for this question until I'm surprised it took all the way to you to ask it, but there you go. I think a few things we would say. Firstly, CPL is not the only component that impacts gross margin, as you know, but it's clearly been a really material one over the last few years. It's, you know, certainly post the pandemic. What we've tried to show on the slide is that trend in the CPL, and obviously what's been going on sort of by quarter on margins. I mean, the margins do bounce around a little bit, right? Month by month, quarter by quarter, you do get a little bit of a bit of movement because there's a range of other factors, right?
Whether that be supply chain costs or, you know, if there's a write-off in a, in a manufacturing facility or, you know, mix of products and things. You do get some movement. I think we could, you know, based on what we know now, I think we would reasonably expect that we are on or around the low point. You know, famous last words on future inflationary pressures and global supply chain costs. Based on what we know today, I think we were saying that, we reasonably think that we are on or around the low point.
Okay. That's helpful. Then just around back to MIRCERA. Just wondering if that contract was captured within the guidance provided in October, $300 and $330 at the impact level? Just wondering if that contract with DaVita was captured within that guidance?
Yes. Oh, yes, it was. Yes, it was, David. Yep. Yep.
Great. Thank you.
Thanks, David. Next question comes from Andrew Paine at CLSA. Go ahead, Andrew.
Yeah. Hi. Thanks for taking my question. Just on the albumin, you called out China was lower in the half on COVID. We're just seeing increased engagement in China's health system since the start of the year. Just wanting to know how material that is, you know, the China sales in for albumin and, you know, if you're expecting that to increase in the second half as the economy reopens over there?
Look, I'd say it was timing was part of that for sure. We would expect to see some in China. I can tell you that we have a lot of demand for albumin in other countries as well, including all through Europe, where we've seen increased demand since COVID has subsided. You know, there's plenty of demand across the globe for albumin, and China will continue to come forward in looking for more albumin.
Sure. Thanks. Just one other on Vifor. Look, I know it's early and, but now you've taken control of Vifor, are you able to update your view on the EPS accretion of the deal? I know you've said low to mid-teens and payday per share previously in the first year. Just wanting to see how that's looking, from your view.
Yeah, I'll take that one. Thanks. I think when we're looking Well, we've reaffirmed our guidance on the last page of the presentation. That is pretty all-inclusive, so reaffirming our guidance around EPS accretion as well.
Good. Thank you. Thank you, Andrew. Our last question comes from Mathieu Chevrier from Citi. Go ahead, Matthew.
Yeah. Good morning. Good afternoon. Thanks very much for taking the time to answer my question. My first one was on Injectafer, and I was wondering whether you could give us a sense of the size of the opportunity in heart failure in the US.
Well, again, we're waiting for the label to come out, hopefully any day now. Again, I won't go into forecast. I think there's a significant benefit for patient outcomes, and we do think we'll be contributor, but it's already in our forecast for this year. I don't expect an upside on this forecast 'cause we factored in that success for this year.
Understood. My second question is on saRNA flu vaccines. I could see from slide 11 that you have your COVID candidate listed. I was wondering why your potential flu vaccine saRNA candidate is not listed.
Look, I think it's early days. Flu, you know, you've got four antigens going in. You've got to really make sure that self-amplifying is the right platform for flu. We've got our aQIVc program, which, you know, is really what we think is the next generation flu vaccine. You know, the mRNAs have not been, I would say, convincing on their flu vaccine trial so far. They've got somewhat similar immunogenicity but a lot more side effects. You really want something more. aQIVc, I think, is going to show a very strong result, is what I expect in the phase III trial that we're going to start in the August timeframe. I think, you know, there's still more to come on flu.
Everybody thinks it's easy because it says mRNA, and it's tough. Flu is difficult. You know, you've got shift and drift of viruses, and you have four antigens going in. Everybody thinks they wanna make a universal flu. The mRNA's delivery system in the first generation still has issues. We need to solve for dose, we need to solve for stability, we need to solve for durability. All of that still needs to go, where our current vaccine platform already delivers that. That's what we're looking at in terms of. You know, science takes time. You have to have some patience. Everybody, when they have one success, thinks it's, you know, easy just to push it to the next one. Life tells me that's not typically the case.
Thanks very much.
Yep.
Good. Thank you, Matthew. Ladies and gentlemen, we have no further questions in the queue, so I'll draw the briefing to a close. I wish you a good afternoon, and thank you for your interest in Moderna.