COLLECTING PLASMA IN THE US:

ECOSYSTEM ANALYSIS, COST BENCHMARKING

& FORECAST TO 2032

May 2023

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 COLLECTING PLASMA IN THE US:

ECOSYSTEM ANALYSIS, COST BENCHMARKING

& FORECAST TO 2032

The contents of this study represent our analysis of information generally available to the public or released
by responsible individuals in the companies mentioned. It does not contain information provided in
confidence by our clients. Since much of the information in the study is based on a variety of sources (which
we deem reliable) including subjective estimates and analyst opinion, Marketing Research Bureau does not
guarantee the accuracy of the contents and assumes no liability for inaccurate source materials.

Copyright © 2023 by Marketing Research Bureau. All Rights Reserved. Published in the United States of
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Marketing Research Bureau

Phone: (425) 502-6265
Email: mhotchko@marketingresearchbureau.com

May 2023

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 Table of Contents
EXECUTIVE SUMMARY ................................................................................................................................ 8
1. Overview and History of Plasma Collections in the United States ....................................... 16
Therapeutic Role of Plasma-derived Drugs ................................................................................... 16
Historical Development of Plasma Collections in the United States .................................... 19
The early Years: From 1940 to 1970 ............................................................................................ 19
Industry Growth and the HIV Outbreak: From 1970 to 1990 ............................................. 20
From 1990: The Creutzfeldt Jakob Disease Setback and Market Expansion ................ 22
Vertical Integration in the Plasma Collections Industry 2000-2022 ................................ 24
COVID’s Impact on the Plasma Collection Industry .............................................................. 26
U.S./Mexico Border Disruption 2020-2022 ............................................................................... 28
CSL Departure from the Plasma Protein Therapeutics Association (PPTA)................... 29
Other Types of Plasma: Non-Profit Centers & Specialty Plasma ........................................... 31
Specialty Plasma ................................................................................................................................. 31
2. Current Plasma Collection Center Landscape .............................................................................. 35
Historical Number of Centers ............................................................................................................. 35
Overall Industry Collection Volumes................................................................................................ 35
Current Number of Centers ................................................................................................................ 36
Plasma Collection Landscape by Company ................................................................................... 37
Average Collection Volume Per Center .......................................................................................... 42
Changes in Donor Center Location and Strategy from 2020/2021 to today .................... 43
Collecting Plasma Cost Effectively .................................................................................................... 45
Average Number of Beds per Center .............................................................................................. 46
Average Bed Turn Rates ....................................................................................................................... 47
Average Collection Volume Per Donation & FDA Nomogram for Source Plasma ......... 48
Location Categories for Centers in the United States ............................................................... 51
3. Forecast of US Collection Centers and Collections through 2030........................................ 58
Assumptions for the Forecasts of Centers and Collections ..................................................... 58

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 Forecast of the Number of US Collection Centers to 2032 ..................................................... 62
Forecast of US Plasma Collection Volumes to 2032 .................................................................. 67
Challenges due to the growth in plasma centers ....................................................................... 71
Competition for good locations ................................................................................................... 71
Competition for donors ................................................................................................................... 72
The Quest for Talent ......................................................................................................................... 73
Seasonality............................................................................................................................................ 74
4. New Center Development ................................................................................................................... 76
Common attributes of new centers.................................................................................................. 78
Timeline of a Center’s Construction ................................................................................................. 79
Expansion Decision Process ........................................................................................................... 80
New Center Development Process .............................................................................................. 81
Staff Training and Opening ............................................................................................................ 85
Ramp up to capacity ......................................................................................................................... 87
Construction Costs ................................................................................................................................. 90
Furniture, Fixtures, and Equipment (FF&E) .................................................................................... 90
Freezers .................................................................................................................................................. 91
Other Equipment ................................................................................................................................ 92
Supplies ................................................................................................................................................. 92
5. Regulatory Environment ...................................................................................................................... 94
An Introduction to Standard Operating Procedures (SOPs) ................................................... 94
Federal Regulations................................................................................................................................ 95
Industry Certifications (PPTA) ............................................................................................................. 96
CSL Leaves PPTA’s IQPP in 2022 ................................................................................................... 97
IQPP Standards .................................................................................................................................100
State Regulations ..................................................................................................................................103
6. Purchase Price of Source Plasma and Plasma Collection Assets .........................................105
Current and Historical Price of Source Plasma ...........................................................................105

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 Details Affecting Source Plasma Pricing: ......................................................................................107
Pricing of Applicant/Orphan Donor Plasma................................................................................111
Price of Recovered Plasma ................................................................................................................112
Price of plasma for specialty/hyperimmune products ............................................................113
Cost of buying production assets (Centers) ................................................................................114
7. Cost to Collect a Liter of Plasma and Forecast to 2032: .........................................................117
Current costs to collect a liter Plasma ...........................................................................................117
Cost Components – Definitions and Values ................................................................................120
Donor Compensation .....................................................................................................................120
Staffing Costs.....................................................................................................................................122
Testing Costs .....................................................................................................................................123
Soft goods/Kits/Disposable Costs .............................................................................................125
Medical Supply/Hazardous Waste Costs.................................................................................126
Software/Automation Costs .........................................................................................................127
Center Overhead Costs ..................................................................................................................127
Forecast of Costs to Collect a Liter of Plasma to 2032 ............................................................128
Assumptions for the Forecast of Cost Components to Collect Plasma........................128
Overall Cost to Collect a Liter of Plasma .................................................................................134
Donor Compensation Forecast ...................................................................................................135
Staffing Costs Forecast ...................................................................................................................138
Center Overhead Forecast ............................................................................................................140
Product Testing Costs Forecast...................................................................................................142
Soft goods/ Kits/ Disposables Forecast ...................................................................................144
Medical Supplies/Hazardous Waste Forecast ........................................................................146
Software Forecast.............................................................................................................................147
8. Donation Process..................................................................................................................................149
Donation Process Steps ......................................................................................................................149
Average Process Times .......................................................................................................................153

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 General schedule considerations ....................................................................................................155
Scheduling ...............................................................................................................................................155
Staffing......................................................................................................................................................156
Key Plasma Collection Center Roles ...............................................................................................159
9. Collection Devices ................................................................................................................................163
Technological Approach to Apheresis ..........................................................................................163
Haemonetics ...........................................................................................................................................164
PCS2 ......................................................................................................................................................166
NexSys PCS .........................................................................................................................................167
YES Technology ................................................................................................................................170
Persona ................................................................................................................................................172
Fresenius Kabi ........................................................................................................................................174
Aurora...................................................................................................................................................176
Aurora Xi .............................................................................................................................................178
Response to YES Technology and Persona ............................................................................179
Recent and Potential New Entrants................................................................................................181
Terumo BCT........................................................................................................................................182
Scinomed ............................................................................................................................................185
10. Software (BECS/DMS) .......................................................................................................................186
BECS/DMS Software from the Collector Point of View ...........................................................187
Haemonetics ......................................................................................................................................187
Mak Systems ......................................................................................................................................191
Internal BECS Systems .........................................................................................................................194
Potential New Entrants .......................................................................................................................195
11. Plasma Sample Testing ....................................................................................................................196
Testing Vendors.....................................................................................................................................199
QualTex ................................................................................................................................................199
Internal Testing capabilities..........................................................................................................200

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 National Genetics Institute (NGI)/ LabCorp............................................................................200
Creative Testing Solutions (CTS) .................................................................................................201
Causes of delays in testing ................................................................................................................203
12. Debit Card Vendors/Donor Compensation Payments .........................................................205
Onbe (Formerly Syncapay, Wirecard North America, and Citi Prepaid Card Services)207
Paysign ......................................................................................................................................................208
13. Shipment and Storage .....................................................................................................................209
BioPharma Logistics (BPL) ..................................................................................................................211
RxCrossroads (now owned by McKesson) ...................................................................................211
14. Marketing..............................................................................................................................................212
Channels to Market ..............................................................................................................................213
Appendix: Plasma Collection Organizations ...................................................................................215
Independent Collections Companies.............................................................................................215
Collections Companies who are part of Integrated Fractionators ......................................218

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 EXECUTIVE SUMMARY

* The collection of plasma by apheresis in the United States has risen from humble
beginnings in the 20th century to a large, organized and highly regulated industry
that collects over 60% of the world’s plasma used for fractionation into therapeutic
purified plasma proteins. The growth in plasma collections has been the result of
the plasma therapies’ strong growth over the past few decades, with collections in
the United States uniquely supporting much of the increase. Along the way, the
industry has faced a number of challenges. As it has adapted to continuously
improve the safety and security of the source material for these proteins, the
complexity and cost has become an ever-greater concern. This report serves as a
guide to the most important aspects of this changing and growing industry, from
plasma center operations to costs of collecting plasma to a forecast for the future.

* By the end of 2022, there were 1,123 FDA licensed centers in the United States, a
gain of 78 centers from a year earlier and up from 833 centers in 2019. The growth
rate was 7.5% in 2022 from the year before, a slower pace than the past 6 years.
The 5-year average annual growth rate (CAGR) was 10.8%, as companies have built
many centers to grow their collections volumes. CSL Plasma had the most centers
at the end of 2022 with 319, or 28% of the total. Grifols, when adding in its acquired
centers over the past few years, operated the second highest number, with 290, or
26% of the total. Takeda (through BioLife) had a 17% share and Octapharma had
15% share, while Kedrion/BPL combined had 5.5%. The remaining independent
collectors and small fractionators combined for 7.6% share, up from just 3% in
2020.

* Most centers used to be designed to generate 70,000 to 90,000 liters of plasma

per year if it turned out to be a great location, even though the average volume
collected is between 45,000 and 55,000 liters. Now, most centers are designed to
collect 50,000 to 70,000 liters and actually collect 35,000 to 45,000 liters on average.
A smaller center design is becoming more popular, especially among independent
collectors, with the goal of collecting just 25,000 to 35,000 liters per year. The
average number of donor beds per collection center in the MRB survey was 42 in
2023, with a range of 30 to 66 beds (with a few outliers up to 90 beds) down from
an average of 48 beds in 2020. The average bed turn rate per day in the United
States is 5.6 times per day in early 2023 with a range seen of 3.75 to 6.8, based on
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 five working days a week metric. It was 5.5 times per day in 2020, so it has
marginally increased in 3 years as collectors have increased efficiency in utilizing
the devices placed in centers. There are four main categories of collection centers
based on location and donors’ demographic characteristics: 1) College centers 2)
US-Mexico border centers 3) Suburban centers and 4) Urban centers. Each have
specific challenges and opportunities, and most recently, different situations
coming out of the pandemic.

* A total of 1,206 centers are forecast in 2023, based on an analysis and review of all
the companies operating plasma centers, a 7.4% growth over the previous year, or
a gain of 83 centers. Average growth of 92 centers per year is expected from 2023
through 2032, resulting in a total FDA licensed center count of 2,046 in 2032. The
average collections per center went from 53,000 liters in 2019 to 35,200 liters in
2021 due to effects of the pandemic, but rebounded to 40,000 in 2022. An average
of 42,600 liters is expected in 2023, but going forward it will decline about 1-3%
per year due to newer centers being smaller, new centers opening in less optimal
locations, and cannibalization from other centers in the same area. By 2032, the
average collection per center is forecast to be 37,000 liters, or about 70% of the
level achieved in 2019. The 2032 volume of 75.8 million liters results in a total
collection of 211 liters per thousand population in 2032, up from 136 liters in 2022,
a per capita increase of 55% in 10 years.

* Source plasma collections in 2022 totaled 45.0 million liters, an increase of 22%
(8.2 million more liters) from 2021. This was higher than the pre-pandemic total in
2019 by 1.9%. The reasons for this increase are many and relate to the end of the
pandemic and government stimulus measures, the reopening of centers along the
US-Mexican border, and macroeconomic factors including high inflation, interest
rate increases, and elevated energy prices. In 2023, collections are expected to
grow 14% over last year, and reach 51.3 million liters, or a growth of 6.3 million
liters as companies measurably increase their plasma inventories. In 2024,
collections are forecast to grow just 3.9% to reach 53.3 million liters, as companies
will have sufficient (or even excess) inventory levels and only need to grow closer
to the global IG growth rate. The years 2025 and following are likewise forecast to
grow close to IG demand growth rates. A total of 75.8 million liters of plasma is
forecast in 2032, which is 68% more than in 2022, and an average growth rate of
5.3% per year from 2022 through 2032. When comparing the growth from 2019 to
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 2032, the CAGR is 4.2%, a lower figure showing the lasting effect of the pandemic
on the industry.

* The average cost to collect a liter of plasma in the United States in late 2022 was
$207.7 per liter, and ranged from $171 to $245 per liter, based on a survey of
plasma collectors for this report. The most important component of this was donor
compensation, which averaged $93 per liter, or 45% of the total cost in 2022. This
was up from $65/liter in 2020, or up 19.6% per year. Staffing was $32.5/liter (16%
of total cost) and Center Overhead was $30.0/liter (14% of cost). Testing (NAT,
VMT, etc.) was the fourth most expensive cost at $23.5/liter (11% of cost).
Softgoods/disposables were $18.4/liter (9% of cost), and the medical supplies/
hazardous waste and software costs totaled $10.3/liter (5% of cost). Corporate
overhead is not included in this cost, as it varies widely by the size of the collection
company.

* Between 2020 and 2022, the cost of collecting plasma rose substantially (up 28.6%)
as a result of many trends made worse by the pandemic. The average was just
$161.5 per liter in 2020, resulting in an average cost growth of 13.4% per year. In
2023, the costs to collect plasma will drop to $196.6/liter, or down 5.3% from 2022.
Costs fall especially due to lower donor compensation, as the economy softens,
there is no government stimulus, interest rates rise, and some people feel worried
about their economic situation. Donor compensation is forecast to be $83/liter in
2023, down $10 per liter in one year. In 2024 and future years, it is expected to
begin rising again. By 2032, the average donor compensation is forecast to be
$119.6/liter, or 29% higher than it was in 2022. This rise is driven by the need to
collect ever larger volumes of plasma, and the need to widen the pool of donors
to additional socio-economic groups to incentivize them to donate, pushing up
donor compensation. This is compounded by the competition as more and more
centers compete for a limited supply of high frequency donors. Overall, the total
cost to collect a liter of plasma rises from $207.7 in 2022 to $262.0 in 2032, an
average annual rate of 2.6%, or much lower than the past 3 years. Donor
compensation is 46% of the total cost to collect a liter of plasma in 2032, up from
40% in 2020 but similar to the 2022 rate of 45%. Other components collectively
increase at an average rate of 2.2% per year from 2022 to 2032, leading to an
overall collection cost growth rate of 2.4% per year from 2022 to 2032.

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* While most source plasma is used by the company that collects it for their own
fractionation, there is a market for the buying and selling of plasma. In early 2023,
the average cost for a contract to buy fully tested plasma was $219 per liter. This
average was a 10.6% increase from early 2021, or 5.2% per year. Prior to the
pandemic, prices had been rising at a 2-5% per year rate. The expectation is that
prices to purchase source plasma will fall in 2023, along with the falling cost to
collect the raw plasma. However, once the bulge of collections in 2023 is finished,
prices are expected to rise at a similar rate as the costs, or about 2-3% per year on
average in the next decade. Hyperimmune plasma, which is needed in only small
quantities and often requires extra vaccinations of the donor, is sold for much
higher values, up to $700 per liter, depending on the specific product. US recovered
plasma was sold at over $189/liter in 2023, up 26% from two years earlier.

* Given the nearly doubling of centers in the last 6 years, most of the “best” locations
in the United States have been taken. This means that new center development has
become an acute business challenge for collectors and fractionators. From a
strategic perspective, most collectors had focused on large centers to increase their
flexibility and capacity to accommodate higher donation volumes during surge
times through the day and week. More recently, given the snap back in collections
volumes and the elevated cost to collect plasma, collectors have shifted their focus
from collecting as much supply as possible to cost efficiency. This change along
with the competitive dynamics of the industry, has led collectors to adjust their
model to build smaller centers, which can fit in a smaller retail footprint that may
be more cost effective, especially in a smaller city or in an urban area further way
from other collection centers. The average center collected over 53,000 liters per
year in 2019, but it dropped to just over 35,200 liters in 2021 before rising to 40,100
liters in 2022. The overall process of developing a new center through to maturity
takes 3.5 to 5 years with pre-collection timelines taking an average of 15.5 months.
Once a center is opened it takes on average 32 months to ramp up to full capacity
with a range of 18 to 42 months with most falling between 28 and 40 months.

* The plasma industry is highly regulated at the federal, state and sometimes even
international level to ensure both donor and plasma product safety. Plasma centers
are inspected by the U.S. FDA, by state regulatory agencies, and by election, the
PPTA- Source staff if a center wishes to earn the “International Quality Plasma
Program” (IQPP) certification. The FDA regulates and approves Standard Operating
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 Procedures (SOPs) governing every aspect of center operations and inspects each
center before awarding an FDA license. IQPP is an industry standard that exceeds
federal FDA standards and was required to sell plasma to nearly all global
fractionation companies. IQPP defines such standards as who can donate
(Qualified Donors), personnel training, center appearance and viral marker rates of
donors. Previously, almost all plasma collectors chose to be part of PPTA Source
and get IQPP certification for their collection centers, but in August 2022, CSL
decided to leave the industry organization and with it, the IQPP certification. The
ramifications of this decision are still not fully felt in early 2023. Some states have
more restrictive standards for employee certifications or management personnel
which restrict efficient operations of a plasma center in that state.

* The current average door in/door out time for applicant donors across the industry
was 170 minutes with a range of 140 minutes to 190 minutes in early 2023, up
significantly from an average of 125 minutes in 2021. The average door in/door
out time for repeat donors is 98 minutes with a range for 80 minutes to 105
minutes. This is up from an average of 87 minutes two years earlier, as staffing
issues have led to more congestion and slower times. As staff gain more
experience, overall staffing shortages are resolved, and technological
developments and rollouts in apheresis devices are executed, it is anticipated that
these times will improve and shorten in the coming years.

* Plasma collection or apheresis devices are one of the most important components
of the plasma value chain. There are three companies that currently manufacture
and operate these devices. Haemonetics is the market leader with 69% market
share, followed by Fresenius Kabi with 30% share and new entrant Terumo BCT
with <1% share in early 2023. From a business model perspective all these
companies have a “razor blade” or placement approach to the market where
collection devices are deployed into centers and collectors pay for soft
goods/disposables per donation, with a required usage per device established as
a floor. Haemonetics has two devices actively operating in the market. The PCS2
which was first deployed in 1994 and has an average donation time for a typical
880ml donor of 45 minutes, but it has been phased out of use aside from one
customer that is shifting to Terumo’s device. The newer device, the NexSys PCS
was deployed in 2018, has a 42-minute average donation time for the same type
of donor and is now the main device deployed to all Haemonetics customers aside
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 from CSL. Fresenius Kabi has two devices deployed in the market, the Aurora which
was deployed in 2012 and has an average donation time of 52 minutes for a typical
880ml donor, and the Aurora Xi which was deployed in 2018 and has a 38-minute
average donation time for the same type of donor. Fresenius Kabi is planning on
offering both the Aurora and the Aurora XI devices to the market going forward.
Terumo BCT has one device in the market, the Rika which was first deployed in
2022 and has an average 34-minute donation time for the same type of donor
though the device has not yet been deployed at scale and this time is based on a
small sample size.

* The industry is currently in the middle of a shift from older devices to new devices
with updated hardware and software capabilities. These new devices are
Haemonetics’ Nexsys, Fresenius Kabi’s Aurora Xi, and the latest entrant, Terumo
BCT’s Rika. The major changes seen in these newest devices center on improved
donor and operator interfaces/experiences, improvements in collection speed, and
most importantly, having the ability to increase yields of plasma collected during
each donation. Most recently, the time advantage claimed by Terumo’s Rika device
brings back the donation time as a differentiator between machines. Haemonetics
is expected to release an update to Nexsys that will significantly improve donation
times. Larger plasma extraction volumes on any machine will take longer than
smaller volumes.

* Haemonetics was the first to market with improvements in the software that runs
on the new device thus allowing collectors the ability to increase the volume
collected while keeping in line with FDA nomogram guidance. The first product
Haemonetics launched was YES technology, which calculates how much
anticoagulant is in the bottle and adjusts the collection volume accordingly to hit
the FDA established nomogram. The second offering from Haemonetics is Persona,
which customizes plasma collection based on an individual donor's body mass
index (BMI) and hematocrit. Persona has been found by a Haemonetics study to
increase plasma yields by 9 to 12%, and in our model we assume 8.5% volume
enhancement. Fresenius Kabi has also released functionality called the “Optimized
Nomogram” that is similar to YES and calculates the anticoagulant in the bottle.
Fresenius is also working on a personalized nomogram option, but it has not been
released commercially. Finally, Terumo BCT will also offer a similar product on the
Rika system, though it has not been publicly revealed regarding its specifications.
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 From an uptake perspective, our forecast model assumes that 17% of apheresis
devices will have switched to the new higher nomogram products by the end of
2023, 35% more of the market will switch each year in 2024 and 2025, followed by
a final 10% in 2026 to reach a total of 97% of the market covered by the end of
2026. The 3% of the remaining devices will likely either continue to utilize the older
generation machines from Fresenius Kabi, or use the newer devices with the
personalized nomogram functionality turned off.

* The software that was first called the Blood Establishment Computer System (or
BECS) by the FDA has, over the last 10 years, morphed into the driving force behind
the entire plasma donation process it is today. BECS systems are what enable the
donation process to be entirely paperless with significant increases in efficiency
and a decrease in quality exceptions. This has been a key area of innovation in the
industry of late and software will continue to drive changes to the process and the
industry as a whole. The main vendor of BECS systems is Haemonetics with their
DMS and NextLynk DMS offerings. MAK Systems has operated with their
ePROGESA product in the past but now has no market share in the United States
at present. Of late, large plasma collectors have moved to develop their own
internal BECS system that they can control, because it is a key differentiating factor
and can drive competitive advantages in cost control and features/benefits. The
disadvantage is the significant investment in time and money to develop a
competitive BECS system and acquiring the software engineering talent needed to
maintain and update it. Still, given the critical nature of the software in improving
cost and efficiency at centers, it is increasingly too important to have outside
vendors control this, at least from the largest collectors’ perspective.

* Sample testing remains a critical step in the plasma collection process and is
required for every single donation. How quickly sample test results are received by
collectors have measurable implications for collectors’ profitability and overall risk
levels. The current average turnaround time for test results is 6 days with a range
of 3 to 9 days. This is one less day on average than was found in 2020, with the
pandemic slowing down logistics. The main testing vendors are Qualtex (the
dominant third-party testing vendor), National Genetics Institute (NGI), and
Creative Testing Solutions. In addition, most large collectors have their own testing
capacity and attempt to tread a fine line of achieving cost savings by running their

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 own testing operations, but also engaging third party vendors to reduce
concentration risk on just their own facilities.

* Donors are compensated on debit cards that are loaded with the compensation
that is earned. The main vendors in the space are Onbe (formerly
Syncapay/Wirecard), and Paysign (formerly 3Pea). These vendors either charge fees
to donors as they use their cards, charge fees to the collectors or some
combination of the two. BECS integration is offered by both of these vendors.

* Shipment, storage, and general supply chain logistics for collectors are typical run
by internal groups inside the collectors’ organizations with varying levels of
support from one of two main vendors in the space, BioPharma Logistics, or
RxCrossroads (now owned by McKesson).

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1. Overview and History of Plasma Collections in the United States

Therapeutic Role of Plasma-derived Drugs

Plasma is the yellow colored, transparent liquid portion of blood that remains after red
blood cells, white blood cells, platelets and other cellular components are removed. It is
the single largest component of human blood, with about 55-58% percent of the total
volume, and contains water, salts, enzymes, antibodies and other proteins. 90% of plasma
is made up of water. Over 3,000 proteins exist in human plasma, of which about two dozen
are currently commercialized.

Main commercialized therapeutic drugs extracted from plasma

o Immunoglobulins, including hyperimmunes, IVIG & SCIG
o Albumin,
o Clotting factors (factors I, II, V, VII, IX, X, XI, XII and XIII and VWF),
o Alpha-1 antitrypsin (AAT)
o C1-esterase inhibitor (C1-INH),
o Antithrombin III (AT-III),
o Protein C,
o Fibrinogen,
o Thrombin
o Hemin and
o Others in the future (plasminogen, HDL)

Main Diseases treated with plasma-derived therapies

o Immunoglobulins: Primary Immune Deficiencies (PID), Chronic Inflammatory

Demyelinating Polyneuropathy (CIDP), Immune Thrombocytopenia (ITP),
Multifocal Motor Neuropathy (MMN), Multiple Sclerosis (MS), etc.) fibromyalgia,
epileptic seizures, neurological conditions, autoimmune conditions. Over 200
diseases have been successfully treated with immunoglobulin.
o Hyper-immunoglobulins are used to treat rabies, hepatitis A or B, tetanus
exposure, etc. RhoD immunoglobulin is used for Hemolytic Disease of the
Newborn (HDN) disease and to prevent spontaneous abortions

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 o Albumin: Volume replacement due to blood loss (trauma, surgery), cardiac
surgeries (heart attacks), liver diseases (cirrhosis, liver cancers, hepatitis infections,
alcoholism, NASH)
o Clotting factors (factors I, II, V, VII, IX, X, XI, XII and XIII and VWF): Respective
deficiencies in these clotting factors leading to hemophilia, also can be used in
bleeding cases (warfarin reversal for prothrombin complex concentrates)
o Alpha-1 Antitrypsin (AAT): Deficiency in AAT protein causing COPD, possibly for
other diseases such as Type 1 diabetes or transplantation
o C1-Esterase Inhibitor (C-1 INH): A deficiency in C1-INH causes Hereditary
Angioedema,
o Antithrombin T-III (AT III): a deficiency in AT-III protein or blood loss situations
may cause life-threatening hematologic complications
o Protein C: Deficiency in Protein C protein, or blood loss situations
o Fibrinogen: Deficiency in Fibrinogen protein or as a wound healing agent
o Thrombin: Deficiency in Thrombin protein or as a wound healing agent

Source Plasma
Source plasma is plasma that is collected from healthy, voluntary donors through a
process called plasmapheresis and is used exclusively for further manufacturing into final
therapies (fractionation) in the United States. Source plasma donors may be compensated
for their commitment.

