CSL is looking to appeal the US-Mexican border decision arguing that it threatens the health of patients with life-threatening conditions that require plasma-based treatments. But the biotech is wading into the muddy geopolitical waters of sovereign borders and the US-Mexican border has long been a hot button issue.

The border agency argues the kind of visas Mexican donors are using to get into the US are designed for short business stays to promote international commerce - and that by selling plasma the donors are conducting fee for service transactions that have no international trade element.

The continued loss of access to Mexican donors exacerbates an existing plasma supply problem. The US has already experienced a 20 per cent drop in US plasma donations due to COVID.

Of course ‘donations’ is a misnomer because donors are paid around $US50 each time they roll up their sleeves.

The US Customs and Border Protection agency maintains that because collecting plasma is a commercial transaction CSL and other plasma collectors can just hike their plasma payments to attract more US donors.

Loading

CSL is no stranger to this strategy and has already increased these payments during COVID to boost supply.

Payments for and supply of plasma is the most watched issue inside the investment community - the single largest reason that CSL is not seen as a financial beneficiary of the pandemic even though it has been engaged in the research and manufacturing of the AstraZeneca vaccine.

Since February 2020, when COVID fears spread around financial markets CSL has fallen more than 13 per cent - against the ASX200 index which has not only recovered but is 3.6 per cent ahead.

While there is an expectation that plasma collections will normalise to pre-COVID levels when the pandemic is gone, the various waves of COVID variations have raised serious concerns about when this will happen.

This is of particular concern in the US where vaccination rates are at less than 60 per cent.

Meanwhile, analysts had a generally muted response to the prospect of CSL acquiring Vifor.

Cit noted that if CSL raised $4 billion for the acquisition it would be earnings per share accretive depending on the price it paid and the discount at which it offered new shares.

Vifor develops, manufactures and markets products in iron deficiency, kidney-related and cardio-renal therapies. While CSL has products that treat kidney disease, the crossover between the two companies is not considered significant.

Macquarie also questioned the lack of product alignment between the two companies but agreed a deal would likely be earnings per share positive.

Maybe the prospect of diversity is actually the appeal for CSL whose earnings are heavily weighted to plasma products.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.