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Haemonetics: Cutting-Edge Innovation

Haemonetics makes products that are changing the way blood is collected, stored and donated.

By Battle Road Research, an equity research firm.



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(HAE) - Get Haemonetics Corporation Report

produces and develops products that are changing the way blood is collected, stored and donated.

Most people encounter a Victorian process when donating blood. They have a vein opened, allowing their blood to drip through tubing into a bag, which is stored in a cooler for transport. Even though blood traditionally has been collected "whole" like this, it is rarely given to patients in whole form.

But Braintree, Mass-based Haemonetics, with annual revenue of about $600 million and a market cap of $1.4 billion, manufactures devices that collect different blood components separately.

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As you probably know, blood is composed of a few important important components: plasma (a straw-colored medium for the other components), red blood cells (which deliver oxygen) and platelets (for clotting). A fourth component, white blood cells, is important to the body's immune system, but it cannot be donated from one person to another.

Of the three main components that can be transferred from donor to patient, plasma has yielded the most revenue for Haemonetics.

As a method of ensuring recurring revenue from its devices and eliminating high capital costs, Haemonetics will often place its equipment at blood banks or other collection centers and generate revenue from disposable products utilized in the devices.

Haemonetics' vertical integration across all facets of blood management is unique. The company manufactures a wide variety of products that aid in putting blood back into hospital patients. For example, the company has a product called OrthoPAT, which collects blood lost during and after orthopedic surgeries, cleans it, and transfuses it back into the patient. This reduces the need for donor blood for these operations, conserving it for trauma and other high-use needs.

In addition to its blood collection and surgery product segments, Haemonetics produces software to help hospitals and blood banks manage their blood supplies and equipment. Haemonetics has made several acquisitions of companies that produce these ancillary products.

The company manufactures a product called eLynx, which reads a barcode on a unit of blood and can determine all of the pertinent data physicians need in order to determine whether a patient should be administered the blood.

In the future, Haemonetics plans to introduce a new transport product, a combination server/refrigerator that regulates the temperature of the blood more effectively than a styrofoam cooler. It will also act as a database for the devices at the blood bank.

Blood is so important to medicine that it's almost inconceivable that its storage and collection haven't seen the kind of technological innovation that other areas of medicine have. But Haemonetics has established a portfolio of products that capitalize on that lack of innovation.

By Battle Road Research, Waltham, Mass.

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