Recovered Plasma
Recovered plasma is collected through whole blood donation in which plasma is
separated from its cellular components. Recovered plasma may be used for fractionation.
For its part, the volume of recovered plasma has slowly declined over the past decade,
and it is expected to continue declining in the coming years because of slowing blood
collections, at about a 15% decline over the past decade.

Difference between “Source” and “Recovered” plasma:

Recovered plasma is non-remunerated almost everywhere in the world, and can be
donated every 8-12 weeks, while source plasma is more often remunerated
(compensated) and donated up to twice a week in the US. Whole blood donors typically
donate 400 to 600 ml of blood, up to 6 times per year. Source plasma donors can donate
up to 880 ml (or even higher depending on the nomogram calculation used) up to a

17
maximum of 104 times per year in the United States and 26-60 times per year in other
countries.

Specialty Product
While specialty products have only a fraction of the volumes of Source and Recovered
plasma, they are a strong profit driver for collectors and are growing in sales.

Differences between plasma-derived and other pharmaceutical therapies:

The main difference is the starting material used to make these drugs. Pharmaceutical
drugs are made from chemical reactions using non-biological raw material, while
biologics are made from controlled bacterial, animal or human cells in large tanks. Both
non-biological and biological raw materials must be purified from their respective
sources. Plasma-derived drugs start from the plasma collected from many people, and
the donors do not live in a controlled manufacturing environment unlike the starting
material for nearly all other pharmaceutical products, whether biological or not. The
volume of plasma available for manufacturing plasma-derived drugs is limited by the
ability and willingness of people to donate blood or plasma, whereas chemical and
biological-based pharmaceuticals have essentially unlimited starting material.

Overview of Plasma Fractionation

• Before donating plasma, all donors are screened to minimize the risk of
communicable and blood-borne diseases. All plasma is tested for viruses such as
HIV, Hepatitis A B, and C, and Parvovirus B19. The plasma is frozen and shipped to
a central warehouse for storage. Then, it is transported to the fractionation facility,
thawed and mixed with thousands of other donations. Among the technologies to
fractionate plasma, the “Cohn” process is the most common. It consists in
separating different components of the plasma called "fractions:" fraction I, II, III,
IV and V through the addition of ethanol, and salt and by changing the pH and
temperature. The immunoglobulins are found in fractions I, II and III, fraction IV
contains AAT and AT III, and fraction V, albumin. Before this successive separation
steps, however, a first component is removed from the plasma: called
"cryoprecipitate," it contains factor VIII and fibrinogen.

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 • The beginnings of the plasma industry go back to the second World War, when
plasma-derived albumin was administered to burned soldiers after the attack on
Pearl Harbor with good clinical outcomes. The fractionation of plasma was
developed in the United States by Dr. Edwin Cohn, of Harvard University in the
1940s, while other scientists in Europe, Asia and Australia expanded on his
techniques or developed different ones to set up plasma fractionation facilities in
their own countries.

• Due the regulations on donation frequency and volume, as well as the legal
authorization to remunerate donors, over two thirds of the world’s source plasma
is collected in the United States.

Historical Development of Plasma Collections in the United States

The early Years: From 1940 to 1970

Albumin, the first plasma-derived therapeutic protein extracted and purified from plasma,
was extensively used during the second world war, and its demand continued to grow
afterwards. Several pharmaceutical companies embarked into this new manufacturing
activity (Abbott, Armour, Cutter, Dow, Hyland, Lederle, Merck, Squibb, etc.) using mainly
plasma supplied by the American Red Cross.

The production of other plasma proteins in the 1950s, such as the hyperimmune globulin
preparations, and of coagulation factor VIII in 1966 expanded the scope of the plasma
fractionation industry for the benefit of thousands of patients in the US and elsewhere.

However, in the early years, the supply of plasma for fractionation faced several issues,
including:

- Lack of coordination among the blood collection organizations: (American Red Cross,
independent, non-profit blood centers, and commercial blood banks,)

- Scant blood regulations, leaving each supplier to develop its own collection procedures
and standards,

- Controversy over donor compensation fueled by the co-existence of non-profit and

commercial blood banking sectors, and, more importantly,

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- Contamination of blood and blood products, especially with hepatitis B,

While no reliable statistics on plasma production and fractionation were available, due to
the absence of data centralization, it was estimated that, by 1970, "well above six million
pints of blood [were collected] annually" (Blood, by Doug Starr, page 207) and 3.2 metric
tons of albumin were used in the US that year (MRB 1976 United States report).

During the first twenty years, dozens of plasma centers dedicated to source plasma
collection opened. Many were set up by individual entrepreneurs, some of whom already
operated private blood banks, a few others with the support of fractionation companies.
The automated plasma machines, introduced in the mid-1980s bought another level of
efficiency to plasma collections.

Industry Growth and the HIV Outbreak: From 1970 to 1990

A number of structural changes occurred in the blood and plasma space during this
period of growth. By 1978, the volume of plasma fractionated in the US had grown from
an estimated 540,000 liters in 1970 to 3.65 million liters in 1978, a large part of which was
recovered plasma.

- Adoption of a National Blood Policy by the Federal Government in 1973 and the
ensuing enactment of FDA regulations governing good manufacturing practices in
the collection, processing, and storage of human blood components.

- Creation in 1971 of the American Blood Resources Association (ABRA) "a trade
association founded to represent the plasma collection and fractionation industry in
both federal and state government relations . . . to educate the public at large about
the commercial plasma and plasma products industry . . . to promote and encourage
research, to foster and monitor the promulgation of reasonable and just
regulations." Its memberships soon operated over 80 percent of the U.S. commercial
plasma collection facilities." ABRA's actions resulted in a significant improvement of
the safety and efficacy of source plasma collections in the US, in particular for donor
screening. Many of today's standards stem from ABRA's efforts at that time. In 2001,
ABRA merged into a new organization called "Plasma Proteins Therapeutic
Association (PPTA)," becoming its "PPTA source." In 1991, in an effort to improve the
quality and safety of the source plasma, especially for foreign customers concerned
about the remuneration of plasma donors, ABRA set up a program called “Quality
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 Plasma Program” (QPP). This program, which was initially voluntary, soon became
mandatory for all the ABRA members.

- In early 1983, "the AIDS hysteria began in the major metro markets of San Francisco,
New York, Miami and Los Angeles . . . intensified by the media." The resulting impact
was a major traumatic situation for the treatment of hemophilia patients, and a
setback for the fractionators . . . as elective surgeries were cancelled, and patients
reduced their consumption of clotting factor to "reduce the risk" of contracting AIDS.
... The market declined sharply for several months." Additionally, the fractionators
had to recall their factor VIII products (MRB US-PFM-1988).
- Blood and Plasma collections were hampered by the fear of AIDS as donors were
not as eager to give for fear of catching the disease. This caused the supply of plasma
to drop, and the price of plasma to climb.

- The emergence of the human immunodeficiency virus (HIV) in the early 1980s
reinforced the need to ensure the safety of the blood supply, for both transfusions
as well as for the plasma industry. To this end, some categories of donors were
banned from donating blood or plasma (gay men, Haitian nationals, etc.) and each
unit of blood was tested for HIV, beginning in 1985, using incrementally more
accurate tests. Today, HIV is detected by Nuclear Acid Testing (NAT), a highly reliable
and robust detection procedure.

By mid-1986, the majority of US blood banks and plasma collection centers also
implemented testing for "Hepatitis non-A non-B" (renamed "Hepatitis C" a few years later)
using the Hepatitis B core Antigen (Anti-HBc) and Alanine Aminotransferase Levels (ALT).
These two tests increased the production cost of plasma by an estimated 6% and resulted
in a 7.5% loss of donors at the time.

From the early 1980s, the FDA mandated the fractionators introduce virus inactivation
methods into their manufacturing process, notably for factor VIII concentrate, which is
made from up to 80,000 plasma donations. The inactivation methods included "dry" or
"wet" heating (Alpha Therapeutics), steam-heating (immuno/Baxter), and virus
elimination by monoclonal antibodies (Armour, Baxter). Additionally, treatment with
solvent detergent was added to inactivate lipid-enveloped viruses.

21
These methods increased the cost of producing factor VIII, resulting in drastic price
adjustments, from about 15¢ per unit, to 55¢ for some products. As they cut its production
yields almost by half, from approximately 250 IU to 100 IU per liter, the total production
fell by 17% in 1988 over 1987.

They also had a major impact on plasma collections: from that point on, the industry's
emphasis shifted from albumin to factor VIII, which became the market driver. "In 1974,
fraction V products (albumin and plasma proteins fraction or PPF) accounted for 69% of
the market value and represented 24% of total revenues fourteen years later (1988) . . .
Conversely, factor VIII concentrate, which represented 14% of the total market in 1974,
accounted for 31% in 1988. It is significant to note the rapid growth of IVIG, which
represented nearly 5% in 1984, up to 24% in 1988" (MRB- US-PFM 1988).

Another event which impacted the market was the Japanese government's decision in
1986 to become self-sufficient in its procurement of plasma derivatives. This decision
caused albumin imports to Japan to fall abruptly, and its price to tumble while inventories
built up, making sales of factor VIII and IVIG even more important for the fractionators
(IVIG was sold for $32.5 per gram on average at the time).

From 1990: The Creutzfeldt Jakob Disease Setback and Market Expansion

In the early 1990’s, the plasma supply became increasingly tight as a result of the
continued demand for plasma-derived products, both in the U.S. and abroad. In particular,
the consumption of IVIG was growing at a strong pace, requiring higher quantities of
plasma. The demand for cryoprecipitate remained healthy even though plasma-derived
factor VIII was gradually displaced by recombinant factor VIII in the United States
introduced in 1992, and Western Europe. By 1993, IVIG had supplanted factor VIII as the
global market driver.

In the last decade of the millennium, the fractionation plants ran at full capacity in order
to produce as much IVIG as possible. As a result, some plants no longer complied fully
with the good manufacturing practices (GMPs), which caused manufacturing incidents
and failed batches. In 1997, several fractionation plants were either shut down or slowed
down as the FDA required them to comply with the GMPs.

22
As a result, the fractionators reduced their source plasma collections by over 20% between
1996 and 1998, causing a severe shortage of IVIG in the U.S. and elsewhere. This in turn
triggered an outcry of patients which led to a Congressional Inquiry (The "Shays"
Commission). To end the shortage, the FDA relaxed the pressure on the fractionators to
allow them to return to normal production levels. As a result, the collections went back
up from 1999 onward but a glut of IVIG soon emerged, and IVIG prices tumbled.

In Europe, at the same time, the Creutzfeldt Jakob Disease (CJD) began to threaten the
plasma supply, in particular in the United Kingdom, and France. Since the European
plasma was believed to be at risk of CJD transmission for some time, the foreign
fractionators purchased US source plasma in large quantities. In 1998, the United
Kingdom's National Health Service acquired an entire plasma collection organization
(DCI) to supply the Blood Products Laboratory (BPL), its government-owned fractionation
plant.

The CJD epidemic, which took some time to be understood and resolved, caused
significant uncertainty on the safety of the plasma supply, particularly of the European
plasma. This prompted several fractionators to acquire independent US plasma collection
organizations to ensure that they would have a safe supply in the long run, and that they
would control plasma collection costs, which were expected to rise. This would also
mitigate the cyclical pattern and uncertainties of the plasma supply/demand balance. This
was a turning point in the industry, as since the late 1990’s, the plasma collection and
plasma fractionation industry has become highly vertically integrated such that over 95%
of the plasma collection centers were owned by fractionation companies by 2020. Before
2000, the plasma collectors and plasma fractionators were two distinct businesses. While
there was much overlap in terms of business supplier/buyer relationships they were not
consolidated, vertically integrated businesses. Today, with high vertical integration, the
industry can better control costs and avoid swings of over-or-under collecting, though
unforeseen events such as the COVID19 pandemic still cause the industry to face logistical
collections challenges.

The CJD epidemic had also the effect of causing multiple recalls of products made from
donors who were found to be carrying the disease after their blood or plasma donations.
As these recalls grew to sizable amounts of lost revenues, the fractionators were
encouraged to merge and to integrate vertically in order to become more efficient and
remain profitable. Many of the smaller fractionators, particularly in Europe, closed down,
23
due to the low price of albumin and slipping prices of other products, as well as the
difficulties to maintain compliance with the ever-changing GMPs.

Vertical Integration in the Plasma Collections Industry 2000-2022

Today, the vast majority of the US plasma centers are no longer independently- owned
but owned and operated by the fractionators. Plasma is no longer traded as it was in the
1980s, reaching a high price in case of shortage and being offered at a low price in periods
of glut. The fractionators can determine with acceptable accuracy the production volumes
they need, globally and from each of their plasma centers. To increase production, they
can open their centers' doors longer and increase donor compensation, and vice versa to
reduce production. When there is an economic slump, people who are unemployed or
have financial difficulties may donate plasma more frequently to make ends meet. It is
thus easier for centers to reach their company collection goals in times of high
unemployment, absent any over-compensation from government assistance programs.
Conversely, in times of economic growth, if there is full employment, fewer people need
to supplement their income by donating plasma. During these times, the fractionators
may need to increase donor compensation to encourage more plasma donations.

This shift has had a significant impact on the fluctuations in the price of plasma as well as
the amount of product that flows between companies. Prior to vertical integration, the
plasma market was subject to multiple boom/bust cycles which saw significant
fluctuations in the price of plasma as fractionators product needs waxed and waned (as
outlined in detail above). Now that the market has consolidated, there have been far fewer
fluctuations in terms of plasma price per liter. In addition, as can naturally be expected
with vertical integration and the acquisition of “independent” (non-fractionator owned)
collection businesses, the volume of plasma that is trading is a small fraction of what it
used to be. In general fractionators are less likely to overcommit from a purchase contract
perspective first because they set their own demand from a fractionator standpoint.
Second, they look to collect as much plasma from their own centers and then only
purchase plasma beyond their internal collection to third party independent collectors.
Below, there is a discussion about the macro supply and demand drivers of the market
and prices, but in general there has been a robust demand for product for the last ten
years and collection assets have not kept up with demand.

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Specifically, the consolidation of the plasma collection sector began in 2000 when Aventis
Behring purchased 47 source plasma collection centers from Serologicals for $21.4
million. This transaction was followed by three major acquisitions in 2001: Baxter (now
Takeda) acquired Sera-Tec (80 centers) in February, Grifols bought SeraCare (42 centers)
in June and formed Biomat, its plasma collection organization in the US and CSL bought
47 centers from Nabi in August. By 2005, the consolidation of the plasma industry was
such that is it is fairly similar to what exists today.

In 2002, the UK Department of Health purchased the 24 centers of Life Resources

(formerly called ”DCI Biologicals”) for about $100 million. DCI had supplied source plasma
to Bio Products Laboratory (BPL) since 1999. In 2002, Baxter (now Takeda) acquired Alpha
Therapeutic’s 42 plasma collection centers from Mitsubishi Pharma but immediately
closed 38 of them. In August 2003, Aventis Bio-Services sold 21 plasma centers to
International BioResources. Later in 2003 (Dec), Aventis Behring sold the rest of its centers
(60) along with the entire company to CSL Limited, an Australian company.

In March 2006, Grifols acquired the 15 plasma centers of PlasmaCare for approximately
$55 million. The same year (Nov 2006), Talecris bought International BioResources’ 58
plasma collections centers (21 FDA licensed, 12 open but not licensed yet, 25 in
development).

In August 2007, Biotest acquired all of Nabi’s plasma business, including 9 plasma
collection centers. In October 2007, Octapharma offered Life Therapeutics’ 14 plasma
centers for $60 million, and closed in 2008. In August 2008, Octapharma acquired 33
centers from International BioResources (IBR). In mid-2010, Octapharma finalized its
acquisition of the remaining plasma centers from International Bio-Resources.

When Grifols acquired the entire Talecris business in June 2011, 69 centers were merged
into Biomat, but two of them were immediately sold to Kedrion as part of the government
approval. In July 2012, Kedrion acquired Ortho Clinical Diagnostics’ plasma collection
center which specialized in anti D plasma collection as part of the purchase of RhoGAM.
In September 2012, Biomat (Grifols) acquired the Cangene’s three US plasma centers. In
2015, Grifols purchased 1 collection center from Bowling Green Plasma. In January 2016,
Kedrion acquired 2 plasma collection centers from ImmunoTek as part of a multi-center
development agreement.

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In April 2016, Grifols acquired 50% of Interstate Blood Bank, Inc (IBBI) for $100 million,
based in Memphis, TN, with 25 centers collecting blood and plasma in 15 states. It
acquired the remaining 50% in March 2019 for another $100 million ($200 million total
for 25 centers). In August 2018, Grifols acquired Biotest USA, which included, among other
properties, 24 plasma centers, including four under construction or contract for $286
million. In 2019, Kedrion acquired another 6 plasma collection centers from ImmunoTek,
part of the multi-center collaboration to develop new centers between the two
companies. Also, in 2019, BPL Plasma accepted a bid from Grifols to sell 25 of its 51 centers
as part of the US government’s FTC CFIUS requirements around Chinese-owned
companies, which finally closed in February 2021. Finally, Grifols also purchased GC
Pharma’s GCAM North America-based division in October 2020, including a 1.5-million-
liter fractionation plant in Quebec, Canada and 11 US plasma collection centers for $460
million total. Grifols acquired another 7 centers from Kedrion in April 2021, briefly giving
them the largest network of centers in the United States, overtaking CSL Plasma. Many of
these acquisitions were financed with the issuance of notes and other debt. Given the
increases in interest rates over the last 18 months, this has put financial pressure on the
business. This has led Grifols to focus on cost cutting, announcing layoffs and the closure
of underperforming centers. In the fourth quarter of 2022, Grifols closed 18 centers and
it is estimated that another 14 will be closed by the end of Q2 2023. CSL now has retaken
the lead in terms of number of plasma collection centers in the US.

In January 2022, Permira, a large London-based private equity fund, announced their
partnership with Kedrion’s existing shareholders (the Marcucci family and FSI) to jointly
acquire and combine Kedrion and BPL for an undisclosed sum. The assets BPL sold include
their remaining 28 centers that they were required to sell in order to satisfy the US
government’s FTC CFIUS requirements around Chinese-owned companies in addition to
its Elstree plasma manufacturing campus. Kedrion came to the merger with 29 US
collection centers and six manufacturing plants. The deal closed in September 2022. In
2023, the companies are integrating and will be called Kedrion going forward. It is likely
that there will be further consolidation across the combination going forward.

COVID’s Impact on the Plasma Collection Industry

Like the rest of the broader economy, the plasma collection industry was materially
impacted by the COVID-19 pandemic. At the start of the pandemic, there was a
precipitous drop in collections, due to the mandated or voluntary closure or collection
capacity reduction of some centers. The decrease in donations was also caused by donor’s
26
fear of contracting COVID-19 while visiting a plasma center. This fear dissipated somewhat
in the summer of 2020, but returned every time the COVID-19 case counts increased in a
specific area. The fear factor only subsided after the Omicron waves of December 2021
through early 2022.

In April 2020, in the midst of the pandemic, the FDA lowered the required 60-day hold of
the source plasma collected to 45 days. This allowed all collectors to use a portion of their
inventory sooner to make up for the loss in collections (half a month’s extra or 4.1% of an
annual amount). While it was helpful for collectors/fractionators, it was a one-time benefit.
To date, this change from 60 to 45 days has remained even as the pandemic has subsided,
however it is not clear if this will be made permanent. Since there have been no product
safety issues with this change, the hold is likely to stay at 45 days given the extra flexibility
this provides to companies to manage their inventory levels.

The government’s CARES act which was enacted in March 2020 significantly disrupted
plasma donations. On top of the reluctance of many donors to come to the plasma centers
for fear of the virus, the $1,200 direct stimulus payments and the additional $600 per week
in unemployment benefits further disincentivized donation. Based on MRB interviews, this
led to an average of 30% drop in collections through August 2020. Some collectors
experienced a 50% drop in the collection volume.

The last two months of 2020 saw an uptick in donation, but this does not take into account
the additional $600 in direct stimulus payments and the $300 in additional unemployment
benefits passed at the end of December 2020. In March 2021, another $1.9 trillion stimulus
bill became law. As a result, a $1,400 direct payment was offered to every adult below a
set income threshold. Immediately after the payments started reaching donors in the
second half of March, donations dropped 20% or more in late March compared to the
previous month. The last stimulus plan extended unemployment benefits through August
2021.

Through the rest of 2021 collections remained about 5-10% below pre-pandemic levels.
The first half of 2022 saw an increase in collections and was close to parity with 2019
numbers by May 2021. Collections finally eclipsed pre-pandemic numbers in Q3 of 2022
and continued to grow beyond 2019 numbers since then.

27
While aggregate collections across the United States are finally above where they were
before the COVID-19 pandemic, this is somewhat misleading. In 2015, there were 510
centers collecting 29 million liters of plasma. By the end of 2022 there were 1,123 centers
collecting 45.0 million liters. This large increase in number of centers saw a top-level
increase in aggregate collections. That said, from a same store sales collections
perspective, most centers saw a drop in average volume. This trend existed before COVID
but was exacerbated and accelerated by the pandemic. The main driver of this trend is
increased competition between centers for the same donor pool in a particular city.
Contributing to this was massive government stimulus as outlined above that made it less
enticing to earn extra compensation by donating plasma. This led to collectors to rapidly
increase their donor incentives to historically high levels to attract donors. This topic will
be explored further in more detail later in this report.

U.S./Mexico Border Disruption 2020-2022

In March 2020, at the start of the COVID-19 Pandemic, the US/Mexican border was closed
to all but “essential crossings”. The extent to which these restrictions were implemented
varied between border crossings with some having a broader interpretation of “essential”
than others. However, in June 2021, U.S. Customs and Border Protection (USCBP) decided
that they will not allow any Mexican nationals with B1/B2 visas to cross over the border
for the purpose of donating plasma even though that had been allowed to do so for over
30 years.

The effect of this change in policy saw donation volumes at these centers on the border
plunge on average 80% with some seeing up to a 90% decline. This is particularly
impactful given that these centers along the border were some of the busiest, highest
producing locations in the entire country at up to 200,000 liters annually in 2019.

Immediately after USCBP stated their intention to prevent all Mexican nationals from
crossing the border to donate plasma, the major collectors with border centers began
trying to work with Federal, State, and Local Officials to resolve the situation. Ultimately
these efforts proved ineffectual. The only route left open was to take legal action and so,
in October 2021, CSL and Grifols jointly banded together to sue USCBP to overturn the
ban. Ultimately, the trial court denied CSL and Grifols request for injunctive relief as the
case moved forward. The companies then appealed this decision in March 2022. On Sept
19, 2022 the appeals court reversed the trial court’s decision and gave CSL and Grifols an
injunction that overturned USCBP’s ban. The Appeals Court gave the trial court pointed
28
recommendations on how to conduct the legal analysis. The reasons the appeals judge
gave in the opinion looked more procedural with how USCBP instituted the ban and not
about the substance of the ban itself (making this decision with no public discussion or
comment timeframe, etc.). This is the current situation as April 2023, and it is unclear if
USCBP is planning on taking any further action. CBP has not officially rescinded their
policy to prohibit B1/B2 visa holders from crossing the border to donate plasma. For the
moment that policy has only been enjoined.

The injunction led to the reopening of all border centers to Mexican B1/B2 Visa holders
beginning in late September 2022. Since then, the border centers have seen Mexican
donors return in significant numbers and as of the publication of this report they are
achieving close to 80% of their pre-pandemic/pre-ban collection levels. One of the
reasons collections at border centers have remained below 2019 levels in early 2023 is
many Mexican nationals saw their B1/B2 visas expire during the pandemic. B1/B2 visas
are generally granted in 10-year increments. When they expire, a holder must go to a
large Mexican city where there is a US consulate to get the visa renewed. Given COVID
protocols and a general backlog in Visa approvals since people could not get
appointments for months, it is currently taking a long time for many B1/B2 visa holders
to get their visa reinstated. In addition, given that the vast majority of Mexican donors
have not donated in the last 6 months, the first time they come in to donate they will be
seen as applicant donors. Since it takes almost twice the amount of time to go through
the process, fewer donors can be processed in the same amount of time. This is
contributing to the length of time needed for border centers to get back to pre-pandemic
numbers.

The return of collections from Border Centers has buoyed the strong snapback of overall
collection volumes across the United States in the second half of 2022 and into 2023.
Aggregate country-wide monthly collections have finally surpassed 2019 collections
levels. Trends in donor collection volumes will be covered in the next section of this report.

CSL Departure from the Plasma Protein Therapeutics Association (PPTA)

Since 2001, the PPTA has been the singular industry trade group to represent the interests
of plasma collectors and fractionators to both regulators and patient groups. The
organization had all major players in the industry as Members throughout most of its
history.

