A challenger appears: Could this new entrant threaten the CSL share price?

Is CSL going to lose its market dominance?

| More on:
A doctor in a white coat sits at her computer with finger on mouth thinking about something in her office with medical equipment in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The CSL Ltd (ASX: CSL) share price might have a challenger in the coming years if Aegros is successful with its growth plans.

CSL is the biggest ASX healthcare share and it has operations across more than 100 countries and various healthcare areas such as medicines that treat hemophilia and immune deficiencies, as well as vaccines to prevent influenza.

CSL Behring operates one of the world's largest plasma collection networks. It uses "three strategic scientific platforms of plasma fractionation, recombinant protein technology, and cell and gene therapy."

What is Aegros?

Aegros describes itself as Australia's newest plasma fractionator. It says that its HaemaFrac offering can disrupt the market by halving the cost, reducing the environmental impact and enhancing product safety.

Aegros has highlighted one of the major problems with the current plasma process:

The 1980s HIV/AIDS blood supply contaminations resulted in regulator consent decrees which created the consolidated, highly automated, capital-intensive industry we have today. Existing fractionators are bound by these grandfathered approvals which effectively render any changes to the prevailing production process prohibitively expensive.

Today the industry is on the flat section of the cost curve, focused on fractional cost reductions. Currently, CSL is the industry leader, manufacturing up to six products in 10,000L batches.

What are the company's plans?

According to reporting by The Australian, Aegros has partnered with Cambodia's Royal Group to build a US$400 million plasma fractionation plant in Singapore.

This Singapore plant will reportedly be capable of processing more than 1 million litres of plasma when completed. Production is planned to begin two years after it finds a suitable location in Singapore.

Aegros co-founder and executive Chair Hari Nair said:

This deal represents Aegros' first overseas expansion and in another world first, will use plasma currently collected in Asia which cannot be processed by the existing fractionators.

This new facility could be very useful for the market because, according to Aegros, two million litres of plasma from Asia are discarded each year because they were not suitable for conventional fractionation. Could solving this problem be a game-changer for the global plasma market and harm the CSL share price?

The other Aegros co-founder, John Manusu explained that the company's technology had viral removal capabilities and that it has a disposable cartridge system, which means if there is an issue, only the cartridge is contaminated, not the whole facility. Manusu said:

Plasma is a national treasure and it is a travesty that existing processes can't deal with that.

The Asian market represents approximately 60 per cent of the world's population but only represents approximately 30 per cent of the therapeutic plasma product sales. It is a grossly undersupplied market.

Is Aegros going to list on the ASX?

It was planning to list this year, but now it's expected to happen late next year. Manusu said:

The ASX listing is not a goal. It is an outcome of what our goals are.

Those are all due to happen by March of 2024. That's the point where we will press the button and say 'let's go for our IPO'. If you just run through the rationale of that, we will list in that case probably in the September to December period next year.

CSL share price snapshot

Over the last six months, CSL shares are down more than 14%, as we can see on the chart below.

Created with Highcharts 11.4.3CSL PriceZoom1M3M6MYTD1Y5Y10YALL14 Feb 202314 Aug 2023Zoom ▾Mar '23Apr '23May '23Jun '23Jul '23Aug '23Mar '23Mar '23May '23May '23Jul '23Jul '23www.fool.com.au

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

Should I buy the dip on CSL shares?

A leading fund manager gives his verdict on the growth prospects for CSL shares.

Read more »

A woman relaxes on a yellow couch with a book and cuppa, and looks pensively away as she contemplates the joy of earning passive income.
Healthcare Shares

NIB shares have soared 24% this year. Does Macquarie expect this to continue?

Will this private health insurer continue to deliver big returns? Let's find out.

Read more »

Woman presenting financial report on large screen in conference room.
Healthcare Shares

Up nearly 30% in a year, should I buy Fisher & Paykel shares before its earnings result?

Will the ASX 200 healthcare stock continue to outperform?

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

CSL shares among most expensive on ASX. Is now a good time to buy?

Analysts predict CSL share price growth will keep on coming.

Read more »

A man looking at his laptop and thinking.
Healthcare Shares

Should you buy the dip in the ResMed share price?

Let's see what one leading broker is saying following yesterday's pullback.

Read more »

A woman puts up her hands and looks confused while sitting at her computer.
Healthcare Shares

Down 5%: What's going on with the ResMed share price?

Let's see what has spooked investors today and caused them to push the sell button.

Read more »

Beautiful young woman drinking fresh orange juice in kitchen.
Healthcare Shares

Guess which ASX 300 stock is jumping 11% on big news

This stock is having a day to remember on Thursday. But why?

Read more »

A group of medical researchers stands side by side with each other wearing white coats in their research laboratory with scientific equipment in the background.
Healthcare Shares

Trump executive order to hit these 3 ASX pharmaceutical stocks

Donald Trump’s new executive order caused these 3 ASX pharmaceutical stocks to crash on Monday.

Read more »