Costly Plasma Collection and Increasing Competition Have Eroded Grifols' Moat

Market share in the global $30 billion plasma-derived protein business is concentrated among a small number of global players. Grifols lifted itself to the level of competitors Takeda and CSL with the $3.7 billion acquisition of Talecris in 2011. Grifols has fought competition and coronavirus pandemic headwinds with acquisitions and investments to build plasma collection and fractionation capacity, support its portfolio and pipeline, and expand geographically. While margins are improving following the pandemic, we think new competition could prevent Grifols from recovering its returns on invested capital.