29
The PPTA’s claim to represent nearly all of the commercial plasma collection industry in
the United States was upended in August 2022 with the news that CSL decided that it
would no longer be a member organization of the PPTA effective at the end of 2022. As
mentioned above, virtually all collection centers in the United States were IQPP certified
for many years. With CSL’s move, this will remove over 300 collection centers from the
IQPP certified center list as their certification expires over the next three years and takes
the percentage of US collection centers who have IQPP certification from over 97% down
to under 70%. The full impact of CSL leaving the PPTA is not yet clear from a safety and
quality control standpoint. First, it certainly weakens the financial position of the PPTA and
more importantly, lowers the relevance and importance of the organization. CSL has
always been a good operator as is clear by their collection and market share numbers.
With CSL no longer part of the organization, the overall numbers the PPTA reports on
viral market rates are not representative of the entire country and so it creates a hole in
the safety data used by the government to understand plasma product risk.

Part of the reason for CSL leaving was that they did not want to share proprietary
operational or other information with the rest of the industry (including collections data
and viral rates). They also likely wanted to save money in paying dues and various fees to
the organization. This is balanced with their resultant lack of access to the regulatory
authorities as they will no longer be able to have private industry meetings with the FDA
through the PPTA. In addition, CSL will now need to pay non-member rates for the
National Donor Deferral Registry (NDDR). Finally, it is possible that CSL’s decision was
heavily impacted by the PPTA’s lack of ability to help and stave off the regulatory decision
that occurred along the border between Mexico and the United States as was outlined in
chapter 2 of this report. After the millions spent by CSL to the PPTA, there likely was an
expectation of greater effectiveness when one of the largest regulatory issue in decades
surfaced. What the broader plasma community must keep in mind is that this issue with
U.S. Customs and Border Protection was not an issue that the PPTA or even the plasma
collectors were used to dealing with. There were no relationships between CBP and the
PPTA prior to this abrupt issue. The COVID-19 pandemic was an unprecedented situation
that caused disruptions that no one had anticipated.

Going forward it remains to be seen if CSL will remain outside of the PPTA. It is possible
that in time, the company will rejoin the PPTA or decide to abide by the IQPP certification.
At this point however, given the decoupling that has occurred, it does not seem likely in
the intermediate term. It is important to remember that CSL leaving the PPTA will have
30
specific impacts. First, none of CSL's centers will pursue IQPP certification. In addition, the
data that PPTA reports around both collections and number of centers will be skewed as
it will no longer include CSL locations, representing over 30% of the collections industry.

Other Types of Plasma: Non-Profit Centers & Specialty Plasma

Source Plasma Collections by Non-Profit Blood Centers

To make up for revenue loss from the lower demand for red blood cells and competition
in the whole blood collection sector, some community blood centers initiated programs
to collect source plasma. This required them to be licensed by the FDA and to invest in
new, dedicated donation space, equipment, staff and training. It also required to convert
blood donors into plasma donors. This new type of activity has not flourished, due to
many technical, logistical, regulatory and cultural hurdles, not including the fact that many
donors know they can receive compensation for a plasma donation if they go to a
commercial plasma collection facility, while at a blood center, they will not be
compensated with cash. It is estimated that the non-profit sector collected less than
20,000 liters of normal source plasma in 2022.

Specialty Plasma
Specialty plasmas are collected for the production of hyperimmune globulin products
prescribed for one disease condition, such as tetanus, rabies and hepatitis B or
cytomegalovirus infection. These specific plasmas are collected by both large and small
organizations, but a few very small companies remain in business with only one or two
plasma centers exclusively dedicated to this type of collection. The volumes collected are
small (25,000 liters year) compared to those achieved by source plasma centers. Specialty
plasma donors are screened on the basis of their ability to generate sufficient antibody
titers, in addition to the criteria applying to source plasma donors. They also need to be
ready for a sustained donation commitment, which involves prior immunization and
boosters. For these reasons, the compensation is slightly higher than those applying to
source plasma donors although many specialty plasma donors, especially the anti-D
plasma donors sign up for the good cause, in addition to the compensation offered.
Because the high yield of immunized donors can make a lot of resulting product vials, the
global needs can be met with relatively low volumes of specialty plasmas. Thus, there is
no need for a high number of donors or plasma centers, unlike IG.

31
Anti-D Plasma
The global production of anti D plasma is estimated at about 150,000 liters per year, with
Kedrion (formerly Ortho Clinical Diagnostics) collecting about a third of the global volume.
The pool of donors giving anti-D plasma comprises highly dedicated individuals who
donate regularly for several years. Most donors are Rh negative women who developed
antibodies as a result of pregnancy with a Rh-positive partner. However, male donors
must be inoculated with Rh-positive red blood cells in order to develop antibodies.
Becoming an anti-D plasma donor is a long and demanding process, which explains why
these donors are hard to find, and compensated more generously than source plasma
donors. Anti-D plasma remains in high demand, as the market for the RH immunoglobulin
is stable or growing.

Anti-Cytomegalovirus (CMV) and Varicella Zoster Plasma (VZIG)

CMV and VZIG plasmas are screened from standard source plasma on the basis of their
titer. There is no CMV vaccine, as in the case of hepatitis B or Anti-D, but the titer varies
substantially from donor to donor. Thus, a regular source plasma donation that happens
to produce a high titer of CMV or VZIG may be separated out and used for the production
of the respective hyperimmune products, even though the donor did not need to be
subjected to prior immunization. This means the donor is not always paid any more than
a regular donor, though the plasma is worth about 10% more than regular source plasma
when sold to fractionators. The demand for these two types of plasmas is in slow decline,
due to the downward trend of the demand for the respective immunoglobulins.

Respiratory Syncytial Virus Plasma (RSV)

RSV plasma is screened from standard source plasma based on the titer, just like CMV or
VZIG plasma. It is used by only one US company (ADMA Biologics) for the production of
a proprietary immunoglobulin product (Asceniv), a product whose sales have grown in
recent years. The commercialization of an RSV immunoglobulin RespiGAM, made by
Medimmune, ended when "Synagis," a recombinant product was introduced in 1999 and
rapidly captured the entire RSV infection market.

Anti-Tetanus Plasma
Anti-tetanus plasma appears to be among the least attractive to the plasma collecting
organizations, due to financial and logistical challenges. It is difficult to obtain vaccines
for donor immunization, and those currently available are not as potent as in the past
because they just contain enough antitoxin to prevent the infection and they are not
32
designed for the purpose of immunizing plasma donors. Therefore, many new donors
must be recruited because the percentage of donors with adequate titers is low and the
plasma does not sell at the same high price as anti-D plasma, despite the cost and efforts
of donor recruitment and immunization. Furthermore, the tetanus immunoglobulin
demand is stable, or slightly declining.

Donors immunized with bivalent or trivalent vaccines (diphtheria and pertussis, tetanus)
are no longer accepted, due to the low titers obtained with this type of immunization.
Instead, they require special tetanus immunization injections, which is inconvenient for
the donor and adds cost for the collector, and needs to be recouped by having a donor
committed to donate for a period of time. If the donor leaves after immunization, the
collector has lost hundreds of dollars in vaccines.

Anti-Hepatitis B Plasma
Anti-hepatitis B plasma is obtained from donors immunized with hepatitis B vaccine,
generally a recombinant product. After a first shot, the donor must wait until his/her
antibody titer has reached an adequate level, after which time a plasma donation is
possible. Most donors require a booster after the first injection. While the demand for this
type of plasma is mostly stable, a number of new therapies now compete with hepatitis B
immune globulin, reducing the need for this specialty plasma.

Anti-Rabies Plasma
The number of companies making rabies immunoglobulin is small, and the need for this
type of plasma is limited. The donors must be immunized, and the testing of the plasma
can only be done by two highly specialized laboratories in the country. Consequently, the
supply of this plasma is limited, despite growing demand.

Convalescent COVID-19 Plasma (CCP)

In early 2020, the COVID19 coronavirus (SARS-COV-2) pandemic caused a new type of
donor to emerge, people who had successfully recovered from the virus and had,
presumably, titers to the novel disease. As these donors were in high demand, particularly
early on in the pandemic (spring 2020), the compensation offered for convalescent plasma
to these donors ranged from $100 to over $200 per donation. By the second half of 2020,
with the new infections levels lower and more people having recovered (increasing
potential donor pool), the donation rates had settled to $100-150 per donation for the
first 1-2 donations and then only a slight bonus over regular plasma donation after that.
33
Early on in the pandemic, the US government through its BARDA agency reimbursed
collectors of CCP plasma for transfusion at a rate of $750 per unit. This gradually fell to
around $500 per unit in early 2021. Given the steady climb in vaccination rates and
ambiguous efficacy data for CCP transfusions, the demand for CCP plasma started to fall
in the first half of 2021 and the BARDA program was ended in the first half of 2021. At
present, there is very low demand for convalescent COVID19 plasma, though there still
some use cases in immunocompromised individuals who may benefit from it. Still, a future
pandemic or viral outbreak may again revive the interest and demand for convalescent
plasma from recovered citizens.

34
2. Current Plasma Collection Center Landscape

Historical Number of Centers

The plasma industry has seen a significant increase in the number of collection centers
over the last 10 years for the reasons discussed above. The table below shows the centers
went from 403 in 1980 to 426 in 2000 before dropping to 320 in 2006 and climbing to
415 in 2012 before starting a sustained rise to the present. By 2015, the total number of
US plasma collection centers was 530 and reached 935 at the end of 2020 and 1,123 by
the end of 2022. By March 2023, it was up to 1,155 total centers.

Year US Centers CAGR

1980 403
1985 377 -1.3%
1990 408 1.6%
1993 430 1.8%
1996 454 1.8%
1998 427 -3.0%
2000 426 -0.1%
2002 407 -2.3%
2004 351 -7.1%
2006 320 -4.5%
2008 362 6.4%
2010 397 4.7%
2011 404 1.8%
2012 415 2.7%
2013 446 7.5%
2014 484 8.5%
2015 530 9.5%
2016 601 13.4%
2017 671 11.6%
2018 738 10.0%
2019 833 12.9%
2020 935 12.2%
2021 1045 11.8%
2022 1123 7.5%
Number of US Plasma Collection centers from 1980 to 2022

Overall Industry Collection Volumes

Overall collection volumes generally follow the trend of the number of centers as well as
average collections per center. That said, given the fast ramp up in number of centers as
well as an increasing diversity of the size and scope of plasma centers over the past 3
years, there has been an increasingly divergent correlation between the two numbers. The

35
steady increase in demand for plasma derived therapies has been significant between
2015 and the end of 2022 the IG market has grown at a CAGR of almost 8%, with plasma
collection rising from 29 million liters collected in 2015, to 36 million liters in 2020, and
around 45 million liters in 2022.

Current Number of Centers

At the end of 2022, there were 1,123 plasma collection centers approved by the FDA in
the United States. This is 7.5% more than in 2021 and 20% more than 2020. By Q1 2023,
the total number of centers had risen to 1,155, or 32 more than 3 months earlier, and over
150 in the pipeline at various stages of development. In comparison, there were only 186
private plasma collection centers in the four European countries which have commercial,
compensated plasmapheresis. Over the past 7 years, the number of centers in the US has
grown at a much higher rate than previously seen. From 2000 to 2010, the compounded
annual growth rate was negative (-0.7%) as there was almost no growth because many of
the centers operating in the 1990s were shut down and new larger centers were built, with
an almost doubling of number of collections per center over this period. Then, from 2010
to 2015, the annual growth rate was 5.9%, as companies grew both their center count but
also enlarged their centers to get more collections per center. Since, 2015, the growth in
plasma collections has come solely from increasing the number of centers as most mature
centers were not significantly growing collections so the only way to increase overall
collections has been to increase the number of center locations. Thus, the growth in FDA
licensed centers has risen 11.3% per year from 2015 to 2022, while the average collections
per center has dropped from 2018 to 2021 before rising last year again. As shown in the
10-year forecast in the next chapter, it is anticipated that the number of collection centers
will level off for the next two years as companies grow in the capacity that they have built
out. In addition, as companies build out centers that have a smaller footprint to go into
geographies that are either less saturated with competition or that can only support a
smaller center, the number of centers may continue to go up but with a lower average
collection number per center.

36
 US Plasma Collection Centers by Year 1980-2022
1,200

1,000
Number of US Centers

800

600

400

200

0
1980 1985 1990 1995 2000 2005 2010 2015 2020

Number of US Plasma Collection Centers from 1980-2022

Plasma Collection Landscape by Company

The number of FDA-approved plasma collection centers by company for the years 2017
and 2022 is shown in pie charts below. Note some industry consolidation as Grifols has
made acquisitions and closed some centers while Kedrion and the remaining BPL centers
were combined by Permira. Also notice the 4 largest companies (CSL, Takeda, Grifols and
Octapharma) have increased their overall percentage of total centers owned, mostly due
to internal center growth by CSL, Takeda and Octapharma. Finally, there have been a few
small companies which have started or expanded significantly in the past few years,
notably ADMA, B Positive, Join Parachute and especially ImmunoTek.

37
 2017 US Plasma Collection Centers
Total 631 centers

GC Pharma Others
ImmunoTek
1% 5%
1%
Kedrion Plasma
2%

Octapharma Plasma CSL Plasma

12% 23%

BPL Plasma
5%

Biotest BioLife (Takeda)

3% 14%

Biomat (Grifols)
34%

38
 2022 US Plasma Collection Centers
Total 1,123 centers

B Positive Others
ADMA 1% 2%
GC Pharma 1%
0% Join Parachute
1%
ImmunoTek
3%
Kedrion/BPL
Plasma
5%

CSL Plasma
28%

Octapharma Plasma
15%

BioLife (Takeda)
17%

Grifols
27%

See Appendix 1 for details of integrated collections and fractionation companies along
with independent collectors.

A map of all US FDA-approved plasma collection centers by company at the end of 2020
is shown below. Since then, there have been more centers added, but the picture still
looks largely the same. Historically, centers have been concentrated in the South and
Midwest, while there were relatively few in the northeast or west coast. This was generally
due to onerous or costly local compliance and regulatory in certain states (California or
New York), coupled with the generally higher cost of living and doing business in those

39
states versus those in the south and Midwest. That said, over the last two years there have
been many more centers built out in the northeast and west coast. This is due to successful
efforts by the PPTA and others to change some state and local regulations. In addition,
given the concentration of centers in the South and Midwest, in order to seek out areas
that were less competitive, companies built out centers in new geographies. Please note
that only one bubble is shown per city, so there are fewer total bubbles than centers. For
example, Houston is represented by 1 bubble, but there are 15 centers located in the city
at the end of 2022. The same is true for several other big cities like San Antonio (15
centers), El Paso (14 centers), Indianapolis (12 centers) and Las Vegas (12 centers).

40
US FDA-licensed Plasma Collection Centers Year-end 2020 Map Colored by Company

KEY: Grifols operates Biomat, Talecris Plasma, BPC Plasma and half of BPL Plasma. CSL Behring (CSL Plasma), Kedrion (KedPlasma),
Octapharma (Octapharma Plasma), Takeda (BioLife), BPL (50% of BPL Plasma). ImmunoTek and Others are independent collectors.

41
Average Collection Volume Per Center

The average collections per center hovered at 22,000 liters per year from the early 1980s
before dipping in the late 1980s into the early 1990s and then rising back to 22,000 liters
per year by 2000. From 2000, it began to rise, going to 28,000 liters per center per year in
2005 and up to over 40,000 liters per year in 2010. By 2015, the average collections per
center was close to 55,000 liters per year and stayed in the mid-50,000 range through
2019. Even though new centers take over a year to reach high collection volumes, the
market was able to add over 300 centers and keep the average collections per center
mostly stable through annual increases in existing center throughput. For a few years, this
was even true despite the fact that many of the new centers were in crowded markets.
Over time, this increase in new centers in crowded markets led to lower overall collections
as donors have access to more centers near to their residences. In 2020, the average
dropped significantly to around 38,000 liters per year (from 53,000 the year before) due
to the COVID19 pandemic and ensuing challenges of recruiting donors. It fell further to
just 35,000 liters per center on average in 2021. As government stimulus payments
receded along with the pandemic’s impact on the population and business activity,
collections grew significantly through the second half of 2022, continuing in early 2023.
That said, the average volume per center by the end of 2022 was about 40,000 liters per
year, still roughly one quarter below pre-pandemic averages. The reasons for this dip
include new centers with low collection numbers bringing down the weighted average
along with changes in donor behaviors as discussed elsewhere in this report.

The average volume per center by the end of Q1 2023 was about 43,000 liters per year,
roughly 20% below pre-pandemic averages. The large number of relatively new centers
that are early in their ramp-up curve bring down the average. In addition, this average
hides a very wide range in collections across US centers. Before and during the pandemic,
most collectors were setting up their centers so that they could accommodate a large
donor surge at the busiest times of day. The busy times in a center are typically early in
the morning before donors go to work and in the afternoon/evening after business hours.
As collection volumes started to come back in the wake of COVID19 and with donor
compensation averages remaining incredibly high, and fierce competition between
centers in the same area, companies started to go into new geographies. While these new
locations were less competitive, they couldn’t support a large center due to lower
population or other reasons. This has led to variability in the layout and forecast capacity
42
of new centers being planned. This represents the biggest change in center design and
anticipated production since the shift to larger centers after 2010.

Changes in Donor Center Location and Strategy from 2020/2021 to today

When the last version of this report was released in early 2021, most new centers were set
up with the capability to collect as much as 70,000 – 90,000 liters per year even though
most will likely achieve collections 45,000 to 55,000 liters on average. Companies wanted
to have the ability to collect more if a center was successful in a particular location. This
meant that in these centers there would be 42 or more donation beds and machines in a
center. As a center scales, there was additional square footage on the donor floor to allow
for the addition of more donation beds and machines to increase capacity if the center
was doing well from a volume perspective and the donor traffic supported expansion. In
the wake of the COVID19 pandemic, with its resultant cost per liter increases and lower
overall production volumes, this has changed. Centers are now smaller and being built
out with much less excess space to scale up. This has the effect of cutting down on the
overhead rent costs and enables new centers to be located in areas that either “steal” a
target donor population from a competitor, or in a geography with a population that
would not have been able to support a “typical” large plasma center in the past. New
centers are now being built with a total possible capacity of 50,000 – 70,000 liters per year
with the expect production of 35,000 – 45,000 liters per year. This narrowing of the
averages illustrates this tighter, smaller footprint for new locations.

The phrase “construction completed” and “fully built out” in the plasma collections
industry means for example that the half height walls that oftentimes separate the bays
of beds on the donor floor are already built, the electrical work (plugs) have been installed,
so that when/if the additional capacity is required, all it needs is to is to install the
equipment for an immediate increase in capacity. The same holds true for screening
booths used at the front end of the process. Most centers build out all booths before
opening but may not have the requisite equipment to make all of these booths
operational until volume demands it. The key here is that now, many companies are
limiting this expansion factor so that there is much less empty space when a center opens,
to reduce cost but preventing future expansion.

It remains true today that collectors want to have all planned construction completed
before a center opens, even in areas that may never be used (excess capacity). This is for
43
the construction (floors, walls, electricity), but does not include the donation machines
and other equipment that can be added later. The reason all the planned construction
should be completed before a center opens is because if a center is a success and is
operating seven days per week, they will not want to close it for any period of time to
finish the construction/build out of the space or expand the site, as they could lose donors
while they are closed. Those donors may never come back if there is competition in the
same area with another center, raising the stakes of closing a center in order to expand.

The cost to collect a liter of plasma is typically variable and marginal after the large up-
front investment to build out a location and obtain regulatory approval. Since the
timelines to get a center fully operational and at capacity are extremely long and costly,
collectors want to do everything in their power to ensure that they can squeeze as much
volume out of a location as possible if they have a successful center. The ability to add
capacity was the main focus as collectors built out centers 2017 through 2020. As the cost
per liter to collect skyrocketed throughout the pandemic, there has been a shift to
focusing on efficient, cost-effective plasma collection with centers located in areas that
are much less competitive with other existing locations. This can oftentimes require a
much smaller footprint, because there are fewer likely donors in the area. Potential future
donor floor or other space is less important in this post-COVID hypercompetitive
collection environment.

The range of center level volume goes from 90,000+ liters per year at a wildly successful
location down to others that collect 20,000 – 30,000 liters per year (small or poorly located
centers). The most successful centers are located in areas with a large pool of plasma
donors- those for whom $600+ per month in additional income could make a material
impact on their lives. This is generally found in working class areas and around colleges
or on the US/Mexico border. There is an altruistic component to donating plasma
(providing the material to make medicines that save and sustain lives), but this is not a
primary driver for the majority of donors. For them, the compensation is the primary
reason they donate and the fact that they are saving lives in the process is a nice bonus.

Going forward, it is likely that the average collections per donation center will continue to
go down as the number of centers increases across the US and there is increased
competition between centers for donors, as discussed in the next chapter.

44
A few years ago, there was a trend toward collectors opening one large “parent” center in
a particular metropolitan area with a number of smaller satellite locations around it in
order to dissuade competitors from entering the market. While this is still happening in
less developed markets, the focus today in new center development has now shifted to a
higher number of smaller centers. While there is still a desire to leverage marketing,
recruiting and staffing dollars across one metro area by having many centers cover the
geographic area, getting too close to a competitor center or going into an oversaturated
market is seen as being a riskier investment when compared with placing slightly smaller
bets in more locations. The attributes of these centers such as square footage will be
covered later in this report. This is also a reflection of the change in focus from the short-
supply environment that existed in 2020 and 2021 to one of efficiency and cost
containment starting in 2022 and going forward.

When considering donating, donors weigh the incentive they would earn with the
distance they have to travel and the effort to earn it. The metrics depend on the
geography/density of the area where the center is located, but donors usually live within
12 miles of a center where they donate. Smaller centers allow for collectors to be located
closer to additional donor populations. This makes it more convenient for donors to come
in, leading those donors to donate more frequently, but also making it harder for a
competitor to enter the area. These smaller centers also make it easier to find a suitable
build/retrofit location given it has a smaller footprint and therefore more real estate
options exist since they don’t have to find a large space. It also allows collectors to enter
cities and towns which historically had no plasma centers as it will take a smaller donor
population to support a smaller collection center.

Going forward, new centers are expected to be set up in two areas:

1. Areas where a smaller new center can fit into a location in a metro area with other
centers (moving closer to a specific donor pool), or
2. Areas that have not historically had plasma donation (enter new cities or areas
within a larger metro).

Collecting Plasma Cost Effectively

As has been outlined, collectors have spent almost a decade building new centers at
breakneck speed. While there were significant supply constraints throughout that time
which justified continued investment in new centers, future growth of immunoglobulins
45
is expected to be impacted by novel competition, especially in the autoimmune diseases,
as discussed briefly in the next chapter and in much more detail in other MRB reports
(MRB US Immunoglobulin Usage and Forecast to 2030 report). This lowers the need to
secure product at all costs. At the same time the cost to collect plasma has increased at
such a rate that it has significantly compressed the margins of all companies. This has
precipitated the need to prioritize cost efficiency over growth at present. Collectors will
continue to consider the population in an area to see if they will have enough skilled labor
to operate centers and if the demographics of the population can support that center but
there will be willingness to go into less tested markets if they have less competition to
keep collection costs down. Companies are also taking a breather from the pace of center
growth that we have seen over the last five years, as donor interest has risen due to the
end of the pandemic, high inflation, and macro-economic reasons.

As mentioned above, the explosion of new centers across the US has affected the average
collections volume per center. On average it takes 24 to 36 months to ramp up the
collection volume of a center once it opens. Since there are so many new centers in the
past few years, the average volume collected per center has declined. Currently, there is
no “same store sales” equivalent metric in the plasma industry, though it would be a nice
metric for the industry to adopt as retail stores have.

Average Number of Beds per Center

Another important metric when assessing center capacity is its number of donation beds.
Since many centers have been set up for surges, they may have 60 – 70 beds but on a
typical day, only 40 – 50 beds are being used. As discussed above, centers may also be
designed to fit 70 beds but only have 40 beds installed since it does not make sense to
pay for the extra equipment if it is not using all of its existing capacity. The same rationale
goes for other areas of the center (screening booths, physical rooms etc.). This will likely
change going forward with the new, smaller centers being planned and less unused space,
but for now, this still is the case for most existing centers.

The current average number of beds per center based on MRB’s survey is 42 beds, with a
response range of 30 to 66 beds (with a few outliners of down to 12 and up to 90 beds).
This is down from an average of 48 beds per center in 2020 when the last survey was
conducted. Most centers with 24-32 beds are in suburban or rural areas with a smaller
donor pool or they are in a competitive metropolitan area with many plasma centers. The
border centers between the US and Mexico average 56 beds per center but can go up to
46
90 beds (largest centers in the country). The largest urban centers have 60 beds, with
some going up to 72 beds. The centers in urban areas reflect the overall average of about
42 beds across the country, down from 48 two years ago.

Average Bed Turn Rates

In order to understand the productivity of collection centers and the beds/machines they
have in service; the industry uses the metric of “Turn rate”. A turn rate refers to the average
number of times a bed has been turned (or number of donors who have donated plasma
on it) in a center over 260 days per year (five working days a week). This is analogous to
the concept of “per seat” flight miles for the airline industry. There are some quirks about
this metric in the industry. First, one would typically imagine that the turn rate metric
would be the number of times a bed has had a donor on it per day a center is open. Even
though most centers are open six or seven days per week, they are oftentimes open fewer
days per week while they are in the process of ramping up production following their
opening. The metric of utilization over five days was first used by Haemonetics to measure
the utilization of their devices across a fleet of their customers centers all with varying
schedules and at varied stages of development. Since their business model is a marginal
“razor blade” approach of charging for each donations’ soft goods/disposables (discussed
in chapter 9), they needed a required minimum “utilization rate” for devices. Haemonetics
had to make it equitable across a varied schedule and settled on dividing the production
across a week by five days to find the turn rate. This metric was then broadly adopted
across the industry though individual collectors such as BioLife and others do not use the
five day per week turn rate as their main metric but calculate it in a unique proprietary
way. Fresenius Kabi looks at utilization based on annual collections per year per device.

