Even as Australia’s CSL continues to grow, the company’s ambitions for its kidney disease and iron deficiency outfit Vifor Pharma—now known as CSL Vifor—have become more muted.
On an investor call Tuesday, executives blamed those “dampened” expectations on commercial and regulatory hurdles, plus lackluster performance in the clinic.
“While the strategic potential of the business and the adjacencies with CSL Behring portfolios remains strong, we are working to address a number of challenges,” CSL’s CEO and executive director, Paul McKenzie, M.D., said on a call with investors this week.
CSL closed its $11.7 billion acquisition of Vifor back in August of 2022. The deal was intended to diversify CSL’s existing portfolio of vaccines and blood plasma products. That same year, the company united its myriad subsidiaries under the collective CSL banner, rechristening its quartet of offshoots CSL Behring, CSL Plasma, CSL Seqirus and CSL Vifor.
Now, less than two years after the Vifor buyout, CSL’s CEO McKenzie has warned that some of Vifor’s portfolio is facing “commercial and regulatory headwinds,” including step-edit pressure on the unit’s top product Ferinject and reimbursement bundling for its kidney disease med Korsuva in the United States.
When a patient’s health plan calls for step therapy on a certain drug, it means that patient can be required to try cheaper alternatives before “stepping up” to a similar-acting but more expensive drug. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) currently bundles coverage for certain kidney disease drugs—including Korsuva—with other aspects of care like dialysis and lab work.
Step-edit measures from U.S. payers have ultimately benefited Vifor’s iron sucrose injection Venofer. However, the framework “puts pressure” on the company’s high-dose iron product Injectafer, McKenzie explained.
McKenzie also pointed to poor showings of certain late-stage Vifor assets in the clinic.
“These collective dynamics have dampened our near-term financial growth expectations for CSL Vifor,” he said, without diving into forecast specifics.
For the first half of CSL’s 2024 fiscal year, which concluded on Dec. 31, CSL Vifor generated roughly $1 billion in sales. The company couldn’t directly compare those results to 2023 given that the prior comparable period only included five months, CSL explained.
Still, there’s reason to be optimistic about Vifor’s future, McKenzie stressed.
“On a positive note, CSL Vifor continues to generate strong revenues and margins, together with strong cash flows, and we are extracting synergies over and above our initial expectations,” he said on the company’s investor call this week.
On the whole, CSL grew revenues to $8.05 billion over the first six months of its 2024 fiscal year. Apart from Vifor, CSL’s other business segments largely trended upward for the period. CSL Behring, for its part, saw revenues climb 14% to $5.24 billion, according to CSL’s earnings report. The company’s vaccine arm, CSL Seqiris, increased sales 2% to $1.8 billion, driven by strong growth of the company’s adjuvanted flu vaccine.
Looking ahead, CSL has reaffirmed its previous guidance. Specifically, the company is gunning for net profit after tax adjusted (NPATA) within a range of $2.9 billion to $3 billion at constant currencies, which would represent growth over fiscal year 2023 of 13% to 17%.