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Haemonetics Corporation (HAE), Pall Corporation (PLL), Grifols SA, Barcelona (GRFS): One Blood Management Company for Red-Hot Returns

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Revenue for the global blood processing products and consumables market is expected to grow at a compound annual growth rate of 8.9% over the next six years, reaching a market worth $49.16 billion in 2019. An increase in the aging population, the growing number of cancer therapies, and the rise in surgical operations are among a few of the reasons behind this growth.

Haemonetics Corporation (NYSE:HAE)

Haemonetics Corporation (NYSE:HAE), the market leader in the blood-collection equipment market with around 75% market share in the U.S., is best positioned to capitalize on this market growth. To continue registering growth in this expanding market, the company is focusing on developing innovative solutions for managing blood through an acquisition strategy.

Growth from plasma
Haemonetics Corporation (NYSE:HAE) expects growth opportunities from its plasma business, which is expected to grow significantly with long-term contracts. The company is betting on continued growth from its plasma and blood management segments, which increased its net revenue 24% year-over-year to $219.5 million in the first quarter of fiscal year 2014.

The plasma business currently accounts for around 30% of Haemonetics Corporation (NYSE:HAE)’ total revenue and also provides equipment for plasma collection. Around 98% of its plasma business is under contract until the third quarter of fiscal year 2015. One such contract includes a deal with Haemonetics Corporation (NYSE:HAE)’ major plasma customer, Grifols SA, Barcelona (NASDAQ:GRFS). Haemonetics Corporation (NYSE:HAE) will supply raw plasma to Grifols SA, Barcelona (NASDAQ:GRFS) for processing, which is further used in plasma therapies.

Grifols SA, Barcelona (NASDAQ:GRFS) acquired Talecris Holdings, the U.S.-based biotechnology company, two years back. The $3.4 billion acquisition made Grifols SA, Barcelona (NASDAQ:GRFS) the world’s leading provider of plasma therapies. Grifols SA, Barcelona (NASDAQ:GRFS) increased its number of plasma therapies after the acquisition, which increased its demand for raw plasma. As its primary supplier, Haemonetics Corporation (NYSE:HAE) fulfills this demand.

The global plasma market is expected to grow at a CAGR of 10.31% between 2012 and 2016, with the major growth taking place in the developed U.S. market due to increasing demand to treat autoimmune and neurological conditions. Autoimmune diseases arise out of an inappropriate immune response in the patient’s body against foreign substance or tissues present in the body.

Grifols SA, Barcelona (NASDAQ:GRFS)’ acquisition of Talecris will provide a long-term growth opportunity for the market leader. The cost synergies from the acquisition increased Grifols’ net revenue 4.9% year-over-year in the first half of 2013 to $1.6 billion from its bioscience division. The price of plasma has been rising over the last two years and is expected to continue rising as the U.S. plasma market expands.

Whole blood market
Whole blood is obtained through blood donation when no constituent like red blood cells, white blood cells, plasma, or platelets is removed. Whole blood management has not seen much improvement since 90% of the blood collected globally uses a manual process that includes record keeping, handling, and transportation. This provides ample opportunity for Haemonetics, which is working toward the improvement of existing processes through acquisition.

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