The current average turn rate per day in the United States is 5.6 times per day with a range
seen of 3.75 to 6.8. This is up slightly from an average of 5.5 times per day in late 2020
with a range seen of 4.5 to 6.6. The pandemic obviously had a significant impact on turn
rates as donor traffic and volumes fell. Collectors avoided penalties with apheresis device
manufacturers by returning underutilized machines and adding new machines to new
centers slower throughout the pandemic. Given the focus today on efficiency and smaller
centers, it is likely that turn rates will continue to improve through 2023 and it is likely
that turn rates will surpass their pre-pandemic levels going forward.

On an individual center basis, average turn rates skew higher and lower depending on the
location and average volume/throughput. Centers with a lower average turn rate usually
47
have a larger number of beds. Even though a center has a lower bed turn rate they tend
to have a larger overall volume since they are large centers that can accommodate the
surges seen throughout the day. This is typical of border and urban centers in the US. As
mentioned above, it is likely that the gap in lower average turn rates at larger centers with
higher average turn rates in smaller centers will narrow as companies return devices and
become more efficient in their operations across their fleet of locations. The change in
the speed of the devices, such as Terumo BCT’s Rika, will lead to increasing the average
turn rates in a center, as discussed in chapter 9.

There is also a relationship between how a collector manages the donor traffic in a center,
the average door-in/door-out donation time and turn rates. For example, companies that
strictly schedule donors in appointments (Biotest/Grifols, BioLife, and increasingly, other
Grifols-owned centers), have lower turn rates (average of 4.2 to 5) but have faster donor
throughput times. The best actor in the market has an average donor door in/door out
time of 65 minutes for a repeat donor, just slightly higher than 2 years ago. Since there
are fewer donors walking in and waiting in line, it allows donors to move through the
process faster than the industry average. Conversely, collectors that only do walk ins
generally have a busier center with average repeat donor door in/door out times of 95
minutes, but they have an average turn rate of 5 to 6, depending on the competitive
environment and how established they are in the community.

Average Collection Volume Per Donation & FDA Nomogram for Source Plasma

When looking at center costs and performance across the plasma collection industry there
are two main types of metrics that are used. The first are reported per unit or donation,
meaning per visit that a donor came in and donated a unit of plasma. The second one is
per liter, meaning liters of plasma that was collected from a donor. This is an important
distinction that must be understood. Most companies have shifted to a per liter costing
because the collected plasma unit/donation is priced per liter and it helps to normalize
and compare across varying individual collection volumes. This helps a fractionator
understand how much protein volume it will obtain to manufacture the final therapeutic
products.

The key to converting units or donations to liters is a function of the average volume per
donation. Based on numerous sources, the average volume per donation across the
industry is 841 milliliters or 0.841 liters per donation, with an average range of 800
48
milliliters to 900 milliliters per donation. This average volume is up from 829 milliliters in
2020. The primary driver of this increase is the introduction of new technologies by
apheresis device manufacturers to increase the yield per donation. This is discussed in
more detail below in the section covering collection devices (chapter 9). We anticipate
that this number will grow significantly over the next five years. The maximum likely of
this is a 7.5% to 10% increase to the average volume per donation in that time. In our
forecast we assumed 8.5% total increase over the 2020 value of 829 ml based on the
current additional yield increase with technologies currently in market based our MRB
investigation (see chapter 7 for more details).

The variability currently seen across the industry is related the choice of apheresis device
and software, differing approaches to donor incentives, and the demographics of the
donor population. Currently, Haemonetics is the only device manufacturer offering an
additional yield beyond the simplified FDA nomogram set in 1992. Those collectors that
have turned on this feature are seeing higher yields per donation. Given the uneven
adoption even across Haemonetics customer base, we are seeing a wider divergence in
average collection volume per donation across the industry than in the 2010s. With
respect to donor incentives, some collectors adjust their incentives based on the weight
of a donor. For example, CSL will pay a higher amount to someone who weighs 180
pounds since the donation can reach 880 milliliters of plasma while someone who weighs
140 pounds can only donate 690 milliliters of plasma. Meanwhile Biomat (owned by
Grifols), does not differentiate donor incentives based on weight. This encourages donors
with a lower weight to donate at the centers that do not differentiate donor incentive
rates based on weight, if such options exist in their community. This in turn, lowers the
average volume for those collection businesses that do not differentiate donor incentives
based on weight. Finally, the demographics and physical attributes of the surrounding
donor population play a role in average collection volume. Since donation volume is a
function of a donor’s weight, (and in the case of Haemonetics enhanced yield product
Persona- a donor’s Body Mass Index (BMI) and Hematocrit), the heavier or physically
larger a population is, the higher the average volume of plasma donated. The centers that
are located in areas with larger populations generate higher average yields. Texas and
states in the South rank amongst the states with the most obesity and highest average
weights among Americans.

49
FDA Mandated Nomogram for Plasma Donation
Donor Weight Plasma Volume Collection Volume
110-149 lbs. 625 ml 690 ml
150-174 lbs. 750 ml 825 ml
175 lbs. & up 800 ml 880 ml 1

In 1992, the FDA set a simplified nomogram solely based on the weight of a donor. The
difference between plasma volume and collection volume has to do with the mechanics
of how the collection process works using a typical apheresis device. Since there is only
one venipuncture site (one needle insertion) during a source plasma donation, the
machines work by first taking a set volume of whole blood from a donor (generally
between 200 and 250 milliliters of blood). The apheresis machine then separates the
plasma from the rest of the cellular material (including red blood cells, white blood cells,
platelets, etc.). Once all plasma has been separated from the initial volume of whole blood
drawn with the plasma going into the collection bottle, the machine returns the remaining
cellular material to the donor along with anti-coagulant solution to prevent clots in the
body.

The machine then does another draw of whole blood to continue the process. This time
however, some of the anti-coagulant solution is in the whole blood from the previous
return of the red cells and other cellular material. Since the anticoagulant solution is
roughly the same density as water and plasma, some of it then makes it into the donation
bottle after this second draw of blood is centrifuged or separated. As the draws continue
over a donation (generally there are 2 or 3 depending on the weight of the donor), there
is more anti-coagulant solution in the donation bottle over time. The amount of
anticoagulant solution in the bottle is the difference between the plasma volume and the
collection volume The implication of this for the collector is that while the total volume in
a bottle of plasma may match the FDA nomogram, in actuality, the amount of plasma in
the bottle is less than what is listed since there is additional anti-coagulant in the bottle.

When the standard was introduced in 1992, the plasmapheresis machines were not as
advanced as they are today and the ability to measure the exact amount of plasma versus
anticoagulant solution was not well developed. Today, the collection devices are able to
calculate this number. This is an issue that “Haemonetics YES solution” and Fresenius

1
https://www.fda.gov/media/70951/download
50
Kabi’s “Optimized Nomogram” have set out to fix. It is also presumed that Terumo BCT
will offer a similar solution with their Rika device. The ability to collect additional plasma
from donors that are already coming through the door is an attractive proposition to
many collectors, given the increasing scarcity of new donors.

The average collection volumes overviewed in this section take into account the impact
of yield enhancing technologies offered by device manufacturers. That said, the impact
has been limited by low uptake of this higher yield technology and the fact that only one
manufacturer is currently offering a holistic higher-yield solution at this time. This is likely
to change in the coming years. This topic will be discussed in further detail in the
“Collection Devices” (chapter 9) below.

Key Donation Metrics

Key Metric 2022 2022 2020 2020
Average Range Average Range
Collection 40,519 liters 20,000 - 85,000 38,428 liters 20,000 –
Volume liters 90,000 liters
Number of Beds 42 beds 30 – 66 beds 48 beds 32 – 90 beds
Bed Turn Rate* 5.6 3.75 – 6.8 5.5 4.5 – 6.6
* Based on a 5 day per week rate

Location Categories for Centers in the United States

From a location perspective, the clusters of plasma centers can be categorized as follows:

Centers near colleges and university campuses:

University students usually do not have high income and are motivated to earn some
income through plasma donation. This has been a strong business case for locating
centers in close proximity to colleges across the United States for years. The abundant
pool of potential donors has led to opening many centers in these areas. Another benefit
of being close to colleges is that donors will likely be healthy, given the age of students.
Additionally, they enjoy relatively flexible schedules. However, these centers’ activity is
seasonal, which can affect average collection numbers as there aren’t many students
around during the summer, Christmas or spring breaks. Also given the sexual activity of
college students, there may be higher than average eligibility disqualifications. This also
presents unique staffing challenges:

51
- Having students as employees will result in a higher level of turnover - same problem
as with the donor pool.
- During the slow times, it is preferable to avoid carrying a full staff as the center will
likely not be profitable or collecting enough plasma as when school is in session. This
could lead to higher turnover rates which will lead to a worse experience for donors.

The pandemic also highlighted the challenge of these centers. If there is a disruption in
university life, it has an immediate negative impact on the collections at a center. Given
that the entire population and economy of these locations are based on the on the activity
at the university, there is higher risk in relying on a donor population that does not live in
an area permanently.

Centers on the United States / Mexico Border:

All along the border between Mexico and the United States a number of plasma centers
cater to both Mexican and United States citizens. These centers are clustered close to the
main border crossings between the two countries. While the majority of them are in Texas
(33), this extends to centers in Arizona (5 centers total; 1 in San Luis, 1 in Nogales, 1 in
Douglas and 2 in Yuma) and California (2 in Calexico). Given the income disparity between
the United States in Mexico, a strong motivating factor for Mexican citizens is to cross
from Mexico into the US, to earn donor fees in dollars and then take that compensation
back across the border to use in Mexico or to send it to family members in foreign
countries. For each of these centers, the proportion of donors who are Mexican vs. US
citizens varies by border crossing and by center. In those centers that are very close to the
crossing, almost 90% of their volume comes from donors who live in Mexico and cross on
B1/B2 visas, while the ratio at other centers is close to 50/50. Donors that cross the border
donate more often than their US counterparts because the donor fee represents a higher
percentage of their monthly income. They easily make as much money donating plasma
as they might earn from an unskilled job in Mexico.

The Mexican nationals that come across the border to donate plasma, do so using a B-
1/B-2 visa for Mexican citizens otherwise known as a Border Crossing Card (BCC) or called
“laser visa” by Mexicans. This visa is good for 10 years and the holder is entitled to an
unlimited number of visits to the United States. The stays must be short however (up to
30 days), and travel is restricted to a certain distance from the border area (25 miles). A
BCC is the only documentation needed for a holder to cross into the United States (no
52
passport required), and it is considered acceptable proof of identification as required to
qualify to donate plasma at all border centers. Undocumented immigrants in the United
States are not allowed to donate and do not qualify. Therefore, illegal immigrants are not
a problem for the border centers or others centers across the United States. The holder
of a BCC visa is not authorized to work or earn income in the United States.

From a legal and taxation standpoint, donor incentives are in a gray area because they
are not an “income,” but a compensation for a donor’s time spent donating. This a
sensitive topic in the industry as there has been some negative press surrounding the
issue after a few critical documentaries and books in the past few years. A news
organization estimated that prior to the COVID-19 pandemic, 10,000 Mexican nationals
crossed the border each week to donate plasma and that the border centers accounted
for 10% of the annual collection volume of the United States came from these centers. As
identified in the previous version of this report, this represented a huge risk for the
industry and for collectors that have collection centers in this area.

At the start of the COVID19 pandemic this contentious issue boiled over. In March 2020,
The US/Mexican border was closed to all but “essential crossings”. Ports of entry along
the border, including in Arizona and California, deemed plasma donation to be an
impermissible activity under the terms of the B-1/B-2 visa classification, and denied BCC
holders entry into the United States for that purpose. In Texas, however, CSL Behring and
Grifols issued so-called “safe passage” letters to employees and donors indicating that
plasma donors were “essential,” and thus should be allowed to cross the border. In
response, some CBP port of entry supervisors in Texas coordinated with collection centers
to determine whether BCC holders seeking entry to donate plasma were coming to
collection centers to donate. A system of sorts emerged: Collection centers sent
appointment lists showing the visa numbers of donors expected the next day to Texas
CBP officials, who would then allow those BCC holders to cross the border to donate
plasma.

This system eventually came to the attention of CBP's Office of Field Operations, which
creates and oversees enforcement policy at ports of entry. After a review, the Office issued
a guidance memorandum on June 14, 2021 clarifying that plasma donation is considered
labor for hire that is impermissible for B-1/B-2 visa holders, regardless of their “essential”
classification even though Mexican Nationals had been crossing the border to donate

53
plasma for over 30 years. The next day, CBP stated that they would no longer permit B1/B2
visa holders to cross for the purposes of donating plasma.
The effect of this change in policy saw donation volumes at these centers on the border
plunge on average 80% with some seeing up to a 90% decline. This is particularly
impactful to the entire industry given that these centers along the border were some of
the busiest, highest producing locations in the entire country.

Immediately after USCBP stated their intention to prevent all Mexican Nationals from
crossing the border to donate plasma, the major collectors with border centers began
trying to work with Federal, State, and Local Officials to resolve the situation. Ultimately
these efforts proved ineffectual. The only route left open was to take legal action and so,
on October 2021, CSL and Grifols jointly banded together to sue USCBP to overturn the
ban. Ultimately, the trial court denied CSL and Grifols request for injunctive relief as the
case was moving forward. The companies then appealed this decision in March 2022. On
September 19, 2022, the appeals court reversed the trial court’s decision and gave CSL
and Grifols an injunction that overturned USCBP’s ban. The Appeals Court gave the trial
court pointed recommendations on how to conduct the legal analysis. The reasons the
appeals judge gave in the opinion looked more procedural in how USCBP went about
instituting the ban and not around the substance of the ban itself (making this decision
with no public discussion or comment timeframe, etc.). There have been no changes in
rulings or procedures since the injunction was issued in September 2022 and it is unclear
if USCBP is planning on taking any further action. CBP has not officially rescinded their
policy to bar B1/B2 visa holders from crossing the border to donate plasma. For the
moment that policy has only been enjoined.

Due to the injunction on the ban, a reopening of all border centers to Mexican B Visa
holders began in late September 2022. Since then, the border centers have seen Mexican
donors return in significant numbers and as of the beginning of the second quarter of
2023, they are achieving close to 80% of their pre-pandemic/pre-ban collection levels.

One contributing factor for collections at border centers remaining below 2019 levels is
that many Mexican nationals saw their B1/B2 visas expire during the pandemic. B visas
are generally granted in 10-year increments. When they expire, a visa holder has to go to
a large Mexican city where there is a US consulate to get it renewed. Given COVID19
protocols and a general backlog in work since people could not get appointments for
months, it is currently taking a long time for many B visa holders to get their visa
54
reinstated. In addition, given that the vast majority of Mexican donors have not donated
in the last 6 months, the first time they come in to donate they will be seen as applicant
donors. Since it takes almost twice the amount of time to go through the new donor
process, fewer donors can be processed in the same amount of time. This is contributing
to the length of time needed for border centers to get back to pre-pandemic numbers.

Going forward, given the ambiguity of the situation with CBP, and the already existing
concentration of centers in these areas, it is unlikely that new border centers will be built
in the near future.

Urban Centers:
Urban centers are located close to large population centers and cities. Historically, at the
very beginning of the industry, urban areas had the highest concentration of plasma
centers, due to the proximity of a large number of potential donors. This was before the
industry was highly regulated and the impact of the HIV crisis was felt. Once viral rate
limits were introduced in the IQPP certification, urban areas became less attractive,
because too many people had viral infections to qualify. Recently however, given the need
to find plasma donors, it has been impossible for collectors to ignore the large urban
populations which include a number of potential donors in need of extra income. This has
led to an expansion of centers in urban areas over the last seven years. While they may
pull from a larger economic group, most donors at urban centers are people with below
average incomes, ranging between $25,000 and $50,000. Previously it was relatively rare
to see centers in the Northeast of the US (the most urban part of the country) given the
cost to operate there. This has changed over the last four years as collectors have gone
into new markets to satisfy their need for additional donors. In particular, the PPTA’s
successful efforts to get New York state regulations changed to allow plasma donation in
2021 (New York Assembly Bill A228) opened up a massive new market to collectors. Since
this passed, 18 centers have been opened in the State including 4 in New York City. It is
anticipated that more centers will open in NYC in the coming years.

Urban areas continue to be a growth area for plasma centers across the country. In the
scramble to find additional locations, there are several newer centers that are in areas that
might see challenges to meet the viral rate requirements set by the IQPP standard.

55
Suburban Centers:
Since plasma centers started being built outside of the core urban areas after 1990, a
significant portion of these centers were built in suburban areas. These locations were and
continue to be attractive as they have lower viral rates when compared to urban areas.
There is also more open space to build a plasma center from the ground up or to occupy
a location in a strip mall. With the shift to smaller, more efficient centers, this also opens
up new locations that might not have been on a collector’s radar previously.

The COVID19 pandemic has also slightly shifted where people are living and a big
beneficiary of that trend is the suburbs. It is likely that we will continue to see new centers
built out in suburban areas going forward. The suburbs have a higher median income
compared with urban areas, but not so much higher in many suburban areas as to exclude
the majority of households from being incentivized to donate. Collectors have chosen
locations in suburbs that are on low to middle income levels, with sufficient density to
support an average center with 42 beds producing 30,000 to 50,000 liters of plasma per
year. In the suburbs, real estate is less expensive with a lower cost per square foot, thus
making these locations more attractive to collectors. Some of them, including BioLife and
Biotest, have focused on the suburban areas, giving them different risk profiles than urban
or border center locations.

Rural/Reservation Centers:
Rural areas of the United States broadly have lower income levels. This tends to be a good
fit for plasma centers but, it is important to keep in mind that a large a population is
needed in order to support a center both from donor pool and staffing perspectives. A
number of centers have been set up near Native American reservations and in rural areas
where the costs of land and labor are typically lower. Furthermore, donors in these areas
feature low viral rates, below the IQPP limits. On the other hand, the low population
density of these areas and the long distances that donors may need to travel to get to a
center constitute obstacles to the success of plasma centers in these areas. This category
is the smallest in terms of the number of plasma centers in the US. Given the focus on
smaller, cost-efficient centers, is likely that rural areas or smaller towns will see more
plasma centers being built there in the coming years.

Conclusion:
Over the last five years, the competition between collectors to open centers around the
US in the “best” areas have been fierce. This has led to overcrowding in several
56
geographies with a resultant increase in donor incentives. It seems that for now, many
collectors are re-assessing their growth plans given the capacity that they have built out
across new centers over the last few years. That said, as demand for plasma-derived
therapies continues to expand, the number of centers will grow further, with centers
becoming more and more competitive with each other. As a result, there will be a
crowding of plasma centers all over the US, causing donor incentives to continue to rise,
as detailed in a forecast in chapter 7. Regardless, the renewed focus on efficiency and the
cost to collect will push collectors to adjust their models to build out smaller centers in
search of cheaper, less competitive markets.

57
3. Forecast of US Collection Centers and Collections through 2030

Assumptions for the Forecasts of Centers and Collections

Over the years, many centers have changed ownership, as companies changed strategy
or are forced to divest centers in some cases. In the past few years, Grifols acquired many
centers from IBBI, Biotest, BPL and GCAM. The forecast assumes the ownership of current
centers does not continue to change hands. While plasma centers will continuously be
acquired and sold in the next 10 years, particularly by independent collectors, the timing
and number of these transactions are impossible to predict. Thus, the forecast avoids the
issue and assumes all centers will stay with their current owners. If centers were to be
bought and sold among industry participants, it will change the ownership and market
share by company, but not the overall number operating in the country, which is the main
aim of the forecast. New companies entering the plasma collections space as independent
collectors are included in the “Others” category. It is likely that at least one or two new
independent companies will want to establish a network of new centers sometime in the
next 10 years, like Immunotek or B Positive have in the past. While the timing and total
number of new “large” independent centers is impossible to predict, given the historical
rate, it is likely there will be some going forward.

Furthermore, it is also assumed in this forecast the current strategy of smaller centers in
uncontested areas continues, with it resulting effects on center size and bed count, and
collections per center goal. The goal for newly designed centers currently is for each new
center to be able to collect 30,000 to 40,000 liters of plasma or more per year once fully
ramped up on average. Some centers will be larger with the goal of 50,000 to 70,000 liters,
but the average will be under 40,000 liters per center for the goal (and many will be
significantly below that goal). This design goal is expected to remain largely true for the
duration of the forecast. While this is a strategy which may or may not transpire for some
companies, the forecast does not assume companies switch predominantly to much
smaller center model with a goal of just collecting 15,000 or 25,000 liters of plasma per
year (based on 16-24 beds). If a new smaller center model were to become popular in the
industry, it would likely mean that a higher number of centers would be built and
operating than the current forecast shown here. This would drop the average collections
per center, but it would not significantly change the total volume of plasma collections,
as the latter number is more determined by the need for source material for
immunoglobulins production than the arbitrary number of plasma collection centers
operating in the United States.
58
The demand for immunoglobulins, both within the United States and globally is a complex
topic which is addressed in length in other Marketing Research Bureau reports, including
a US forecast to 2030 of the immunoglobulin market published October 2022 and a global
look at immunoglobulin demand published in July 2021. See the MRB website at
www.marketingreserachbureau.com for more details. For the purposes of background
here, the immunoglobulin market grew at about an 8% average annual rate in the 2010s
but is expected to grow a few percentage points lower in the 2020s (at 5-6% per year),
due to the many factors, including competition from novel therapies (FcRns) and
challenges in exponential growth on a larger base. This is a slower rate than was forecast
in the MRB’s previous US collections report published two years ago, as the effect of the
novel competition (particularly anti-FcRns in autoimmune conditions) as well as higher
cost to collect is likely to lead to a slightly slower IG demand in the next 10 years. For this
reason, the total volume of plasma collected for fractionation is lower than the forecast
from two years ago, and consequently the number of centers needed to collect that lower
volume is also lower. That said, the market is expected to grow consistently, and be over
50% larger in 2032 than in 2022. We assume plasma collections in the US will roughly
mirror that global IG demand growth on an annual basis, only deviating from that growth
rate if ex-US (global) plasma collections for fractionation grows faster or slower than that
rate, as discussed below.

The forecast assumes that no recessions or other economic shocks, pandemic or

otherwise, will occur throughout the period beyond the present year. For 2023 and early
2024, the forecast does assume softening of the US economy, but it may not reach the
definition of a recession. Still, this softening does encourage more donor willingness, and
thus allows the collection companies to lower donor fees more than they otherwise would
be able to in 2023 and early 2024, as explained in more detail in chapter 7. After 2024, the
forecast assumes a moderately growing economy, with stable and low unemployment
rates. Consequently, it will be progressively harder (at least to a small degree) to find
suitable donors to grow collections without opening new centers and/or offering higher
donor compensation. The latter topic is addressed in chapter 7, but the model makes the
assumption that higher donor fees are required to reach the levels of donations needed
to generate the expected growth in demand for immunoglobulin products. As a result of
the economic situation, collectors must open many new centers, as well as increase donor
compensation to attract increasing numbers of donors more frequently for each passing
year. Periods of economic expansion and recession will occur during the forecast,
impacting plasma collections negatively or positively and in turn affect the companies’
59
center build-out plans as well as collection volumes growth. If a recession like the Great
Recession of 2008-2010 was to occur, the industry would likely have an easier time of
finding and attracting donors, due to high unemployment and many Americans needing
supplemental income. This could cause companies to pause or slow down their new
center openings for a time, leading to lower overall centers operating than the forecast
assumes. However, if a future recession were combined with significant government
support for the unemployed and the economy in general, as was seen in 2020 and 2021,
then a recession may actually exacerbate the challenge of finding increasing numbers of
donors. This would result in either an acceleration of new center openings, or more likely,
even higher donor compensation for a time (perhaps permanently) to attract enough
donations to meet immunoglobulin production needs.

No significant border closings at the US-Mexico border are anticipated in the forecast,
and it is assumed Mexican citizens living in Mexico are able to cross the border to donate
in the United States as they have been since September 2022. If the border situation were
to permanently change as a result of the plasma companies losing their lawsuit against
the CBP. This would mean that Mexican donors on B1/B2 would not be permitted to
donate plasma because the payment would be considered a wage. The result would be
approximately 5-7% of the plasma collected in 2023 would not return, and the collection
forecast would dip below what is presently forecasted until other areas of the country
could compensate for the border center loss (but at measurably higher donor
compensation fees).

