where to next?, page-74

Aus market will be relatively small whatever the outcomes with govt backing

The doctors are more important under the Austalian SAS and the AC8 outreach program and MDC's look the best structured and progressed

Offshore AC8 clearly has made the headway with South American initiatives

Why I like AC8 over CAN: C:AN is more focused as I can see on growing and that is not where value will be created - value will be created in distribution and branding IMO and again why relationships with doctors is key on Aus - again MDC and AC8 seem most developed in this regard

I have experience with US companies and the ones with best retail and branding are doing amazingly well, far better than growers who are finding increased capital costs to grow production and reducing margins

Offshore exposures and relationships will potentially be much more valuable but in the pure Australian context I think AC8 and MDC remain best placed

The Canadian parents may well look to increase their exposures in Aus in AC8 and CAN given the massive valuation differentials, issuing stock in Canada at huge valuations to buy cheap Australian entities makes sense - but I expect they are so busy executing Canadian strategies and working out how to compete in the US that Australian considerations are presumably well down the list of importance.

** That changes is product development here moves quickly which is typical of Australia and then the parent companies will almost certainly move to take out Australian business you may expect - look at product delivery technologies and clinical trials as a guide to when that may eventuate.

If Diageo is looking to gain a foothold into the sector as the recent Bloomberg article speculated, then they will be looking globally and Australian names that have performed poorly this year (all of them maybe except EXL) will all be evaluated in my opinion