Haemonetics Slumps as CSL Plasma Declines to Renew a Supply Pact
Posted on: Monday, April 19, 2021 By: KorchekStaff
About 12% of Haemonetics 2020 revenue came from a contract with CSL Plasma. CSL declined to renew the accord.
CSL Plasma is the Boca Raton, Fla., network of centers that pay donors for plasma donations. It's a unit of CSL Ltd., CMXHF the Melbourne, Australia, biotech company.
Once the current agreement expires in June 2022, CSL will no longer use the Haeomonetics PCS2 Plasma Collection System devices and will no longer purchase disposable plasmapheresis kits in the U.S.
CSL made the decision based on its own internal strategy and not on the quality of products or services, Haemonetics said.
"Haemonetics remains committed to supporting CSL in other geographies and capacities," accounting for about 1% of total company revenue in fiscal 2020, "and will continue to support CSL's plans to roll out NexSys PCS plasmapheresis devices in Europe" under a recently executed agreement, the company said.
"We have a longstanding relationship with CSL, and while we are disappointed by this decision we appreciate the advance notice," Haemonetics Chief Executive Chris Simon said in a statement.
The company's contract with CSL's U.S. plasma collection centers generated $117 million, or nearly 12%, of the company's total 2020 revenue.
Haemonetics expects to incur a $25 million one-time impairment charge relating to disposables manufacturing equipment and an estimated $7 million in additional expenses in the fourth quarter of 2021.
Shares of the Boston company at last check dropped 32% to $79.65.
The company said it believes in the value proposition of its devices and remains committed to delivering them to other customers.
Haemonetics also affirmed its expectation of an 8% to 10% average long-term growth in the U.S. source plasma-collections market.
"We have taken a series of actions over the past five years to strengthen Haemonetics' financial health and believe that our organization has the agility to navigate these changes," Simon said.
"We are confident in our ability to continue to generate positive cash flow as we pursue our strategies to deliver shareholder value.".