60
 Forecast of the Number of US Collection Centers and Total Collections 2015-2032

FDA Registered Plasma Centers in the United States 2018 - 2032

CAGR
Company 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2022-2032
CSL Plasma 175 241 279 304 319 330 338 354 372 390 410 430 450 470 490 4.4%
BioLife (Takeda) 100 118 139 167 192 209 221 235 249 262 275 288 301 314 327 5.5%
Biomat/Biotest (Grifols) 241 251 251 305 298 290 298 308 321 338 355 372 389 406 423 3.6%
Octapharma Plasma 86 110 140 162 167 174 182 190 200 210 220 230 240 250 260 4.5%
Kedrion & BPL Plasma 60 73 81 59 62 67 76 85 94 102 110 118 126 134 142 8.6%
ImmunoTek 9 16 17 23 39 57 67 74 84 94 104 114 124 134 144 14.0%
ADMA 0 1 3 6 9 10 11 13 14 16 17 19 20 22 23 9.8%
B Positive 3 2 2 1 8 15 25 29 31 33 35 37 39 41 43 18.3%
LFB 0 0 0 3 5 7 8 12 16 20 24 28 30 32 34 21.1%
ABO Plasma/GCAM 12 11 12 2 2 5 8 10 12 14 16 18 20 22 24 28.2%
Join Parachute 0 0 1 1 8 20 35 41 45 47 49 51 53 55 57 21.7%
Others 8 10 10 12 14 22 27 31 35 41 47 55 63 71 79 18.9%
Total 694 833 935 1,045 1,123 1,206 1,296 1,382 1,473 1,567 1,662 1,760 1,855 1,951 2,046 6.2%
Annual FDA Center Increase 67 139 102 110 78 83 90 86 91 94 95 98 95 96 95
Annual FDA Center Growth (%) 10.0% 20.0% 12.2% 11.8% 7.5% 7.4% 7.5% 6.6% 6.6% 6.4% 6.1% 5.9% 5.4% 5.2% 4.9%

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
US Source Plasma Collections (000 Liters) 39,680 44,165 35,930 36,785 45,025 51,328 53,330 55,570 57,959 60,278 62,930 65,888 69,050 72,365 75,766 5.34%
US Source Collections Growth Annual 14.6% 11.3% -18.6% 2.4% 22.4% 14.0% 3.9% 4.2% 4.3% 4.0% 4.4% 4.7% 4.8% 4.8% 4.7%
US Source Collections Abs Increase (000 L) 5,065 4,485 -8,235 855 8,240 6,303 2,002 2,240 2,390 2,318 2,652 2,958 3,163 3,314 3,401

Avg Collections per Center (Liters) 57,176 53,019 38,428 35,197 40,093 42,561 41,150 40,210 39,348 38,467 37,864 37,436 37,224 37,091 37,031
Avg Collections per Center Change -7.3% -27.5% -8.4% 13.9% 6.2% -3.3% -2.3% -2.1% -2.2% -1.6% -1.1% -0.6% -0.4% -0.2%

61
Forecast of the Number of US Collection Centers to 2032
As the demand for plasma increases, due primarily to the growing demand for
immunoglobulins, the industry at first tried to grow plasma collections by increasing the
size and throughput of the existing plasma collection center networks. This effort was
largely successful over the years 2005 through 2012, where collections grew over 1.5 times
with just a 37% increase in centers. Since 2013, this strategy did not contribute nearly
enough plasma to meet the demand for the resulting IG, so the industry turned to the
strategy of opening up dozens of centers per year to maintain the annual growth. As a
result, the number of centers grew at a 12.0% annual rate from 2015 to 2020, going from
530 in 2015 to 935 by the end of 2020. The largest companies opened more than 20
centers per year over that time. This continued in 2021 with 110 new centers opened, and
78 more centers in 2022, to end the year at 1,123 centers. This is a 9.6% average annual
growth rate during the pandemic from 2020 to 2022. The 2015 to 2022 CAGR fell slightly
to 11.3%, still higher than the overall growth rate of immunoglobulins over that time.

Going forward, the strategy of opening many new centers per year is likely to be the best
path for the industry to continue to meet the need for plasma for fractionation to produce
IG, rather than enlarge centers in already competitive locations. An increase in the
collections per center in some newer, well-located centers will contribute to increasing
overall plasma collections, but it will not be the driver of growth for the entire industry.

In 2023, the forecast expects that 83 new US plasma collection centers will receive FDA
approval, a slightly faster growth than 2022 but below the numbers from 2019 to 2021.
In terms of growth rates, 2023 is 7.4% more centers than 2022, the slowest annual growth
rate in the past 7 years. This is mostly due to the return of donors after the end of the
pandemic, as well as inflation and recession concerns among a group of donors increasing
their desire to donate. A total of 1,206 centers are expected by the end of 2023. This year
the number of centers is forecast to be 45% over the pre-pandemic year of 2019, or a
growth of 9.7% per year. It is expected that US Source Plasma collections will total 51.3M
liters in 2023 or 16.2% over the pre-pandemic year of 2019.

By company, CSL Behring (CSL Plasma) is expected to again have the largest collection
center network, with 330 centers. This is 11 more than 2022 (3.4% growth) and 37% more
than in 2019. All of these centers were developed and built by CSL Plasma internally, as
they did not acquire any centers over the past 4 years. The second largest collection center
network is Grifols (Biomat and acquired centers) and is expected to have 290 centers by
62
the end of 2023, down 8 centers from 2022 (-2.7%). Grifols is the only company forecast
to have fewer centers at the end of 2023 than 2022 and even when compared with 2021.
This is a result of the closure of several centers that were acquired over the past 4 years,
including a few low performing centers acquired from IBBI. In total, about 16 centers
owned by Grifols were closed in the 4th quarter of 2022 and in early 2023. As a result of
these closures, Grifols has just 15% more centers in 2023 year-end than it did in 2019, a
far lower growth than other major collectors. Grifols has grown its center network mainly
through acquisitions, including IBBI, Biotest, BPL, GCAM and some from Kedrion, with
completed at the height of the pandemic when collection center value and prices were at
their highest. An additional 16 centers are expected to be closed by the end of this year.

Takeda (BioLife) is the third largest collector in 2023, a position it has generally held over
the past 7 years. With 209 centers, it will be less than two thirds the size of CSL Behring,
and almost 30% smaller than Grifols. The growth for Takeda’s centers is 8.9% for the past
year, and 77% total growth from 2019 to 2023. This is the highest growth rate of the large
collectors over the past 4 years. Like CSL Behring, Takeda has grown it collection network
mostly through internal growth, choosing to develop and build its own centers instead of
buying them aside from a few one-off purchases.

Octapharma (Octapharma Plasma) is fourth with 174 centers forecast at the end of 2023,
up 4.2% over the previous year. Octapharma has just over half the number of centers of
market leader CSL Behring, while being 15% smaller than third largest Takeda. Since 2019,
Octapharma has grown its collection network by 58%, second highest among the top 4
collectors. Octapharma has largely grown its own network organically, though it has
acquired some centers from Immunotek over the years.

Following the merger of Kedrion and BPL, their combined center network is expected to
be 67 centers in 2023, up 8.0% from the year before. Comparing 2023 to the combined
centers of BPL and Kedrion in 2019 (73 centers) shows that the combined company will
have 8% fewer centers at the end of this year compared with 4 years ago. This largely
stems from the requirement to sell half of BPL’s centers (25 centers to Grifols) in 2021 due
to the United States government CFIUS requirements around Chinese companies holding
plasma collection centers.

ImmunoTek is the largest independent collector of plasma (does not have its own
fractionation facility) and is forecast to have 57 centers by the end of 2023. This is an
63
impressive 46% growth over the prior year, and 256% growth since 2019 when it had just
16 centers. The company changed its collection strategy in 2021. Before that, it built and
ramped up plasma collection centers on contract for plasma fractionation companies and
transferred the centers to the integrated companies after a certain point of maturity. In
2021, the company decided to start building centers to collect plasma for the parent
company, with the intention of selling the plasma on contractual terms to plasma
fractionation companies. This required the company to build and maintain its own centers,
not just transfer completed centers to its customers and so its center count has risen
sharply in the past 2 years. Immunotek now has more centers than all the small companies
had combined in 2021 and is close to 20% of the total of the largest collector (CSL
Behring). Its growth as an independent collector depends on the plasma needs of its
customers, who use Immunotek as a source of collections to supplement their own
network. The growth of Immunotek centers is related to future plasma needs by its
customers, which is expected to moderate in the near term, as discussed below.

There are two other independent collectors who have the same model as Immunotek at
present, but on a smaller scale. This includes B Positive, which is expected to have 15
plasma collection centers by the end of 2023, up from 8 in 2022 and just 1 in 2021. The
second collector is Parachute, which is expected to have 20 plasma centers by the end of
2023, up from 8 in 2022 and just 1 in 2021. The difference between these two companies
and Immunotek or the larger integrated companies is that most of these centers are
smaller, with anywhere from 12-36 beds and a goal of collecting just 15,000 to 35,000
liters per year. The growth of these two companies (and likely more operators in the
future) is one of the reasons why average collections per center is forecasted to decline
in the coming years.

Some other smaller collectors who are also integrated fractionation companies include
ADMA, with 10 centers in by the end of 2023, up from 6 in 2021 and 3 in 2020. LFB is
expected to have 7 centers by the end of this year, up from 5 in 2022 and 3 in 2021, the
latter the first year of US plasma collection center operations by the company. These
centers were set up by Immunotek to help the company get a footprint of operations in
the United States. Finally, GC Pharma is forecast to have 5 centers by the end of 2023, up
from 2 in 2022 as it sold all its previous centers to Grifols back in 2020. For the smaller
players, a total of 22 centers is forecast by the end of 2023, with Hemarus and Southern
Blood Services with 3 each and various other independent collectors with 1 or 2 each,
some of them focusing on hyperimmune or other rare plasma.
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In 2024, the number of new centers opened is forecast to be 90, or slightly more than in
2023. The total nationwide center count in 2024 rises to 1,296 FDA-approved centers, an
increase of 7.5% over 2023, nearly the same growth rate as the previous year. This year
sees lower collections after a recovery of inventory in late 2022 and 2023, and half of the
new centers (45) are from independent and smaller companies, which are still pursuing
growth. These centers will be measurably smaller than the national average. The largest
integrated companies will likely focus more on efficiently increasing per center collections
through faster donation times (mostly CSL Behring) or larger volumes per donor (mostly
Takeda, Grifols, Octapharma and Kedrion). They will open up less centers, just 31 new
centers in 2024, or just 36% of the total growth in 2024.

In 2024, CSL Behring has the most with 338 centers, followed by Grifols with 298 in total.
Takeda/BioLife will have 221 centers, Octapharma 182 and ImmunoTek will have 67
centers. Kedrion rises to 67 centers while Parachute is up to 35 and B Positive has 25
centers.

86 new centers are added in 2025, a 6.7% increase over the previous year, raising the total
in operation to 1,382. This continues a slowdown in growth rate compared to the pervious
10 years, as a result of slower IG demand due to competition as mentioned above. The
2022-2025 CAGR is 7.2%, down from 10.5% from 2019 to 2022. The forecast assumes that
most large collectors continue to grow their center count at similar rates to the industry
average, so the growth per company is nearly the same, though the Takeda grows the
fastest of the large players in 2025 at 6.3% in its pursuit of more centers as its fleet size
remains much smaller than Grifols and CSL. The smaller integrated companies (Kedrion,
ADMA and LFB) and the independent collectors grow more quickly, at double digit rates,
as their center count growth is not equivalent to collections growth in liters, due to their
focus on smaller centers.

From 2026 through 2032, the number of centers added per year ranges from 91 to 98.
This is less per year (despite having more total centers nationwide) than was added in the
pandemic years of 2020 and 2021. The annual growth rate thus declines as the more
constant addition of new centers per year is a smaller percentage of the base as the base
grows each year. The growth in 2026 is 6.6% over the previous year, while in 2027 it falls
to 6.4%, then 5.4% in 2030 and by 2032, the growth is 4.9%. In total centers, the number
of centers rises from 1,473 in 2026 to 1,855 in 2030 and finally 2,046 centers in 2032. In
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comparison, the MRB forecast two years ago forecast 2,137 centers in 2030, or 15% more
centers in that year. The difference is due to declining growth expectations of
immunoglobulin demand, despite the new focus on smaller centers, which are a
counterbalance to slower growth in collection volumes when looking only at center count
numbers.

The 2022 to 2032 average annual growth rate is thus 6.2%, which is higher than the growth
in plasma collections, as detailed below. By 2032, the number of FDA-licensed centers in
the United States is expected to be almost double the 2021 number, and 82% higher than
10 years earlier (2022). The number of FDA-licensed centers goes from 1.7 centers per
million population in 2015 to 3.4 in 2022 or doubling of the density of center per
population in 7 years. The rate in 2032 is forecast to be 5.7 centers per million population
(based on a 2032 population of 359 million), a two thirds higher density of centers per
population in the next 10 years.

While this growth appears to be high and a challenge for the industry to add more centers
in the next 9 years than existed in 2019, it is a slower pace of growth than was forecasted
two years ago. Furthermore, the MRB believes it will be necessary to grow at
approximately the forecasted values in order to reach the necessary plasma collections
volumes in 2032 for the base forecast need of plasma for immunoglobulin demand in the
United States and globally. This assumes declining productivity of each center (average
collections per center), as the competition and less ideal center locations lead to lower
average collections, as discussed below.

Most large companies, which own over three quarters of the total centers, grow at similar
annual rates per year from 2026 through 2032 in the forecast, as each wants to maintain
its share of centers and plasma collections as the market grows. Of the largest four
companies, Takeda/BioLife grows the fasted at 5.5% per year on average, followed by
Octapharma at 4.5%, CSL at 4.4% and Grifols at 3.6%. This variation in growth rate does
have a lot to do with the starting point (2022) and whether the company had enough (or
extra) centers at that time point. Takeda still had too few centers in 2022 for its total
collections volumes, so it needed to add centers to grow, as most were at capacity. In
contrast, due to the large number of acquisitions, Grifols found itself with too many
centers at the end of 2022, and closed some in 2023. Thus it does not need to add as
many centers over the next 9 years to reach its collections growth, because many of the
centers were far below capacity it can grow collections by increasing capacity utilization.
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Kedrion grows faster in the next few years to recuperate collections compared to its past
before BPL sold half its collections. As noted in the assumptions above, if one company
were to change its strategy for new centers to build much smaller ones, they would need
to open more centers to collect the same amount of plasma than fewer, but larger centers.
This would cause them to grow faster in center count than their peers, but their overall
share of total plasma collections would likely be similar, as dictated by their
immunoglobulin demand needs.

Forecast of US Plasma Collection Volumes to 2032

With the demand for IG growing at high single digits globally before the pandemic but
more likely to grow over 5-6% per year for the next decade, the collections industry will
need to keep up with final product demand on a global basis. Today, the United States
source plasma is over 60% of the total plasma used by the global fractionation industry,
and thus if global demand for IG is going to continue to rise at around 5% or higher per
year, the US plasma collection industry is going to have to grow at a very similar rate to
keep up, as some other sources of plasma for fractionation, like recovered plasma will not
grow at the same rate. However, unlike the forecast from two years ago, the present
forecast does assume that plasma for fractionation outside the United States will grow
faster than US plasma collections between today and 2032. While the global collections
in 2023 may be slower than double digit US collections growth, we expect this to reverse
in future years, as efforts by global fractionators and governments around the world begin
to bear fruit in terms of more plasmapheresis (paid or unpaid) in parts of the world where
it is not conducted today, leading to higher growth rates of plasma collected for
fractionation. This can be seen in countries like Egypt, in which Grifols has partnered with
the military government to set up compensated plasma collection centers throughout the
country, and which changed its donation frequency and volumes to match those of the
United States. See the recently released MRB report titled “Global Blood and Plasma
Collections and Use 2021/22” for more details about ex-US plasma collections. More
countries are likely to set up commercial plasma collection centers in the future, creating
high rates of growth in those countries and raising the ex-US plasma collection growth
rate overall. Still, despite some countries going from very little plasma collected in 2022
to potentially a million or more liters by the end of the forecast, this report only expects
ex-US collections to be up to 1 percentage point faster than US collections growth per
year on average from 2022 to 2032. As a result, US plasma collections will need to grow
at close to the overall IG demand growth from 2023 to 2032, which is 5% or more.
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Opening many centers in under-penetrated parts of the United States is likely to be the
favored strategy for achieving this US collections growth, even if the locations are under-
penetrated because they are not ideal from one of the many metrics for choosing a
plasma center. It could be the potential donor population is somewhat small, or there is
not a strong base of skilled workers already present nearby, or even the demographics
are not ideal. The places that are under-penetrated today are that way because they don’t
have the ideal characteristics. If they did, they would not be under-penetrated as
companies would have built collection centers in those areas. Thus, new locations will
have non-ideal values for one or even more of the main criteria to put a center, but the
alternative is to put the 13th center in Indianapolis, and face intense competition for a
small portion of the city’s residents and high donor fees.

The forecast to 2032 predicts US plasma collections growth in liters to be 5.3% annually
from 2022 through 2032. This will allow the global IG growth to achieve a growth rate
equal to or more than 5% per year. However, when comparing the growth of US plasma
collections from 2019 to the growth from before the COVID19 pandemic, the 2019-2032
annual average growth rate is just 4.3%, a lower figure.

In 2022, the US plasma collections were 45 million liters, up 22% from the year before, or
an increase of over 8 million liters from the previous year. The average collections per
center rose significantly, from just over 35,000 liters in 2021 to over 40,000 liters in 2022,
as a result of donors returning in high volume to donor centers as the pandemic
concluded and inflation pushed people to look for alternative income sources. This is a
per-center collection increase of 14% in one year. This strong growth pushed overall
collections above the previous peak of 44 million liters in 2019, though there were 290
more centers, or 35% more in total collecting plasma in 2022 compared with 2019.

The strong growth in collections in 2022 went a long way towards the fractionation
industry recovering to more normal inventory levels by the end of the year. However,
companies were still not satisfied with their raw plasma and work-in-progress inventory
levels at the beginning of 2023, and wanted to have a larger buffer for emergencies,
especially since the companies has just gone through an intense period of supply
shortages. Thus, the collection companies continued to grow collections strongly in the
first half of 2023, up 20-25% compared to the same period in 2022. The forecast assumes
that by the middle of 2023, most fractionation companies are comfortable with their
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inventory levels and ability to meet demand for future plasma needs in the mid-term.
They will not need to collect plasma in significant excess to the rates of fractionation on
an individual company basis. As they slow collections to rates more commensurate with
IG demand growth (mid-single digits), the second half of 2023 is likely to see only a slight
growth in collections over 2022 levels. Overall, this leads to a strong 2023 full year for
collections, with 14% increase in plasma collections over 2022, for a total of 51.3 million
liters collected, an increase of over 6 million liters. The average collections per center rises
to 42,600 liters, up 21% from the low point in the pandemic (2021), but still nearly 20%
below the average in 2019. From 2019 to 2023, collection volume growth averages a 3.8%
CAGR, a low figure but in line with global IG growth during this supply constrained
pandemic period.

Collections continue to slow materially in 2024, as the slow growth of the second half of
2023 continues into the first half of 2024 against comparisons to the previous year. The
full year growth for 2024 is just 3.9%, or equivalent to the 2019 to 2023 average, as
companies attempt to collect plasma at the lowest possible cost, which is discussed in
more detail in chapter 7. It also means the inventory levels at the end of 2024 are likely to
be slightly lower than at the end of 2023, as companies right size their inventory levels as
the pandemic fades into the past and companies seek to maximize their working capital.
Total collections in 2024 are forecast to be 53.3 million liters, an increase of 2.0 million
liters over the previous year.

Due to the growth of new centers, and their placement in progressively less-ideal
locations (as the best locations already have centers), the average collections per center
begins a slow decline of 1-3% per year from 2024, a trend it maintains throughout the
forecast to 2032. In 2024, the average collections fall slightly to 41,150 liters, a decline of
3.3% from the previous year’s average. In 2025, the average collections drop 2.3% to
40,200 liters, or just slightly higher than the 2022 average. Total collections grow 4.2% in
2025 to reach 56 million liters, or a 2.2-million-liter annual increase. The annual collections
growth rate from 2022 to 2025 is 7.3%, or significantly above the 2019-2022 CAGR of
0.6%, showing the long-lasting impact on the COVID19 pandemic in the early 2020s. The
average collections per center again declines in 2026, by 2.2%, to reach 39,300 liters for
the same reasons as each of the subsequent years (new centers are in less-ideal locations
with smaller potential donor pools and smaller center footprints).

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For the mid and outer years of the forecast (2026-2032), the trend is for collections to
follow a similar pattern for each year. The growth of collections is forecast to roughly
match US IG demand growth, though is slightly below global IG growth due to faster ex-
US plasma collections growth, as mentioned above. This results in a fairly constant growth
rate for each year from 2026 to 2032, at about 4-5% annual increase. On an incremental
liters basis, this means that the annual increase is 2.3 to 3.0 million liters per year from
2026 through 2029. It then grows 3.1-3.4 million liters per year in the last 3 years of the
forecast. Since the centers are growing at 5-6% per year, but the collections volume is
growing 4-5% per year, the average collections per center continues to decrease a few
percent per year. In 2026, the average is below 40,000 liters for the first time since 2021,
and the average falls a few hundred liters per year on average to reach 37,000 liters per
center in the final year of the forecast. This is just 5% higher than the average of the worst
part of the pandemic in 2021 but is expected given the growth in smaller new center
footprints going forward. The total average decline from 2022 to 2032 is 7.6% per center.
The average does not explain the whole story, though, as some mature centers will still
be able to increase their center average as the rise in donation fees increases the local
pool of available donors, but many new centers will not reach the averages of the older
centers in prime locations, even once they reach maturity by design. As a result, the overall
average will decline slightly each year as newer centers with lower productivity are added.

The total collections rise from 58.0 million liters in 2026 to 69.1 million liters in 2030 and
75.8 million liters in 2032. The CAGR from 2019 to 2032 is 4.2% per year, while the 2022-
2032 CAGR is higher at 5.3% per year due to fewer years and a similar absolute volume
change. This results in a total collection of 211 liters per thousand population in 2032, up
from 136 liters in 2022, a per capita increase of 55% in 10 years. Given the fact that US
collection is over 60% of the total worldwide plasma for fractionation, this growth would
support global annual IG growth of 4.0-5.5% annually from a 2019-2032 time period, or
a 5.0-6.5% IG annual growth rate from 2022-2032. The global fractionation volumes also
depend on the growth of plasma for fractionation outside of the United States, which is
likely to be slightly higher than the United States rate in the next 10 years, though a full
explanation is beyond the scope of this report (contact MRB for more details). The
forecast presented here appears to be a plausible level of growth the industry can sustain
each year, though it will require a steady increase in the number of centers, and the
accompanying infrastructure and personnel to reach this, along with higher donor fees,
as discussed in chapter 7 below.

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Challenges due to the growth in plasma centers
Given the robust growth of plasma centers in the US over the last 7 years and the forecast
for continued (albeit slower) growth, the challenges facing the industry have grown as the
number of centers have increased. Most acutely, this is illustrated by the increases seen
in donor compensation and staffing costs. Some of this was caused by the pandemic and
changes in donor behavior but the vast majority is a result of competition between
centers, and running out of attractive locations in which to locate a center with a certain
footprint, and a continued lack of high quality manpower.

Competition for good locations

Given the plasma industry’s 112% increase in the number of plasma centers since the start
of 2015, the market has become more and more crowded. More centers are now in direct
competition with one another than before. Given that the pool of potential donors is
somewhat constant, depending on the economic environment and donor incentive rates,
the best locations will be taken up as additional centers are built. Furthermore, the next
best location will be less attractive than the current average of the locations, because the
companies start with the best spots and move further down the list of ideal locations with
each new center built. This process has led to a difficult, competitive environment for
collectors which seek suitable locations, with often decreasing marginal attractive
attributes. This is further hampered by some local municipality zoning rules. This will
eventually lead to lower average collections volumes per center as their number continues
to increase and they compete with one another.

A potential answer to this for collectors is to be flexible in the model of the new centers.
By shrinking the general footprint of a center, collectors can build in towns and cities that
could not support a massive 15,000 square foot, 70-bed center. That is not to say that
collectors are not trying to build large facilities where they believe they will succeed, it is
just harder to find suitable locations for those compared with 5 years ago.

The struggle to find these locations is evidenced by data providers that have helped
collectors find potential locations across a wide range of attributes. In particular, Buxton
has developed an offering for plasma center location finding, and they are used by a
number of collectors as they expand their fleets.

One bright spot for collectors today is the unfolding demand for brick-and-mortar retail
and commercial real estate market. As retail stores continue to be pressured due to the
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continuing shift to e-commerce and online shopping, this may free up some physical
spaces close to good donor populations. However, every collection company will try to
get the same ideal locations, causing fierce competition among collectors for the best
spots.

Competition for donors

As discussed in the previous paragraph, the growing competition among companies will
be mirrored at the donor level. As more centers are built in closer proximity to each other,
targeting the same donor population, the only way that centers will be able to continue
to attract new donors is to increase donor fees and incentives or find new donor
populations. The latter is likely a tall order given the strict regulatory requirements to
donate which are unlikely to change. That leaves donor fees as the major lever to modify
to bring in new donors. This trend has been observed in the increase of donor fees over
the last 5 years and it is likely to continue in the future, though influenced by
macroeconomic factors like recessions or job losses. Donor fees were already steadily on
the rise before the COVID-19 pandemic, rising from $37 per liter in 2015 to $65 in 2020.
The pandemic caused donor fees to increase substantially. The U.S. government
unleashed one of the most aggressive stimulus spending campaigns in the history of the
country with much of that being sent directly to consumers. This was deemed necessary
to keep the economy from falling off a cliff given the impact on economic activity. That
said, it went on for much longer and much further than direct dollar for dollar impacts on
people’s earning power. This meant that there was much less of an incentive to go out
and donate plasma unless it was for a much higher amount. This coupled with collectors’
desperation to have donations as they saw their inventory levels decline, which pushed
donor fees higher and higher through the pandemic. Donor incentives peaked in Q2 2022
with averages reaching around $95 per liter, with some collectors having averages over
$100. Since that time, with the recovery in donation volumes picking up steam, average
donor incentives have dropped to the mid-$80’s. We believe that this will reach the low
$80’s per liter by the end of this year on average depending on the economic
environment.

Based on the increased competition between donor centers in the US, and the continued
growth in global IG demand, the MRB believes that the recently elevated donor fees are
here to stay despite a respite in 2023 due to macro-economic conditions. The donation
rate will continue to rise, as discussed in chapter 7 along with other components of the
cost to collect plasma.
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The Quest for Talent
Running a plasma center has always been a very difficult task given the highly regulated
nature of all operations and thin profit margins. Even with SOPs that describe the process
in detail, running a plasma center is complex and tedious with all the work in a center
detail-oriented. The qualifications and training of employees are critical, not just from a
regulatory standpoint but also from a donor experience perspective. Plasma collection is
one industry where virtually all feedback is negative. When any employee makes a
mistake, it is noted as part of the quality program and corrective action is proposed.
Otherwise, there is no positive feedback when employees to their job correctly, in
accordance with all SOPs.

