An Acquisition of Momenta Would Help CSL Maintain Momentum, No Change to Fair Value Estimate

While narrow-moat CSL has not alluded to acquisitive growth plans, we speculate that the purchase of no-moat Momenta would be a good strategic fit for CSL and would allay some of the mid- to long-term risks to its plasma business. As recently published in our note on Jan. 16, 2020, “Positive Potency News for Momenta’s M254 Leads to FVE Increase,” Momenta has pipeline products which we forecast to make significant inroads into the key immunoglobulin industry over the next decade. CSL is the natural acquirer as it is partnered with Momenta on one of the three key pipeline drugs, M230 or CSL730. However, we see another product, M254, a high potency form of immunoglobulin, as the game changer in alleviating the supply constraints in the plasma industry.