IVIG Market Update (GIFLF.PK, BAX, HAE)

Morgan Keegan is not expecting Grifols

to “drive any significant decrease in IVIG pricing in an attempt to gain near-term market share at the expense of the long-term health of the market.” The analysts say, “At this point, it does not appear that the IVIG market is worsening, but there is little visibility on improvement…. Grifols is continuing to build awareness and expand into emerging markets, as well as increasing its presence in the US. Specifically, the company is targeting an increase of its US sales force by more than 50% from a base of 35 people…. We note that the targeted 10% reduction in plasma collections for Grifols is influenced by tough comparisons in the 1H of 2009 when it was building inventory, That said, we believe that some pick-up in collections could occur in the 4Q of 2010 as the end-demand for IVIG continues to increase and the supply of albumin is relatively tight.” As far as Baxter

is concerned, the analysts “believe that a softness in the IVIG market has already been well discounted in the stock. Hence, we continue to find the valuation attractive for Baxter.” “Haemonetics

seems to be neutral to slightly positive on the margin. We believe that a sequential increase in collection volumes could begin in the calendar 4Q as Grifols works down inventory over the next several months. We continue to find current valuation for Haemonetic shares attractive,” Morgan Keegan adds.