CSL Biotherapies manufactures and markets vaccines and pharmaceutical products in Australia and New Zealand and is responsible for international sales of influenza vaccines. In-licensed pharmaceutical products include vaccines and a range of neurological, dermatological, analgesic, urological, allergy and emergency products.

Strong contributions from GARDASIL* vaccine sales in Australia and an expanding international influenza vaccine business have underpinned significant growth in sales revenue to $317 million - up 49% on last year.

We have continued to expand our international sales of CSL's Afluria® and Enzira® brands of seasonal influenza vaccine and plan a US market launch in time for their 2007-2008 winter season. On 30 March this year, we filed a Biologics License Application (BLA) with the FDA for registration of CSL's influenza vaccine in the US. The FDA has since confirmed acceptance of the dossier for evaluation under an expedited review process.

In China, a clinical study has been completed as part of the registration process for our influenza vaccine. Following marketing approval from Germany this year, we now sell influenza vaccine in eleven European countries and expect to develop this market further. CSL has appointed a new distributor to sell and distribute the vaccine in the United Kingdom and Ireland. We are also making good progress in expanding our influenza vaccine business in South America.

The continuing international expansion of our influenza vaccine business and planned entry into the US market are underpinned by capital work in progress that will significantly increase the vaccine production capacity of our Melbourne plant. This project is on track to deliver additional capacity in 2008.

A national immunisation campaign against cervical cancer being funded by the Commonwealth Government began in April this year. Through school-based programs and general practitioners, free vaccination with GARDASIL* is available to females up to 26 years of age. Merck has exclusive global marketing rights for GARDASIL*. CSL receives royalties from Merck's global sales and has distribution rights for Australia and New Zealand.

Q-Fever is primarily an occupational disease of people working in the meat and livestock industries and CSL produces the only known vaccine against this disease. Manufacturing the vaccine is part of an ongoing commitment to products of national interest.

CSL will continue to manufacture and sell Q-Vax®, CSL's Q-Fever vaccine as well as the screening tests under a new ten-year agreement with the Commonwealth Government. In May 2007, work started on a new Q-Fever vaccine facility at CSL's Broadmeadows site in Melbourne. This state-of-the-art facility is scheduled to become operational in 2009.

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