CSL's Largest-Ever Clinical Trial for Recurrent Heart Attacks: High Unmet Medical Need

Strong 1H18 Result and New Products Expected to Support Future Growth

Australian Equity Long Short, JCP Investment Partners

Jai Mirchandani

Australian Equity Long Short

Combining the art and science of investing

JCP Investment Partners

JCP is a research-driven, fundamental Australian Equities investment manager. We were founded in 1998 and are 100% owned by our employees, directors and associates. With almost 20 years of organisational experience we have a proven performance record in both bull and bear markets. Our alignment policy is based on the principles of employee ownership and co-investment.

We recognise the value in retaining an experienced and stable team, together with operating within a theoretically robust and proven investment framework. At the heart of our investment process is our commitment to maintaining a large ‘in-house’ research team, which is supplemented by proprietary external research. 

Our competitive advantage lies in our ability to combine the art and science of investing, providing an edge that is difficult for other investors to replicate.  

Our business strategy is to deliver long-term excess returns to our clients and maximise returns to our shareholders, within an entrepreneurial culture that allows our employees to achieve their full potential.
JCP’s proprietary investment platform allows for efficient processing of our research insights, and more efficient idea generation through our smart optimisation platform.  We then combine this with a sensible qualitative overlay through the experience and ‘gut feel’ of our Portfolio Construction team. 

We believe the sophistication of our process is a source of enduring competitive advantage, enabling us to continue to generate long-term excess returns for our clients. The flexibility and scalability of our resources, provide us with the tools to have meaningful conversations with our clients about their needs and how we can create solutions to better meet these needs.

JCP holds Australian Financial Services Licence No. 247132.

Equity Bottom-Up

<p>According to Allied Market Research, the IVIG (intravenous IG) market was valued at US$7.86bn and is expected to reach US$12.36bn by 2022. IVIG is a plasma product that is used to treat patients across many different disease categories including neurology, immunology, haematology, rheumatology and dermatology. Unsurprisingly, the US is the largest market both in aggregate and per capita (Nova Scotia Provincial Blood Coordinating Program). More recently we are also seeing the usage of sub-cutaneous IG.</p><p>The key players operating in the IG industry are <a href="https://www.smartkarma.com/entities/22142" target="_blank" data-smartkarma-citation="entities:22142:1">Shire PLC (SHP LN)</a> (through the acquisition of <a href="https://www.smartkarma.com/entities/17134" target="_blank" data-smartkarma-citation="entities:17134:1">Baxalta Inc (BXLT US)</a> ), <a href="https://www.smartkarma.com/entities/917" target="_blank" data-smartkarma-citation="entities:917:1">CSL Ltd (CSL AU)</a>, <a href="https://www.smartkarma.com/entities/21274" target="_blank" data-smartkarma-citation="entities:21274:1">Grifols SA (GRF SM)</a>, Octapharma AG and Kedrion Biopharma Inc. However CSL, Shire and Grifols make up approximately 66% of the market (Grifols Investor Presentation, June 2017) . In this report, we will be focussing on CSL, Grifols and Shire, and explore reasons and justifications why they trade at different multiples.</p><table class="table table-striped"><tbody><tr><td>Company</td><td style="text-align: center;">P/E</td><td style="text-align: center;">P/Revenue</td><td style="text-align: center;">P/Book</td><td style="text-align: center;">P/Cashflow</td></tr><tr><td>CSL</td><td style="text-align: center;">30.2</td><td style="text-align: center;">6.4</td><td style="text-align: center;">12.1</td><td style="text-align: center;">27.4</td></tr><tr><td>Shire</td><td style="text-align: center;">9.3</td><td style="text-align: center;">2.9</td><td style="text-align: center;">1.3</td><td style="text-align: center;">9.1</td></tr><tr><td>Grifols</td><td style="text-align: center;">23.4</td><td style="text-align: center;">3.3</td><td style="text-align: center;">3.7</td><td style="text-align: center;">19.1</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Bloomberg FY18 Estimates as at 9-10-17</div>

According to Allied Market Research, the IVIG (intravenous IG) market was valued at US$7.86bn and is expected to reach US$12.36bn by 2022. IVIG is a plasma product that is used to treat patients across many different disease categories including neurology, immunology, haematology, rheumatology and dermatology. Unsurprisingly, the US is the largest market both in aggregate and per capita (Nova Scotia Provincial Blood Coordinating Program). More recently we are also seeing the usage of sub-cutaneous IG.The key players operating in the IG industry are Shire PLC (SHP LN) (through the acquisition of Baxalta Inc (BXLT US) ), CSL Ltd (CSL AU), Grifols SA (GRF SM), Octapharma AG and Kedrion Biopharma Inc. However CSL, Shire and Grifols make up approximately 66% of the market (Grifols Investor Presentation, June 2017) . In this report, we will be focussing on CSL, Grifols and Shire, and explore reasons and justifications why they trade at different multiples.CompanyP/EP/RevenueP/BookP/CashflowCSL30.26.412.127.4Shire9.32.91.39.1Grifols23.43.33.719.1Bloomberg FY18 Estimates as at 9-10-17

Not All Players Are Equal in the Plasma Industry