As more collection centers are built, the competition between centers has become more
acute and donors will have more options. They will go to where they have the best
experience. If phlebotomists at a center do not perform well, donors will look to switch to
a different center, and since there are increasing number of centers in many metro areas,
this is a likely outcome. The main determinant of center success from an operational
perspective (outside of location), is the center managements’ ability. There is a direct
relationship between the average collections of a center and staff morale, performance in
external regulatory audits, internal audits, and the ratings and performance of center
management. Keeping these facts in mind when deciding on a location for a new center
is key. For example, if there is a lack of nursing resources or phlebotomists in an area,
even if it is likely a good area to recruit donors, it may be a poor business decision to
open a center in that area. Otherwise, a collector may need to motivate staff by arranging
travel to that location, or even paying for it. For this reason, the largest plasma collection
organizations have set up their own training institutes to create their own qualified
personnel, as discussed in chapter 4.

The entire staffing situation was exacerbated by the COVID-19 pandemic. As outlined
above in the challenge to attract donors, the stimulus spending that disincentivized
donation also disincentivized individuals or potential staff from working in plasma centers.
In addition, the grueling nature of the work, the general burn-out of healthcare workers
throughout the pandemic, and the risk of getting infected made it extremely difficult for
plasma centers to adequately staff locations throughout the pandemic. When centers
were able to hire staff, it was at higher pay than the typical hourly rate that was seen pre-
pandemic. Since late 2022, this pressure has eased a bit as centers have been able to find
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more employees. That said, staffing costs have remained elevated, similar to donor
incentives. This is covered in additional detail below in Chapter 7. Going forward, given
the focus on cost containment and efficiency, there will be a healthy tension between
sticking to a strict budget in order to have low overhead for collections while having
adequate staff to collect the necessary/potential volume at a center. Each company will
make their own decisions on this tradeoff, with some pursuing more donations/growth
while others look for lowest cost per liter to collect and sacrifice growth.

Seasonality
It is important to understand the seasonality of a center’s activity as there is a clear ebb
and flow in the collections volume across both a typical month and year. The extent to
which this variability occurs depends on a centers’ location and the socio-demographic
aspects of its surrounding population.

Over the course of a typical month the first week of the month is the weakest from a
volume perspective and it builds from there throughout the month. The reason for this is
that several government benefits are paid out the first of the month, reducing the need
to donate plasma at the beginning of the month. It offers many routine donors the ability
to take half or the whole first week of the month off. However, a number of collectors
programs encourage donors to come as many times as possible in a month. Those donors
who maximize their earnings will continuously come in to donate without taking any
break.

Broadly throughout the year, the busiest time for a collection center is from September
through the December holidays, with collections peaking in mid-December. After
Christmas and New Year's, collections taper off, and continue to decline in the second half
of January, reaching the lowest point in March. From that bottom in March collections
begin to grow consistently and build through the spring, summer and reach their peak
again in the fall before Christmas. The cycle then repeats itself for the next 12 months.

This cyclical trend is caused by the payment dates of tax refunds and other benefits, such
as the Earned Income Tax Credit (EITC). Such programs as the EITC and others represent
a high percentage of many donors’ annual income. Once these benefits have been paid
to these donors, they are less inclined to donate for some time, causing the cycle
described above. As these earnings are spent over time, donors then start to come back
into the center needing more income. In the summer, spending money on leisure and
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recreation is a driver for donation. The fall through the holidays are the strongest time of
the year for collections as donors are looking to earn as much extra cash as possible for
the holidays. It is also toward the end of year when much of the annual EITC benefits have
been spent (since it has been close to a year since receiving them).

It was unclear the passage of the stimulus bill on March 11, 2021 would have any
implications for the seasonal nature of plasma collections. The Bill had certain stipulations
that changed the payment of the EITC to be monthly instead of annually. It was thought
that this might have the effect of increasing collections during the historically slowest
times of the year since it wouldn’t be an annual “windfall” for recipients. That said, through
tax season in 2022 and thus far in 2023, a seasonal dip in February/March was observed.

The seasonality of a plasma center also depends on its location and the makeup of its
donor population. For example, if a center is near a college campus, its seasonality will
generally reflect the academic year: when students are on campus, higher collections
volumes are generated in the fall and February through May when schools are in session
and lower collections during the summer (June through August) and holidays (Mid-
December through Mid-January).

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 4. New Center Development

From 2017 to 2022, the supply of plasma from existing centers did not keep pace with
demand for immunoglobulins. To meet the growing demand, collectors/fractionators
have endeavored to raise donations by building and opening many new centers each year.
The pace of expansion has been rapid with the number of centers in the US going from
671 in 2017 to 1,155 as of March 2023, an annual growth rate of 11%. Given the decrease
in collections during the pandemic years, collectors now want to grow into the capacity
from a footprint and donation beds perspective that they built in new centers the past 3
years, so they don’t need to build quite as many centers in 2023 as in previous years.
Beyond the short term, the number of centers in the US are projected to go to over 2000
in the next 10 years. The next logical question is how will all of these new centers be built?

In many ways, new center development has become an acute business challenge for
collectors and fractionators. This section will overview the process, average timelines, and
costs of new center development as identified through MRB’s industry surveys. Over the
last two years since the previous release of this report, several metrics have shifted, given
the distortions of the COVID-19 pandemic. For over four years, fractionators/collectors
have had to shift their strategy to think and act more like other companies with large retail
footprints which must deal with increased competition for spaces. This has led to
collectors engaging with large national real estate brokers and consultants such as CBRE,
JLL, and Cushman & Wakefield to aggressively search for locations across the country.
They have also utilized advanced data services such as Buxton to identify and score
prospective locations. These services consider a myriad of demographic factors including
population size and density, average income, public transit infrastructure, and most
importantly, proximity to competitors when recommending suitable new collection center
locations.

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At the same time, plasma collection companies have also expanded their own internal
capabilities, hiring teams to specifically focus on expansion with resources covering
everything from search and evaluation of potential new locations or existing centers to
lease negotiation, and even construction. Previously, it was unnecessary to have such in-
house capability, but over the last five years, with the rate of expansion growing to such
a high velocity (100 new centers per year across the industry), it made sense for large
collectors to develop this competency themselves. While it is unclear how the slightly
slowing rate of center growth over the next 1 to 2 years will impact staffing levels at
companies who are focused on cost efficiency and are sensitive to overhead costs, it is
unlikely that they will completely get rid of these capabilities. In the medium to long term,
building out new centers cost efficiently and on schedule will be critical to the success of
each collector/fractionator. With the changes and diversity of center sizes that are likely
to be built out in the coming years, having expertise in house will be practically required
for companies to be competitive.

While collectors previously had to be mindful about competing with other collectors in a
geography, there was typically a significant amount of open space where new centers
could be built without competing. Given the 290 new centers in the last 4 years, the
industry is now in the situation where many of the “best/good” locations have been taken
already and the choice is either to go into a competitive geography with a significant
number of competitive centers or go into an area that might not apparently be a good
match for a typical center, in which case there is a risk that the location will not be
successful.

Aside from the typical larger centers being built in uncompetitive areas, the past few years
saw a trend toward collectors opening one large parent center in a particular metropolitan
area with several smaller satellite locations around it in order to dissuade competitors
from entering the market. While this is still happening in less developed markets, the
major focus has now shifted to a higher number of smaller centers across a diversity of
geographies. Previously, collectors considered opening a center in the vicinity of another
center as limiting their downside risk. They know that at least one plasma center has
succeeded in operating in the area and there are enough donors and employees for its
needs. While there is still a desire to leverage marketing, recruiting and staffing dollars
across one metro area, getting too close to a competitor or going into an oversaturated
marker is seen as being a riskier investment today when compared with placing slightly
smaller bets in more locations. This is a significant strategy shift from what was observed
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two years ago in the previous MRB report. The prioritization of cost efficiency and cost
per liter has shifted the focus of many collectors from the short-supply environment we
had seen through mid-2022 to one of efficiency and cost containment.

When considering donating, people weigh the incentive they would earn with the distance
they have to travel and effort (time or otherwise) to earn it. The specific attributes depend
on the geography/density of the area where the center is located, but donors usually live
within 12 miles of a center where they donate. Smaller centers allow for collectors to be
located closer to additional donor populations. This makes it more convenient for donors
to come in, thus making it harder for a competitor to enter the area. These smaller centers
also make it easier to both find a location given it has a smaller footprint and therefore
have more target real estate options since they don’t have to with a larger space. It also
allows collectors to go into cities and towns that did not have plasma centers historically
as a smaller center requires a smaller donor population to support it.

Going forward, new centers are expected to be set up either in areas where a smaller
center can fit into a location in a metro area with other centers nearby, or they will go into
areas that have not historically seen much plasma donation. As has been outlined,
collectors have spent a decade developing new centers at breakneck speed. While there
were significant supply constraints throughout that time which justified continued
investment in new centers, the industry needs some time to grow into the capacity of
centers that they have recently built. Moderating IG demand lowers the need to secure
product at all costs. At the same time, the cost to collect has increased at such a rate that
it has significantly compressed the margins of all companies. This has precipitated the
need to prioritize cost efficiency over growth for the next couple years.

Common attributes of new centers

The average center collected over 53,000 liters per year in 2019, but it dropped to just
over 40,500 liters in 2022, and this change has affected the new center design capacity.
New centers were previously designed to collect as much as 70,000 – 90,000 liters per
year depending on their location. This has come down as will be discussed. Across the
industry, new centers in development averaged 9,000 square feet with a range of 4,000
to 15,000 square feet in 2023. This is down from an average of 10,000 square feet with a
range of 7,000 to 18,000 square feet in 2020. In general, it is expected that a 9,000 to
11,000 square foot space will collect 50,000 – 70,000 liters depending on local
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competition. An 11,000 to 15,000 square foot space is expected to collect 60,000 – 80,000
liters while a center with 5,000 – 9,000 square feet will collect between 20,000 and 50,000
liters annually.

Typical Size and Goal Collection Volume For New Centers

Center Type Size (sq feet) Volume (liters)
Average-Typical 9,000-11,000 50,000 -70,000
Large Center 11,000-15,000 60,000 - 80,000
Small Center 5,000-9,000 20,000– 50,000

Given the broad competition between centers, size is less important than location and the
ability for the population around the center to support its anticipated volume. As outlined
in the 10-year center forecast, a significant number of new centers will be required to
increase collections across the country particularly as the average volume per center
decreases. In the coming years, plasma collectors will build collection centers with a
variety of sizes in order to pursue a variety of donor populations and geographies.

Beyond square footage, collectors have become attentive to the need to improve the
donor experience. This has impacted the layout and design of these new locations. First
and foremost, the areas of a collection center opened to the public have been made more
attractive and there is a drive to make all new centers feel bright, clean, welcoming, safe
and comfortable. This has increased construction costs but has been found to increase
donor and staff retention. Almost all centers now offer free Wi-Fi to donors so they can
use their devices while donating, and there are usually TVs mounted on the donor floor
allowing those donors who are not using a device or reading to watch whatever
entertainment is on. For the center staff, some improvements have been introduced, such
as a staff breakroom with refrigerator, microwave, etc. along with lockers for the
employees. These design and layout choices reflect the collectors’ goal to increase both
donor and staff retention and satisfaction.

Timeline of a Center’s Construction

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Construction Timeline
Step Average Time Range
Location & Lease Signing 4 months 1 – 7 months
Initial Permits 1.5 months 1 – 8 months
Construction (Pre-existing structure) 6 months 4 – 8 months
Occupancy Certificate 4 weeks 1 – 12 weeks
Staff Hiring/Training 2 months 2 – 4 months
Total Time Pre-Collection 15.5 months 9 – 39 months
Ramp up Collections 32 months 18 – 42 months

In view of the unique footprint and design of a plasma center, there are long development
timelines to build a center when compared with other consumer-facing retail real estate
uses. This has only increased over the last two years given disruptions in all supply chains
including raw building materials and equipment- specifically HVAC and freezer related
items. The average timeframes for each step of the process are discussed below as well
as other requirements and considerations involved in a plasma center development
process. There is significant variability in each step by geography. As with everything in
construction/development, timelines are very important, and managing them are even
more important because if a fractionator is counting on a certain volume of plasma for
fractionation and if it does not materialize, it must either lower production or buy plasma
from another company, generally at a premium if it is even available. There is a long delay,
averaging 4 to 5 years between the decision to build a center and its functioning at full
capacity and fully contributing to a company’s fractionation volume.

Expansion Decision Process

If a company is looking to fractionate more plasma, it has a few options:
- Increase the collection capacity of its existing centers,
- Build new centers themselves,
- Contract with companies that specialize in building and opening centers for others,
- Purchase existing centers, or
- Buy source plasma from independent collectors or other fractionators that have a
surplus of product.

The last two options are difficult because either there are only few remaining independent
centers and oftentimes most of their production is locked up in long-term supply

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contracts or other fractionators want to hold on to their own product and do not want to
enable their competitors to produce more. Purchasing existing centers is also a tough
option given that there are very few independent collectors in the market and those that
are available do not necessarily have the scale needed to really ramp up production for
fractionators. Contracting with a company that builds centers (most notably Immunotek)
could be a good option for companies without their own internal expansion capabilities,
but it depends on what sort of skills a company wants to have internally. For most
fractionators this leaves building their own centers as the top choice in order to expand
the collection base.

For the independent collectors, the decision to expand or not is predicated on the current
and expected plasma supply/demand imbalance. For the past several years, most
companies sought expansion, a trend reflected in the historical totals. For the future,
growth overall is still expected, despite some slight slowdown in the near-term forecast.
Because of their motivations and based on historical precedence, independent collectors
were growing faster in the recent past and present than those owned by fractionation
companies. Given the continued increase of the immunoglobulin demand, this expansion
trend is likely to continue over the long run, but not at the rate of the pandemic influenced
past 3 years. Growing collections in turn will push up the cost of plasma and encourage
more independent collectors to enter the market despite the barriers to enter in the
industry, including regulatory and operational complexity, and the high financial up-front
cost to start. In view of the continued demand for plasma therapies, the independent
collectors will most likely be able to sell the volume they collect, though not always at
high prices. At worst, they will have to ship some of their plasma product overseas and
sell it at a lower price (likely at a loss).

New Center Development Process

This section outlines the general steps to build and develop plasma collection centers.
Included below are general timelines that have been seen in the market to date.

Identification of a location and lease negotiation:

This is arguably the most critical step in the process in opening a new center. The location
tends to make or break a center in terms of collection volume. This step is the crucial
convergence of three main points: area demographics, space layout and competition.

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From a demographic standpoint, it is important to be in an area that has relatively low
viral rates and is safe. The viral rates are important if the collector wants the center to be
IQPP-certified by the PPTA, which requires a designated center to remain below certain
viral thresholds. With CSL Plasma leaving IQPP, they may no longer need to abide by this
requirement, though it may still be in their interest to do so. Safety is also important to
provide good donor and staff experiences which will increase retention rates of both. At
the same time, it is important to ascertain whether the demographics of the population
surrounding the contemplated center is likely to support a plasma center.

According to the Census Bureau, median household income in the US was $70,784 in
2021. Donors have lower than average income and typically live in a household with
median income of less than $60,000. An attractive location for a plasma center would be
in a location within a 20 miles radius of a population at this median income level. This is
based on the observation that most donors live within 12 miles of the center where they
donate although this distance may be higher in a rural or suburban area. The proximity of
a potential center to public transportation is also an attractive attribute for a plasma
center as many donors use public transportation to get to the center if they don’t have
their own cars.

The layout of a space is also important when considering a location. Even with promising
demographics in the surroundings of a contemplated center, limited competition and
favorable awareness of plasma donation, a poor footprint or layout may be
counterproductive for a collector and negatively impact the center’s efficiency.
Historically, each company has one typical center footprint that it adjusts slightly to meet
the requirements of a particular location. For example, a long and narrow center may
make the donor and product flows difficult to manage. This could negatively affect
volume, average donation times, and product safety. For this reason, a number of
collectors pass on locations in shopping centers as they just did not fit with their standard
layout even though the location might have been favorable otherwise.

More recently, with the focus on cost efficiency and the desire to go into less competitive
areas, companies have started experimenting with multiple “set” footprints, and are open
to building a few different sizes of collection centers, including those with more
rectangular proportions. Each of those models will still look for a set list of attributes
including size in each potential location. Having these few center layouts to choose from

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will allow centers to be built in areas that have historically been underserved, creating a
competitive advantage to those which have just one center layout model.

The final piece to identifying the location consists of assessing the competitive
environment around the contemplated location. Will the new center be the 10th location
in the area or the second? Sometimes it might be better to be the second collector
company in an area as there is no need to educate the potential donor population about
plasma donation. If it is a crowded area with many plasma centers, donor incentives and
staffing costs will tend to be pushed upward over time even though the donor population
likely has a high level of motivation and awareness to donate plasma. At the present time,
there are few geographic areas of size that are truly untapped and many of the best
markets have become extremely crowded, like large Texas metro areas. Collectors are now
open to moving into newly opened markets or going into markets that were not
traditionally served by plasma centers in the past.

This step in the process can take a significant period of time and has a large variability.
Taking four months on average, it can take one to seven months (or longer). This average
is the same as it was in 2020, however the range has increased from 2 to 6 months.
Experience shows that collectors end up leasing and occupying one out of every six or
seven locations they have looked at in detail.

Lease negotiation and notes on landlords:

Virtually all institutional landlords are now aware of the use of real estate to build plasma
centers. At the present time, commercial retail space is not doing well given the shift to
online retail and the challenges caused by the COVID19 Pandemic. This has opened up a
number of locations for potential use for setting up plasma collection centers. Of late,
collectors have had the best success with strip malls and traditional malls as these spaces
have been hurt the most by the current trends in retail. This has enabled collectors to get
good deals on such space. Furthermore, since these locations have been designed for
large retailers, the layout of the space is typically wide open, making it easier for collectors
to use their standard footprint. The caveat to this is that given the competition between
collectors for space, they are generally looking in the same areas and it is typical that
multiple collectors would be interested in and competing for leases at the same locations
as they become available, and only the highest bidder will get the lease.

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Stand-alone centers, built from the ground up, while attractive, are now less popular than
centers in existing buildings because of the long time required for their construction, the
delays in obtaining permits and regulatory approval. As mentioned earlier, most collectors
have formed in-house teams and engage large commercial real estate brokers to pursue
and close real estate transactions aimed at increasing the size of their plasma collection
centers’ fleet.

Permits and Authorizations:

This activity encompasses the local/municipal oversight of a center building project.

Whether a company plans to build a new center on a bare piece of land, or it uses existing
premises within a retail space, a shopping mall, or a strip mall, obtaining the necessary
permits is a key part of the center’s development process. This includes all approvals from
the preliminary approvals before any work is undertaken through the receipt of the final
certificate of occupancy which gives the center its ability to start collection operations.
The timing of this step in the center’s development is unpredictable, due to the variability
of approval times for each individual local/municipal authorities and the number and
nature of regulatory approvals required in each locality.

On average it takes 6 weeks to obtain the initial permits for a buildout, with a range of
one to eight months. The range of this timeframe has expanded in both directions since
the report was last updated two years ago. This is a function of municipalities that are
familiar with plasma collection as real estate use are generally faster than they had
previously been. In addition, the backlog and bottlenecks that were seen due to COVID19
disruptions are easing. At the same time, given the search for non-competitive locations,
collectors are now expanding in areas that do not have many plasma centers, or are
expanding in the west and northeast of the country- areas that generally have much
longer municipal approval timelines. The issuance of the final certificate of occupancy
once work is complete takes four weeks with a range of one week to four months. These
delays can be longer under special circumstances (such as a fire inspector from an
underfunded municipality not having an opening in his or her schedule for four months,
causing a delay).

Construction Timeline:

This is the time it takes for the construction of the space once all permits have been
received by the municipality. The variability here is dependent on how involved the build

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out project is and the skill of the general contractor (GC) and subcontractors in charge of
executing the project. It is also a function of the delays in the delivery of all materials,
furniture, fixtures, and equipment (FF&E), including some specialized pieces of equipment
required in a plasma center such as the freezer. This process step starts when the permits
have been obtained and continues until the opening of the center for collections.

The average construction time is six months with the range being four to eight months in
pre-existing structures or commercial spaces. The construction of centers built from the
ground up is longer because the complexity of the construction is higher. However, self-
standing buildings allow the center to be designed for maximum efficiency. These
timelines are longer than two years ago when the average was five months with a range
of four to six months. The primary driver of this lengthening is disruptions in supply chains
due to the COVID19 pandemic. While this impacted most industries, construction was
particularly hard hit with shortages in building materials and equipment. The lead time
for freezers went up significantly which will be discussed later in this section.

Staff Training and Opening

A well-trained staff is critical for the operation of a plasma collection facility. Most
collectors hire staff 2 months before a center opens its doors to donors. There are a few
routes that companies go in training a new staff for new centers.

Some of the larger companies have a “university” or centralized training facility where all
employees, after being hired, are brought in to train together in their functional areas.
Trainees are brought to the central location to learn the SOP’s (Standard Operating
Procedures) of the collector and train in their functional area. This approach can be
expensive if entire new staff are trained for several new centers. On the other hand, this
approach builds a cohesive core team and creates a culture that is reflective of the
company. It also forges strong comradery between the team members who are working
in the same location and across centers A downside to this approach is that a collector
may spend a great deal of money to train a staff and then soon after, that employee may
leave their positions and the collector will never see a return on that significant upfront
cost. The high turnover rates that most plasma collectors see across their labor force only
exacerbate this risk, as discussed below. Only the largest companies take this approach
to ensure that their center managers and staff are properly trained from a quality and
culture standpoint.

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A second approach is to have opening “SWAT” teams. These are seasoned operators who
have worked for several years at collection centers. They travel around and jump from
new location to new location. They help get a new center up and running and gradually
hire new employees who are trained by the experienced team. As more new employees
are hired, the experienced group rolls off the center to the next new center location. This
approach is more typically used with high-level center management but may also include
the line staff. The benefits of this is to have seasoned veterans come in and set up the
center and train the staff from the initial stages of the center. The experience from the
veteran operators is invaluable when training a new staff. It also allows the new staff to
be trained “live” with actual donors and real-life situations, in contrast to the classroom
environment of a company “university”. The downsides to this approach are usually visible
when it is time for the SWAT team to move on to the next new center. If the staff that
remains is not sufficiently trained or does not feel ready, the performance of the center
will suffer. It can also drastically changes the dynamic of the people working in the
organization when the leadership turns over.

Another method consists of hiring a local staff and having the staff from other centers in
the area train the new employees before they move to the new center when it opens. This
is the approach taken by smaller collection operations as they do not have the resources
to invest in the other options. A benefit of this method is that a relationship has been
formed with the management and staff in the other centers in the area. This staff may be
able to help and deal with the same regional-based issues (a snowstorm, power outage,
higher viral rates etc.). Conversely, some employees may feel isolated and lack proper
support, training and back up when they do leave and move into the new center.

The hiring of new center management (both operational and quality) is probably the
hardest and most important task to accomplish as a new center is opened. As in many
organizations, good management and leadership are hard to find. In a highly regulated
industry where safety is paramount, this challenge is magnified. A good center manager
is well organized and process oriented. All the managers’ actions are dictated by the
Standard Operating Procedures (SOPs). From an interpersonal standpoint, the managers
need to be good with other people as motivating staff, mitigating problems between staff
and donors, and between donors themselves is a daily challenge. On average, it can take
up to 6 months to recruit a new center management team. Similar to the opening center
SWAT team approach described above, a few collectors use this approach for new center
management. Some companies look at the center managers as a talent pool that can be
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moved across the country as new locations are opened. This is a typical path for
employees to be promoted from Assistant Center Manager to Center Manager.

Ramp up to capacity
Once a center is opened for operations it takes on average 32 months to ramp up to full
capacity with a range of 18 to 42 months with most falling between 28 and 40 months. At
the 12-month market after opening, a typical center is not yet at 50% of its eventual
capacity. This is up from an average of 30 months in 2019. The main factors that determine
this timeline, include:

Competitive Landscape

If there are one or more centers in the area, it is clear that there is a donor population
who have awareness of plasma donation. Historically, this hurdle of not having to educate
the market about plasma donation/collection used to speed the ramp up times for
centers. Today, given the increased competition in most markets with donors switching
between locations, it can take longer for current donors to make their way around to the
new location. Given this fact, ramp up times for new centers have been longer than they
were over the last few years. It remains to be seen if this is due to lasting COVID19
distortions or if this a change in donor behavior. In any competitive location, there will be
an existing donor population that will already be living closer to the new center than the
competitor in the area and location is a key determinant of which center a donor will go
to. Still, there is a law of diminishing returns with competition. If there are too many
centers in an area, then the donor population is fully tapped out, and it will be difficult to
get donors in the door of a new center at the same incentive level. Thus, higher incentives
will be needed to attract donors from the competitive center to the new one, raising
collection costs.

A location where there is no competitive plasma center, with the right demographic and
population metrics, may be attractive as well since the average donor incentive can be
lower than in more competitive locations. Given the focus on cost efficiency, this is the
goal for most collectors in 2023. This is why a number of smaller new centers are being
developed in areas without any competition. However, this situation has a few downsides.
First, these centers will have to spend much more on marketing to educate the locals
about the benefits of plasma donation and raise awareness. Second, since there has never
been a plasma center in a particular area, it is not clear that the demographics and other

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metrics of the surrounding area will support a center. The population may not favorably
consider donating plasma for various reasons. This makes opening up a new center in
virgin territory a higher risk proposition when compared with locating in an area that has
already had someone else’s investment validate a location thesis, albeit at generally a
higher cost per liter for the latter.

In the current environment, given the strong recovery in collection volumes, coupled with
collectors’ margin compression and resultant focus on cost efficiency, it would appear
preferable to open a new center in a new area without existing competition, or in areas
with less competition with a smaller population, versus a more densely populated area
with many centers competing for the same donors. Building in a new area allows collectors
to pay lower donor incentives and keep their cost per liter lower. Even if only a smaller
center can be supported, it is likely better than having a larger location in a competitive
area with 20% higher cost per liter. This is a distinct shift from two years ago when the
focus was getting as much volume as possible even if that meant having a higher cost per
liter, due to the overall shortfall of plasma at that time. Given the forecast needs for plasma
volume, it is likely that both strategies will need to be employed some of the time to
satisfy demand for plasma derived therapies. This will mean smaller centers in all locations,
and that most centers will become competitive centers at some point as collectors seek
volume and the national network continues to grow.

Schedule

The opening hours of a new center will impact its collection volume. It is possible that a
center may want to limit its hours at the very beginning so that staff can get more
experience and gradually get used to increased volume and donor flow. From a regulatory
perspective, a collector may not want to ramp up collections too quickly as there may a
higher number of SOP deviations which may be caught by a regulatory auditor.

Each collector has their own philosophy on how new centers should be opened up to their
eventual six or seven day per week, 12-14 hours per day schedule. Some companies start
right away with a seven day per week schedule, which is the costliest method given higher
staff overhead with a low resultant production volume. That said, this is typically the
fastest way to ramp up collections and build inventory. In a competitive or potentially
competitive environment, this is very beneficial as it positions the center aggressively in
the market. Even in an uncompetitive market, this approach has the benefit of creating a

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high volume and inventory of plasma that can be fractionated as soon as all regulatory
approvals are received by the new center.

In a faster ramp-up scenario, the collector will also be amortizing the fixed/overhead costs
(rent, utilities, etc.) over a higher volume than if there was a more limited schedule. The
disadvantages of this approach are the staff will be “thrown into the deep end” and have
to handle a higher volume of donations at a time when it does not have a great deal of
operational experience, unless it is run by an experienced “SWAT” team of veterans at
first. Furthermore, this approach requires a higher level of capital investment. The collector
will have to invest more in building the plasma inventory collected. This inventory cannot
be sold or fractionated until all regulatory approvals are obtained, which may take a year.
Beyond the additional capital requirement for a higher volume, it is possible that
regulatory approval will not be obtained or it will take longer, leading to higher costs.

In this scenario, plasma is also subjected to some risk factors. For example, if there is a
storm that cuts the power in a center that is awaiting approval, a large volume of plasma
stored in the freezer is at risk of spoiling if it goes outside of the acceptable temperature
range for a significant period of time. Nonetheless, most fractionators and collectors are
well capitalized and have ways to mitigate these risks and opt to ramp up as fast as
possible to get the most volume as soon as they can.

Other collectors will start new centers methodically, opening up only 4 or 5 days per week,
8 hours per day and then scaling up hours and staff as volume increases. The benefit of
this approach is to allow the staff to slowly gain experience as volume increases. It also
improves the donor experience because better trained, more experienced staff will
ultimately be on site when the volume starts to pick up. The slow ramp up method is also
the least capital-intensive approach to ramping up a plasma center, because there is less
plasma stored while the center has the regulatory approval to fractionate or sell it. From
a capital efficiency perspective, the plasma collected will have a higher cost per liter since
the fixed and overhead costs of the center will be amortized over a smaller volume of
plasma produced. Another disadvantage of this approach is that it will take longer to ramp
up production in the center to its eventual maximum capacity, thus pushing out the time
when a fractionator will have access to the full volume of plasma coming from that center.

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Construction Costs
The construction cost of a plasma center largely depends on geography as is the case
with most real estate development. Building a center in California will require a different
budget when compared to the same footprint in lower-priced real estate locations such
as West Virginia or Florida. Still, no matter where you are in the country, the cost to build
has gone up significantly since before the pandemic. Overall, for a typical 10,000 square
foot center, the construction cost averages $2 million to $2.8 million. This is up from a
general range of $1.3 million to $1.8 million in 2019. These numbers include furniture,
fixtures, and equipment (FF&E) as detailed below. Supply chain issues along with increases
in overall material and labor costs are the main reasons for this significant increase.

A smaller sized center does not necessarily mean there will be a proportional drop in
buildout cost. For example, if a collector plans to build a 7,000 square foot center, the cost
will be about $1.5M, which is more than the cost per square foot of a larger center.
Regardless of the donor floor size or the number of screening booths, high fixed capital
costs and FF&E are required and cannot always be proportionally adjusted. For this
reason, large centers are generally preferable if the space is available and if the
competition in an area was limited. Recently, given the increase in donor incentives in
competitive markets, the higher per square foot construction costs are generally offset by
the decrease in donor incentives for centers located away from competition.

Funding of the construction varies significantly, including how much a landlord may put
into tenant improvement (TI) and amortize that into a lease. For the larger collectors, it is
more important that they have flexibility in lease terms, so they have the option of getting
out of a lease after a few years if the center is not successful or to extend the lease if the
center is extremely successful.

Furniture, Fixtures, and Equipment (FF&E)

Typically, 25% of the total construction cost goes into the purchase and installation of
FF&E that are required to operate a plasma collection center. In particular, the freezer,
laboratory equipment, and medical equipment make up much of these costs along with
optional pieces of equipment that only some plasma centers opt to purchase (backup
generator, etc.). Notably, this does not include the cost of the plasmapheresis collection
device.

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Freezers
The freezer is arguably one the most important pieces of equipment, besides the
collection devices in the center. According to FDA regulations, plasma must be placed
into a freezer “immediately after filling...and shall be stored at a temperature not warmer
than minus 20 degrees centigrade”. Every company defines “immediately” differently in
their SOPs though many mandate that the product be placed in the freezer within 30
minutes. Freezers are also usually kept at a colder temperature than –20C; generally
between minus 20 and minus 30 degrees Celsius. If the plasma temperature is not
maintained, it may have to be discarded or sold for diagnostic usage-at a low price and
probably at a loss for the company.

Freezers for plasma centers come in many different formats and have a significant amount
of variability. The cost of a plasma center freezer solution can vary from $350,000 to
$475,000. This is up dramatically from a range of $150,000 to $350,000 in 2019. As
mentioned, supply chain issues coupled with a limited number of manufacturers who
produce the products have been a huge impediment and driven up the price. Installation
and the freezer parts have been in short supply over the last couple of years. Of late, the
supply chain challenges have eased and there are signs that freezer prices will increase at
a lower rate going forward, or even decrease if there is a strong market pullback in
demand.

Beyond the companies selling the freezers, the price is based on design attributes that
are specific to each use case such as the number of compressors, the size of the freezer
(dictated by the size of the center), and whether the cost includes the installation of the
freezer and controller by the manufacturer. Some freezer manufacturers will only install
their own systems and fly in a team to do the installation, while others will ship it and
allow another HVAC vendor to install it.

The other point to consider when thinking about a freezer and choosing a vendor is how
to validate it. Prior to becoming operational a freezer must be validated to show that it
can get the desired plasma temperature (at least -20 degrees Celsius) within the required
timeframe. It can take up to six weeks to validate a new freezer depending on the
availability of the vendor. Validation must occur before any freezer can be used to store
source plasma units. The companies that handle this validation task (Quantus, NWR) are
not always the same as the freezer manufacturers and installers. The validation certifies
how long it takes for product to get down to an acceptable temperature and
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demonstrates how the timeframe is affected by the content of the freezer, and the
temperature it is set to.

Other Equipment
Other equipment required in a plasma center includes the donor beds, label printers,
equipment for the donor screening booths (Welch Allyn device, scale, thermometer),
health history questionnaire kiosks (usually computer tablets) as well as other computer
equipment throughout the center to support the automated collection process. In the lab,
a hemostat and a heat sealer are required along with computers and items needed for
inventory control and management. All of this must be put in place before the center can
open. While all of these pieces of equipment are needed from day one it is not necessary
that all the machines needed for a center to operate at full capacity be installed on
opening day. As the volume grows, a proportional amount of equipment must be added.
For example, if a center is looking to bring online two more bays of collection beds and
devices because capacity has been reached on the beds that are currently there, the
collector will need to request the additional machines from their collection device vendor,
and purchase additional beds from their vendor to make those bays operational.

Supplies
Medical supplies such as needles, gauze, etc. are a small part of the equipment cost but
are critical for the center to be able to operate. It seems obvious that if there are not
enough needles, a center will need to close, but such disruptions happen more often than
one would admit. This situation often occurred in 2020 when the coronavirus pandemic
wreaked havoc on supply chains across the globe. PPE items such as gloves and sanitizing
cleaner/wipes were virtually impossible to get or their price had quadrupled, raising
plasma collection costs. This acute shortage underlined the importance of the supplies
and the need to properly plan for procuring such supplies in advance.

Besides the many vendors supplying medical supplies to health care facilities (Medline,
McKesson), Hemasource is a company that specializes in supplying the specific goods
needed by the plasma industry and can provide all equipment necessary for a collection
center. As operational complexity has grown with production volumes, supplies have
become a critical component of the process. It was clear that technological solutions were
necessary to help the operators tackle this issue. To that end, Hemasource developed a
software inventory ordering and management system called MRP. This system tracked
usage of supplies and helped to speed and automate aspects of the ordering process. It
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did a great job of limiting ordering errors and helping to ensure that a center never ran
out of supplies – without which the center couldn’t operate.

Hemasource recently has updated the MRP with a system called the Automated Collector
Experience (ACE). ACE is a system with flexible, modern architecture that can support a
variety of additional feature sets that are being planned. It also has an intuitive, updated
user interface/user experience (UI/UX). The scale of large plasma centers operations,
results in a high volume of supplies each day. Keeping everything running smoothly is
mission critical. ACE was designed to solve this problem while limiting the time necessary
to manage everything. It easily puts inventory in front of center management and
suggests orders that can be submitted with the click of a button. It also provides the ability
to track consumption of different supplies across a center and even per employee,
increasing efficiency and reducing waste. ACE ties directly into collectors' Blood
Establishment Computer System (BECS) – the software used to automate the collection
process, which is discussed in detail in chapter 9.

AOSS Medical Supply is another medical supplies and logistics company that has focused
on targeting plasma collectors as a core customer base. They have been increasing their
customer base and market share over the last few years. More recently, AOSS has
developed software offerings to help their customers and have further software
developments planned. Finally, given the company’s recent growth, it has opened a
second warehouse facility in Texas in addition to its existing warehouse in a different
geographic area. This will allow AOSS to go after additional business opportunities in the
plasma industry.

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5. Regulatory Environment

The plasma industry is highly regulated to ensure both donor and product safety. Plasma
centers are inspected by the U.S. FDA, by state regulatory agencies, and by election, the
PPTA – Source staff if a center wishes to earn the “International Quality Plasma Program”
(IQPP) certification. Some centers are also inspected by the health authorities of foreign
countries that import U.S. plasma, in particular the European Union, Australia, Austria,
Germany, and the United Kingdom, though this report will not cover these regulatory
bodies. This section provides background and information on regulatory regimes and
discuss key metrics such as approval times.

An Introduction to Standard Operating Procedures (SOPs)

The Standard Operating Procedures (SOPs) of a collector are the company’s main
intellectual property. While they are not the government licenses that allow centers to
operate, SOP’s and each center’s ability to follow them to the letter is what forms the basis
for the FDA’s decision to approve a center and grant a license. The FDA must first approve
the SOP then will audit each center to ensure that they are operating by these SOPs.

SOPs are guides that describe in great detail everything that occurs in a center. From the
staff training to the screening of a donor, every step is written out and expressly described.
It is the handbook that governs all activities in the center. While most SOPs are similar
given the level of detail of the federal regulations, they are all unique to the company that
wrote them and are proprietary and highly valuable. Most collectors consider them as
trade secrets of their organizations and control how they are reproduced and who has
access to each section. To obtain a license for acquiring a SOP from a currently approved
company costs between $1 million and $2 million just to get a copy that can then be used
to obtain FDA approval for using it under a different corporate name. This price has gone
up with increased interest in entering the plasma collection space over the past few years.
The FDA will look favorably to the fact that the SOP’s submitted for approval have already
been scrutinized by them and this usually will speed approval. This high price shows how
valuable and important SOPs are for any collection organization.

In the past decade, three new companies have developed new SOPs without purchasing
one from existing companies. They did it based on federal regulations and extensive
knowledge of the industry. Developing new SOP’s adds two or more years to the overall
process of getting regulatory approval and thus the time before plasma can be sold to a
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fractionator. Consequently, it is much faster and less risky to license SOPs from a current
plasma company and adapt them to the specific needs of a new operator.

Federal Regulations
The FDA is the key regulator of plasma collection centers. It confers the approvals and
licenses necessary for a center to produce source plasma and ensure donor and plasma
safety. The first approval granted by the FDA to a collection company is its Standard
Operating Procedures (SOP’s). SOP’s dictate all activities that a center or center staff
undertake and covers all operations from staff training to plasma shipments, and quality
protocols. Since there have been very few companies who have entered the space given
the high barriers to entry there is no set timeframe for SOP’s approval. There is a
significant back and forth between the company and the FDA. There have been new SOP’s
approvals that have taken 18 months and others that have taken five years. If an SOP
submitted for approval is currently in use at a licensed plasma center the approval time
can be as fast as 12 months, but it depends largely on the experience of the new collector.
If the collector does not have a great deal of experience, licensing an already approved
SOP can save up to four years, but more typically 2-3 years. Hence licensing an existing
SOP is typically easier than developing one from scratch.

Plasma centers are subjected two types of inspections in the United States. The first one
is the pre-license (or pre-approval) inspection conducted by the Office of Blood Research
and Review (OBRR). These inspections make sure that the center is operating by approved
SOPs and the broader FDA regulations. Collectors have found that it takes 8 months on
average to get a center approved, with a range of 7 to 12 months. This is a significant
improvement from two years ago during the COVID-19 pandemic when the average was
11 months with a range of 9 to 14 months.

The primary driver of this improvement is the implementation of the desk audit replacing
in-person audits in the wake of the COVID-19 pandemic. PPTA and member companies
have been working with OBBR to attempt to make desk audits a permanent approach for
pre-approval inspections, as they facilitate faster decisions. In person audits were
restarted in 2023 while desk audits are still occurring. It is possible that a hybrid model
could be implemented with both types of audits occurring. In general, timeframes for
approval are tied to how experienced a collector is. The more experience a company has,
the faster the typical approval timeline. This is due to the FDA’s risk adjusted approach
and it is possible that this will be integrated a hybrid desk/in-person audit regime going
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forward. It is important to note in any case that the FDA has been slow to train additional
auditors (CSO’s -Consumer Safety Officers), so if desk audits are limited or eliminated,
approval timelines could go up going forward. Most collectors assume that FDA approval
will be obtained 10-12 months after opening a center.

The second type of inspections are the routine GMP inspections that occur after a center
has been approved. They are conducted by FDA’s Office of Regulatory Affairs (ORA). These
inspections normally take place every 2-3 years after initial licensure. These audits are
unannounced, the FDA inspectors showing up at a center and conducting the audit over
the course of several days.

Industry Certifications (PPTA)

In 1991, the Plasma Protein Therapeutics Association (PPTA) established the International
Quality Plasma Program (initially ”QPP”, then IQPP for International) This move was in
reaction to the shifting public and regulatory environment of the 1980s and the HIV crisis.
Since that time, these measures have been routinely expanded to enhance the safety of
source plasma. The IQPP is a voluntary standard that most collectors in the United States
abided by as most fractionators (and all the large companies) required this certification
for all the plasma they fractionate.

The IQPP Certification Program’s purpose is to provide independent, third-party

evaluation and recognition of a collector’s adherence to PPTA Source’s global IQPP
Standards – a more stringent level of compliance than what is required by the FDA.
According to the PPTA, IQPP Standards are designed to promote product safety, donor
health, and center quality. Industry experts were consulted through a consensus process
to set these standards. The PPTA IQPP certification takes only on average 1-2 months to
obtain though it depends on the timing of the PPTA audit. Plasma centers must have FDA
approval before IQPP certification is granted by PPTA. If a center gives the PPTA sufficient
lead time to schedule the IQPP audit and no observations are received as a result of this
audit, the center can receive its IQPP certification as early as the next day after the audit.

Eligibility
Plasma collectors in the United States are eligible for IQPP certification if they have been
licensed by the FDA.

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General Rules: The following rules apply to the IQPP certification process:
- IQPP certifications are given for a one to three-year period, the timeframe being
based upon the outcome of the initial audit (the time between required audits is
longer if few findings are recorded as a result of the audits).
- IQPP confers corporate certifications which are issued for a six-month to two-year
approval period, also based upon the outcome of the audit.
- For any new standards developed, all previously licensed IQPP centers must adhere
to them, which will be confirmed at the next audit following the implementation of
the new standard.
- The PPTA must receive applications and fees before any audits are scheduled.
- Note: Any changes to the IQPP certification process, the IQPP Standards or the
auditor qualifications are made under the procedures for change control, which
require PPTA Board, IQPP Standards Committee and/or PPTA management
approval.

CSL Leaves PPTA’s IQPP in 2022

This industry standard was upended in April 2022 when CSL decided that it would no
longer be a member organization of the PPTA effective at the end of 2022 leaving both
PPTA Source (plasma collections) and PPTA Global (industry advocacy). For many years,
virtually all collection centers in the United States were IQPP certified. With CSL’s move to
abandon the PPTA and leave PPTA Source, and its IQPP certification program, all of CSL
Plasma’s centers will lose their IQPP status when they individually expire over the next 3
years. Overall, a total of around 315 collection centers that were IQPP certified will
gradually lose this distinction. This drops the percentage of US collection centers who
have IQPP certification from over 95% in early 2022 down to about 72%. The full impact
of CSL leaving the PPTA is not yet clear, however some effects are already apparent.

First, it certainly weakens the financial position of the PPTA and more importantly, lowers
the relevance and importance of the organization. CSL has always been a good operator
as is clear by their collection and market share numbers. Outside of the PPTA, CSL will
now lack access to the regulatory authorities as they will no longer be able to have private
industry meetings with the FDA through the PPTA.

There is some speculation CSL’s decision to leave the PPTA was impacted by the PPTA’s
lack of ability to help and stave off the regulatory decision that occurred along the border
between Mexico and the United States as was outlined earlier in this report. After the
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many millions spent by CSL to the PPTA, there likely was an expectation that there would
be additional cover and effectiveness when the largest regulatory issue in decades to face
the plasma collection industry came up. What the broader plasma community must keep
in mind is that this issue with U.S. Customs and Border Protection was not an issue that
the PPTA or even the plasma collectors were used to dealing with. There were no
relationships between CBP and the PPTA prior to this abrupt issue. The COVID-19
pandemic was an unprecedented situation that caused disruptions that no one had
anticipated.

There are also several practical plasma collection impacts from this decision to walk away
from the industry body. First, none of CSL's centers will pursue IQPP certification, meaning
they will not have to abide by more strict donation quality standards than those set by
federal regulations. While CSL may choose to follow some of the IQPP additional
regulations, it will not be required to follow them and so there are no assurances it will.
In addition, CSL will now need to pay non-member rates for the National Donor Deferral
Registry (NDDR). More importantly, the PPTA will no longer publish its industry
benchmark plasma collections information to the public going forward. This was data
which was collected through the IQPP program. The reason is the PPTA will not publish
data on the industry unless it represents essentially the entire market for collections, and
without CSL Plasma’s centers, which is 28% of the United States total centers, the PPTA
IQPP data collection program is too incomplete to represent the entire market. This is a
big loss for the entire plasma industry but will make proprietary estimates such as those
produced by the Marketing Research Bureau in this report more valuable.

Going forward it remains to be seen if CSL will remain completely outside of the PPTA. It
is possible that in time, the company will rejoin the PPTA or decide to abide by the IQPP
certification, allowing the PPTA to again publish industry-wide collections numbers. At
this point however, given the decoupling that has occurred, it does not seem likely in the
intermediate term. It is important to remember that CSL leaving the PPTA will have specific
impacts.

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Certification Process Overview:
The chart below describes the plasma center IQPP certification process:

Source: PPTA

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IQPP Standards
To obtain IQPP certification from the PPTA, collectors must strictly adhere to PPTA’s IQPP
Standards which are taken from the PPTA website and outlined below:
https://www.pptaglobal.org/images/IQPP_ProgramDescription_v2_1.pdf:

Qualified Donors: IQPP – Requires that certified centers collect plasma only from Qualified
Donors, a concept which is defined by the IQPP. A Qualified Donor is someone who has
successfully passed two donor medical history screenings and two required viral testing
and no more than six months has lapsed since their last donation. This standard stipulates
that if a second negative test result is not obtained, then the plasma created cannot be
fractionated and used for producing plasma therapies. These one-off donations are
considered “orphan” units and can only be sold for diagnostic products or to companies
not bound by IQPP or FDA regulations. The requirement for two negative test results was
originally a PPTA QSEAL requirement but then recently was added to the FDA
requirements.

The donor of an “orphan” unit has not returned to the plasma center within six months
after his/her first donation. An “orphan” unit cannot be fractionated because it has been
tested only once. If found seropositive, it is destroyed. If it is negative, it may be sold but
not for therapeutic use in humans. An “Applicant” donor is one that has been tested twice.
If either one or both are seropositive, they are destroyed, and the donor cannot return to
give plasma. If they are negative, the donor may return for other donations, but until then,
the units are called “Applicant” units, and available for fractionation in the US (or
elsewhere).

Community-based Donors: IQPP-certified plasma centers can only accept donors who live
within the community where the plasma center is located. This was defined as being within
a 50-mile radius of the center excluding students at local colleges/universities, locally
stationed members of the military, or donors intentionally transported for the collection
of source material for non-coagulation concentrate products for hyperimmune products
(excluding tetanus) under a government-approved program for the collection of such
donors. This was recently changed from a specific radius around a center to be redefined
as the “donor marketing area” that a center may pull from. The donor marketing area is
now established by each center individually. This was an important change as depending
on where a center was located, it could be unnecessarily restrictive. For example, if it is in
a rural area, there might not be enough of a donor pool within a 50 miles radius.
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Donors must provide proof of local residency at the time of donation and a donor's
address must be cross refenced with all addresses in the area known to be homeless
shelters, hotels, motels or missions. Those who present addresses that match those on
the list of unacceptable addresses will not be permitted to donate. Keeping track of the
unacceptable addresses list was one of the reasons some centers prefer marketing to a
smaller donor population within a limited/smaller geographic area. In a dense urban area,
it is difficult to keep track of all the unacceptable addresses, whereas in a rural area, fewer
addresses need to be tracked.

PPTA Source’s National Donor Deferral Registry (NDDR): The FDA regulations require that
every unit of plasma be tested for Hepatitis C (HCV), Hepatitis B (HBV) and Human
Immunodeficiency (HIV). Any unit with a positive test result must be destroyed or diverted
for non-IQPP Certification hyperimmune product. The donor that presented with a
positive viral result will be entered into the National Donor Deferral Registry (NDDR)
database and will be permanently deferred by all collectors in the future. Before a
donation by an applicant donor, all IQPP centers must check to see if a donor is on the
list to confirm eligibility to donate. If the donor is on the list, they are not allowed to
donate which ensures that their positive unit does not enter the source plasma pools used
for fractionation. In 2020, the NDDR was moved off the servers of Haemonetics and is
now managed by the PPTA with another vendor, Headspring- a Texas based technology
company. The new group combined the NDDR with the Cross Donation Check System
(CDCS) to improve center productivity and was launched in January 2021. In 2022,
Headspring was sold to CieloWorks, who now run both systems. The NDDR charges a fee
to plasma centers for each query with two different prices for PPTA Members and Non-
PPTA Members. The NDDR rate for PPTA Members is $1.25 per query and $2.10 per query
for Non-PPTA Members. A query is needed every time a donor needs to be qualified; the
first time that they donate or if there is a lag of more than 4 months in their donations.
This adds to the overall cost of collection.

Donor Education: Centers with IQPP certification must educate donors about high-risk
behaviors that could lead to infections. In the donation process, donors are quizzed to
ensure their comprehension of the educational materials.

Personnel Education and Training: Centers with IQPP certification must employ staff that
meet PPTA’s educational standard and are fully trained to perform their duties. Minimum
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education standards were established for all plasma center functions. Additionally, initial
and recurrent training were updated in 2004 to make improvements in plasma center
operations. Plasma center employees must meet basic education and training
requirements as well as participate in routine training to maintain the most current and
up-to-date knowledge of their jobs.

Professional Plasma Collection Facility: Each IQPP –certified center is audited for interior
and exterior appearance, maintenance and donor and staff safety and security. Repeat
donors will feel comfortable as they approach from the outside and as they wait inside.
This standard also helps increase acceptance of the center by the surrounding community.

Quality Assurance: IQPP–certified centers must comply with current Good Manufacturing
Practices (cGMP). Each center must have a staff member who is responsible for processing
and investigating customer and/or donor complaints promptly. In addition, Lot Release
procedures must also adhere to GMP rules and centers must have a system in place to
both release shipments of plasma and stop them if necessary.

Viral Marker: IQPP-certified plasma centers must meet a specific viral marker standard
based upon data submitted to the PPTA on a monthly basis. When the IQPP started in
1991, PPTA Source began to monitor the rates of detection of HCV, HBV, and HIV in
plasma donors. Centers must remain below certain thresholds of positive test results.
These thresholds change based on the Qualified Donor Reference Rate. The reference rate
is based on the overall industry average viral marker rates and serves as the basis for
establishing the probability tables and acceptable viral numbers that all IQPP centers must
adhere to. The basis for the standard around HCV, HIV and the composite is based on
viral marker prevalence for qualified donors measured during the data collection year of
January through December 2000. The basis for the standard for HBV is based on viral
marker prevalence for qualified donors measured during the data collection year of
January through December 2001. IQPP-certified plasma centers submit their data on a
monthly schedule, and it is compiled and analyzed every six months for adherence to the
Standard by the PPTA. Centers exceeding the Alert Limit must submit a corrective and
preventive action plan (CAPA) to bring them into compliance with the Standard. If the
plasma center is unable to comply, it may lose its IQPP certification.

Cross Donation Management (CDCS): Plasma donors are only allowed to donate twice in
a seven-day period. At times, donors may misunderstand the reasons for limiting the
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number of times that they can donate per week (for their safety/health) and may attempt
to donate more often than is allowed. To protect against this possibility, the Cross
Donation Check System (CDCS) was created in 2015. Prior to each donation, a donor is
checked in the CDCS to make sure this is not happening. A donor who is found to be
cross donating will be permanently deferred. At the beginning of 2021, the PPTA merged
the CDCS and NDDR into one system using a Texas-based IT company, Headspring as the
vendor. In 2022 this was sold to CieloWorks who now administers the system.

State Regulations
Most State restrictions are less restrictive than the FDA and IQPP requirements, meaning
that just satisfying the federal regulations is sufficient to operate in these states. However,
a significant amount of variability exists whereby some States have additional
requirements that go beyond those of any of the other regulatory authorities, including
the FDA. These more restrictive states requirements are being challenged by PPTA in order
to amend their regulations as most of these rules originated at a time when plasma
donation was not as highly regulated and donating was much less safe. If PPTA is
successful, as it was most recently in New York, this will open up additional donor
populations to plasma donation, thus helping to solve the supply and demand challenges
that are discussed in this report.

The major problems are not necessarily with the State regulatory approval, but the
onerous requirements that deter operating centers into particular States. This is especially
a problem regarding center personnel requirements; some states have onerous personnel
hierarchy requirements, adding significant management costs to a center, along with
prohibitively strict professional standards. Together, these limit the ability of a plasma
center to operate in the state on a cost efficient basis compared with states which don’t
have these extra regulations.

Most regulators at the international counterparts and within the industry agree the FDA
has a robust and credible licensing and oversight program for plasma collection facilities.
It is the goal of the industry, through PPTA’s efforts, to harmonize federal and state
requirements by removing state requirements that go beyond the federal requirements
and do not add value either to product safety or donor health, thereby unduly restricting
plasma donation. PPTA has had previous success in these efforts in states such as New
York, Alabama and Nebraska. Some states are still very restrictive, particularly California,
although the PPTA was able to get changes made there around donor suitability on
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testing and protein levels which was beneficial to allowing additional donor populations
and to harmonize the requirements with FDA requirements. In particular, the PPTA was
able to eliminate obsolete requirements that did not reflect the current progress of the
plasma industry in certain states. For example, in New York, a syphilis test was required
within 24 hours of the donation, and a collection center had to have an agreement with
an accredited hospital in the vicinity for handling donor adverse events. Furthermore, the
availability of a physician within fifteen minutes of the donation center was required, as
well as the presence of a registered nurse or physician as the donation floor supervisor.
The center was also required to have a health care license or six months whole blood or
transfusion experience in order to perform automated plasmapheresis. As was previously
covered in this report, these requirements were eliminated through successful lobbying
by PPTA and companies. Another example is individual state expansions of the already
burdensome CLIA personnel requirements.

All of these additional requirements added significant cost to any center that wanted to
operate in these states, such as New York. As a result, relatively few companies were
willing to open centers in the state and thus so only 12 centers were located in New York
at the end of 2020, (none of them in New York city) or 1.3% of the total center count at
the time, despite New York having 6.1% of the country’s population. Now there are 13
centers in New York, with more anticipated in the near future. This shows the direct impact
of PPTA’s regulatory efforts. Similarly, the burden and high cost of regulations in
California, is the main reason that a state with 11.7% of the U.S. population (Estimated as
of July 2022) has just 46 FDA licensed centers, or 4.1% of the total as per the end of 2022.
The states of Connecticut, Massachusetts and New Hampshire also oppose legal barriers
to commercial plasma donation, some of which prohibit donor compensation. Making
these regulations less restrictive in these States would go a long way towards supporting
additional centers in the country, which will be needed in the future. The PPTA is actively
working to change regulatory requirements in a number of these States.

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6. Purchase Price of Source Plasma and Plasma Collection Assets

As has been previously outlined in the historical overview of the plasma collection
industry, prior to the industry’s vertical integration, the price of plasma fluctuated
according to the supply and demand of source plasma and plasma derived products.
Since there are fewer independent collectors now than 20 years ago, and most
fractionators are also collectors, the volume of plasma sold or purchased is less than <5%
of the total, as most is used internally. Consequently, the price for source plasma has
become both more difficult to accurately measure but also less relevant to the industry.
Nonetheless, the price per liter of plasma is still an important and necessary data point
for the exchange of plasma between companies, between affiliated parties, and especially
for the independent collectors in the industry. The same holds true for the cost of buying
collection assets.

Given the short supply of plasma over the last two years and at times, the uneven level of
impact by the COVID-19 pandemic on different collectors, the price of plasma has become
a more important metric given companies have had to shift around product to one
another. It is likely that the industry will go back to its long-term trend of each company
utilizing virtually only its own collected product, but it may take some time for that to
settle as supply improves as the effects of the pandemic recede.

Current and Historical Price of Source Plasma

The reported price of a liter of fully tested source plasma to be used for fractionation for
new and recent contracts averaged $219 in early 2023. This represents a 3.9% decrease
from a price of $228 in early 2022, but it is a 10.6% gain from two years earlier. This reflects
the general trend of increasing cost to collect plasma though not quite at the price during
the depths of the pandemic (see Chapter 3 for more details). The range for fully tested
source plasma was from $200 to $242 per liter. The low end of that range is due to the
price for newly established collectors who don’t have a long-term reputation yet and are
trying to get their first contracts. To that end, most independent collectors today are not
willing to sign any supply contracts and are only willing to do “spot” or quarterly deals.
This is the result of previously having found themselves burned by skyrocketing costs with
no mechanism to increase the price they were charging customers in longer term
contracts. This led to the erosion of margins to the point where some were losing money
on each liter collected. More on these dynamics will be covered below. They now avoid
this by having very short-term contracts, though if there is an oversupply of product in
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the future this will not work in the collectors favor as prices are currently falling on new
contracts vs 1 year ago.

Historical prices of fully tested US source plasma are shown in the table below. The prices
for source plasma have been rising for over 10 years in general, but the annual growth
has been variable, with two years showing 10% rises. Most recently, prices have fallen in
line with lower donor fees as discussed in chapter 7 below. Part of the annual variation is
due to the fact that most source plasma is not sold but used internally, so the prices below
represent the market margins because they are based on a small number of contracts
written each year. Overall, the growth over the past 10 years has been an annual increase
of 3.9% per year. When looking at the past five years, the growth has been higher, at 5.8%
per year on average, due to the recent spike in prices due to the COVID-19 pandemic,
which has only slightly abated in the first months of 2023.

Historical Price of US Source Plasma from 2011 to 2023

Year Month US Source Source CAGR US Source Range
2011 March $127 1.6% $110-149
2012 February $136 7.1% $125-145
2012 December $138 $130-145
2013 April $150 10.3% $135-165
2014 March $152 1.3% $145-170
2015 March $155 2.0% $140-165
2016 March $156 0.6% $147-165
2016 November NA NA
2017 March $162 3.8% $153-165
2018 April $165 1.9% $155-175
2019 April $173 4.8% $169-180
2020 March $179 3.5% $170-185
2020 August $194 $180-200
2021 March $198 10.6% $180-218
2022 February $228 15.2% $210-250
2023 March $219 -3.9% $200-240
2013-2023 CAGR 3.9%
2018-2023 CAGR 5.8%

Future Expectations of Source Plasma Pricing

The expectations for the future regarding the price of fully tested source plasma from the
United States is the assumption that it will approximately mirror the growth (or decline)
in the cost to collect a liter of plasma. Due to the dynamics and power structure of the
buyers and sellers of plasma as described below, the price of plasma is not expected to
rise significantly above the increased cost over the next five years. Thus, the price of

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plasma might be expected to rise to $205 to $245 in 2024, with an average around $222.
In 2025, the price would be in the range of $208 to $248 per liter with an average of $225
if our forecasts for costs to collect are correct as detailed in Chapter 7. By 2032, the price
of source plasma would be $245 to $285 per liter following the forecast for collection cost
increases. Overall, prices would rise 3% per year from 2023 to 2032, which is measurably
below the rate of growth over the past 5 years (2018-2023), but in line with the growth
from 2014 to 2019, as the pandemic created a step up in pricing for a few years but the
rate could return to the normal growth rate.

Details Affecting Source Plasma Pricing:

The price a liter of depends on a few variables described below:

Lack of independent plasma collectors: The scarcity of independent plasma collectors in

the US has an important impact on the price of a liter of plasma. First on the supply side,
since there are only a handful of independent collectors that do not have their own
fractionation capacity, and most integrated companies sell very little of the plasma they
collect. Thus, the plasma supply available to the market in general is very low, less than 5
percent of total collected plasma, and dropping. This means that there is a much lower
volume available on the market, reducing the sample size when comparing pricing. The
size of the independent collectors compared with the size of the buyers (the fractionators)
make it hard for the independent collectors to obtain negotiating power with the buyers.
The supply/demand imbalance that has been seen over the last five to ten years has
helped give the small collectors some leverage, but it is still an asymmetrical negotiation
between the two parties. As fractionators collection fleets recover their collection volumes
strongly coming out of the pandemic and grow into the fleet capacity that they invested
in aggressively over the last three years, the slight leverage independent collectors had
might disappear. Several new independent collectors have entered the space over the last
two years or existing independent players have scaled up. It still is unclear if these
operators will be able to effectively generate significant supply, especially in the hyper-
competitive environment that exists today. The new entrants into the market have
collection volumes which are nascent compared with even the growth in collections by
the fractionators and existing independent collectors.

Contract Length: The most important variable affecting the price is the length of the
supply contract and when the supply contract was made. The longer the supply contract,
the lower the price that a collector will usually get for a liter of plasma as it is locking in a
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long-term buyer for the product. However, as has been the trend for a few years, longer
contracts are becoming less common in the industry. Since costs of collecting (see chapter
7) have been going up at a faster rate than the price of plasma for the last five years, it is
important that collectors ensure they don’t commit themselves to a contract that, by the
outer years, squeezes or eliminates their profit margin. This has caused much of the
contracted volume to shift to the spot plasma market, which is sold immediately or over
the course of a quarter. This enables collectors to closely align the cost to collect with the
price they are getting on that product. In a world with constant supply shortages, this was
never a problem. The major risk with a shorter contract for a collector is in future years
when the contract expires, there will be no buyer for the plasma it collects, or the price
will be very unattractive in a plasma oversupply situation. This is even riskier depending
on the proportion of a collector’s output that is being sold on the spot market. If there is
pull-back in demand for this third party contracted plasma because fractionators have
enough of their own product, then independent collectors could be left with a glut of
supply and no way to monetize it. Given the continued growth in demand for plasma
derived therapies coupled with plasma supply shortages, it is not anticipated that there
will be a lack of demand for plasma broadly over the long run. That said, in the short term,
as collections come back strongly and vertically integrated collectors grow into the
capacity they have built out with new centers, there may be less demand for purchasing
plasma from independent suppliers. This scenario is exacerbated by the focus of most
fractionators on cost efficiency at the moment. If collectors focus on streamlining their
operations, the business case for going with an independent collector to supply significant
volumes of plasma is less attractive, particularly if they have enough product from their
own centers. It is expected that the market will continue to revert to the long term historic
averages but in the interim there may be disruptions for independent collectors..

Most Fractionators are collectors: As a reminder, fractionators that are buying from
independent collectors also have their own collection centers. This gives them insight into
operations and costs, so they have the operational information to pressure collectors to
take a lower price since they likely know the cost to collect a liter of plasma today. There
are also fewer possible customers for independent collectors to sell to due to the
consolidation seen in the industry. This has led to a lower percentage increase in the price
of plasma than might have been expected given the strong demand increase for plasma
over the last 10 years. Finally, since fractionators have their own fleet of collection centers
which they are rapidly expanding, a smaller percentage of the volume they fractionate
each year comes from independent collectors. This also means that since most plasma
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flows from internal business units to their fractionation entities, instead of from a third
party, fractionators naturally think in terms of the cost to collect plasma and not the cost
to buy it. They strip out the margin from the negotiation on plasma acquisition price which
in turn puts downward pressure on the price of plasma independent collectors can obtain
in the market. Finally, collectors’ concept of the cost to collect is skewed as they can obtain
better pricing for consumables and other components of collection plasma given their
negotiating power with vendors and high volume.

The end result has been that fractionation companies have strong bargaining power to
only offer plasma prices that are only a little above the cost to collect plasma at a center,
making it a low margin business for the independent collectors (5-15 margins). This effect
has been somewhat dampened over the last four years given the short supply seen in the
market, particularly with the COVID-19 pandemic and the issues surrounding the centers
on the United States/Mexico border. Fractionators have been so desperate for whatever
extra volume they can get that they are willing to pay higher prices for the small amount
of additional volume available. This pressure however has dissipated in the six months
ending Q1 2023. The price has been further buoyed by a number of smaller, second tier
fractionators that either do not have their own centers or have centers but operating them
is not their core competency. The net effect of this situation is accelerating upward pricing
pressure for a liter of plasma over the last two years. If fractionators were not also
collectors of plasma, the price would be even higher. This effect has plateaued as of the
writing of this report. The forecast for the price of plasma is discussed above.

Long Term Supply Contract Pricing (3+ years): This is the least common type of contract
because it puts considerable risk on the seller to manage future costs which may be
outside of their control. The 2022 price of a liter of plasma on the long-term contract
market is approximately $203 (fully tested). The responses to an MRB survey ranged from
$191 to $220 per liter. This is up significantly from 2020 where the average price per liter
was $185 (fully tested) with a range of $180 to $200 per liter. Given the skyrocketing cost
to collect, this is barely breaking never mind any sort of profit margin. It is also important
to note that the prices reported in this category were possibly negotiated and executed
in previous years before the increases in donor incentives and staffing could be priced in
as a result of the COVID19 pandemic. After the pandemic, the continued tightness in
plasma supply made off contract prices artificially low. Given these risks, there are fewer
and fewer long-term supply contracts, except between related parties. For new long-term
contracts, the terms include certain protections or clauses for sellers (if costs go up by x
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percent, the price per plasma will be adjusted accordingly). This has now become standard
practice in longer term contracts to have these clauses where cost increases will be passed
along to buyers of the plasma at some reduced rate (usually not 1:1). Where a contract
lies in the pricing range of $191 to $220 today is mostly a function of when that contract
was executed (more recent contracts are higher), how much supply (shortage or excess)
was available in the market at the time of execution, and how desperate (or not) were
fractionation companies for plasma at the time of contract execution. Typically, if a
contract is about to expire, it usually is at the low end of the pricing range.

Medium Term Supply Contract Pricing (1-3 years): This used to be the most common
length of plasma supply contracts according to MRB’s surveys. While there are still a
number of collectors that still structure their contracts in this way, it is either strictly at the
1-year length or if it is longer, there are mechanisms in the contracts that provide
protection should the cost to collect rise quickly. The remaining collectors have shifted
much of their production to quarterly contracts or spot sales only. Again, this is a relatively
low volume given the small number of independent collection centers operating in the
US. In 2022 The price of a liter of plasma on the medium-term contract market was
approximately $219 (fully tested). The responses to an MRB survey ranged from $210 to
$225 per liter. This is up from a price of $205 per liter (fully tested) in 2020. Just as with
the long-term supply agreements, when the contract was made is the main determinant
of where the pricing falls in the range. The big difference however is there is a much
tighter band of pricing and the highest priced contracts were made in the middle of the
last two years range; in late 2021 through the middle of 2022 when the plasma supply
crunch was the tightest.

There are also sometimes short supply situations that fractionators sometimes find
themselves in, for various reasons, which will push them to purchase at the high end of
that range though usually it is for a lower volume (<50,000 liters over the term of an
agreement). There is no typical volume for a contract of 1-3 years as it may include the
volume from multiple centers so the total contract could be hundreds of thousands of
liters per year.

Short Term/Spot Market Pricing (Delivery in 0-12 months): Previously, most independent
collectors sold their volume through supply contracts, which resulted in lower volume
being available for spot sale. Over the last two years with the increase in the cost to collect
plasma, selling via a traditional supply contract became less and less appealing. Today, a
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much higher percentage of independently collected plasma is being sold via spot sales.
Spot sales on average were $247 per liter (fully tested) in 2022 with a range of $230 to
$260 per liver. Historically order volumes for spot sales were much smaller ranging from
one thousand liters to tens of thousands of liters, with the average being under 15,000
liters. Now that more volume is moving through this process, the average volume is in the
10,000 to 20,000 liter range.

Going forward, it is anticipated that this price will come down in 2023 to $243 per liter
given the incredibly high pricing in 2022 and as the vertically integrated collectors
continue to have strong collections and grow into the significant center capacity they
have built out over the last three years.

Pricing of Applicant/Orphan Donor Plasma

Applicant (or Orphan) plasma is from applicant or orphan donors, defined as individuals
who donated only once and do not come back for a second donation within 6 months.
They didn’t return perhaps because they had a bad reaction or experience during their
first donation or realized that plasma donation is not for them. In this situation, the
collector could not obtain a second negative test result, which is required for a donor to
qualify to become a source donor for FDA or EMA purposes. Therefore, this plasma unit
cannot be used for manufacturing therapeutic drugs used in the United States or Europe.

However, this plasma can be sold on markets that do not have the two negative test result
requirements. There are two such markets. The first and most common market is to use
the plasma for diagnostic purposes. Besides the diagnostic companies, the fractionators
also need this kind of plasma for maintenance purposes and/or for calibrating and testing
new equipment such as when a new plant is under construction and they want to do
processing runs.

The ratio of applicant/orphan donor plasma units to the total number of units collected
is about 0.05%. It depends on the companies, some doing better than others. This means
about 22,500 units per year in the U.S., assuming 45 million liters collected, making it a
much smaller market than plasma for fractionation.

The price of applicant plasma was reported at $60 per liter in 2023, with a range of $60-
70 per liter. This is up from $40-45 per liter from two years ago, mirroring the rise in source
plasma prices for fractionation. Prices for this type of plasma have not risen consistently
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over the last few years, as it was $45-65/liter over ten years ago, as today there are more
applicant plasma volumes offered for sale due to the opening up of many new centers
and the expansion of the plasma industry. At the same time, the demand for such plasma
has been increasing within the diagnostic industry, leading to recently rising prices. The
market price for orphan plasma is likely to continue to be stable or increase slightly due
to rising demand for diagnostic reasons, even though the number of applicant donors is
likely to go up, increasing the supply of applicant plasma.

The second market for orphan plasma is to sell it to fractionation companies which do not
need to follow the FDA or EMA regulations for plasma for fractionation and can use fully
tested orphan plasma in their therapeutic products. This is sold for about $70-80 per liter,
or considerably more than for diagnostic use. There are only a few companies in eastern
Europe and Asia which can use this type of plasma based on the regulatory situations in
their countries, which reduces the demand for this type of plasma significantly. Thus, this
market is currently much smaller than the diagnostic market for orphan plasma. However,
there may be more of these fractionation companies in emerging countries in the future,
opening up the demand for higher volumes of orphan plasma to be sold this way,
potentially even raising the price of this type of plasma under some scenarios.

Collectors take an aggressive approach to try and convert a donor from being an orphan
donor to a qualified donor. This includes special targeted bonuses to get them in the
door, such as “Earn an extra $50 to come in an donate a second time!” It could also just
be a call to encourage a donor to come back to the center if the collector feels the new
donor bonus is motivating enough already. While this can be incredibly labor intensive,
or costly (pushing up the donor incentive), it is generally worth it as the cost to collect the
unit of orphan plasma is the same as for a source unit but sells at less than one third the
price. This makes it worthwhile to undertake these efforts. If collectors do not succeed in
getting a donor to return and donate again, they are willing to sell the unit on the
diagnostic market as they will at least get something for it instead of destroying or
throwing it away.

Price of Recovered Plasma

Recovered plasma frozen within 24 hours (as opposed to that frozen within 8 hours) and
tested for five viral markers was reported to cost about over $189 per liter in early 2023,
up from $150/liter just before the pandemic started. Plasma frozen within 72 hours was
priced at the same level because it is used primarily to manufacture polyvalent
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immunoglobulin products. Even though whole blood collections have mostly gone down
over the past few years they have recently stabilized or increased slightly. Recovered
plasma volumes do not necessarily follow an identical trend because other factors are in
play, in particular the use of fresh frozen plasma for treating patients, which may be
substituted by other drugs (plasma- derived or not). In addition, recovered plasma is sold
in smaller units (250 ml bags), and they are not designed to fit the machines used by the
fractionators to process frozen plasma samples. As a result, it is more cumbersome to
process recovered plasma than source plasma, which raises labor and other costs involved
in getting the frozen plasma out of each bag, which reduces the value of this plasma to
the fractionators. Additionally, and more importantly, each bag requires its own "Plasma-
Master File" which means four times more data than for source plasma, since the volume
is about 4 times less (250 ml for recovered vs 880-950 ml for source). This extra
administrative burden and risk the pool might need a lookback or even a recall are greater,
which again is priced into the value of recovered plasma by the fractionation companies.
The higher yield of immunoglobulins in recovered plasma does help mitigate these
drawbacks, however, but does not erase all of them in the eyes of the fractionators, so
they consequently pay less for plasma in this form than source plasma. As a result, the
price of recovered plasma has not risen at the same rate as source plasma has over the
past few years.

Price of plasma for specialty/hyperimmune products

Anti-D Plasma: For a titer of 50 mcg/ml, the price of Anti-D plasma was $700 per liter in
early 2023, up from $650 two years ago.

Anti-Tetanus Plasma: In early 2023, the price of anti-tetanus plasma was $325 per liter for
a titer of 17 international units per ml, up from $300 two years earlier. Only a few
companies produce this specialty plasma, limiting the supply, but also only a few
companies produce anti-tetanus hyperimmunes, so the number of buyers is also small.
Since Sanofi ended its production of tetanus toxoid a few years ago, donors have been
immunized by means of bivalent or trivalent vaccines (diphtheria and pertussis along with
tetanus) which are less potent than tetanus toxoid for boosting the production of
antibodies in the donor, resulting in lower tetanus antibodies titers in the donated plasma.
As many donations do not qualify for the preparation of anti-tetanus immune globulin,
the quantity of anti-tetanus plasma has not kept pace with the demand, resulting in higher
prices. Furthermore, for several plasma companies, producing anti-tetanus plasma has

113
become unattractive because it requires that many new donors be recruited because the
percentage of donors with adequate titers is low.

Anti-Hepatitis B Plasma: For a titer of 40 IUs per mL, the price of anti-hepatitis B was
reported at $425 per liter, down from $450 two years ago.

Anti-Rabies Plasma: Anti-rabies plasma (20 IUs/liter, tested) was reported to be sold for
$475 per liter, down from $525 two years earlier. Similar to anti-tetanus plasma, its
production involves repeated immunizations which are relatively costly (>$100), testing
of the antibody titer of the donated plasma, and higher donor compensation due to the
strong commitment required from the donor to go through the immunization process.
Consequently, very few companies produce this plasma.

Anti-Cytomegalovirus (CMV) and Varicella Zoster Plasma: The price per liter of anti-CMV
plasma was reported to be $258 per liter, about $30 above the price of source plasma. It
has, on average, risen with the cost of source plasma over the past five plus years.

Cost of buying production assets (Centers)

In the last two decades, the plasma industry has experienced a steady consolidation in
every region. A list of transactions is listed in chapter 1 under Vertical Integration. In
general, each of these deals have unique attributes that make it hard to strip out the cost
of just the collection assets. Previously, many people in the industry spoke about selling
collection centers and the price per center. This approach does not take the variability
between centers into account as well as their attributes such as volume and cost to collect.

Some transactions are now shifting to the metric of purchase price per liter of center
output. Based on MRB’s survey’s, the average price for a center per liter of output is $205
with a range of $187 to $300. That said, there have been far fewer transactions in the last
12 months, and the MRB believes that this lower volume of M&A transactions will
continue for the next 1 to 2 years. A center purchased at the low end of the price range
usually has a higher cost to collect and may be losing money on each liter collected. A
center purchased at the high end of the price range usually includes other assets such as
an SOP or even a fractionation plant. The variability in price is driven by: 1) the efficiency
of the particular center (its cost per liter), 2) its production volume (e.g. 20,000 or 80,000
liters per year), 3) the competition in the area (the lower the competition and the higher

114
the volume, the higher the purchase price), and finally 4) the eagerness of the buyer to
acquire the asset and more plasma.

Given that there are still very few independent collection companies or collection centers
in the market, if a fractionator wants to buy a plasma collection center in the United States,
it must be willing to pay a high enough price to purchase one of the few centers available
for sale (either independent collectors or centers not supplying a company’s own
fractionation throughput). Starting up a plasma center from scratch requires a significant
amount of capital and takes 3-4 years before a meaningful production volume is
generated, due to the regulatory approval and all the steps required to develop and ramp
up production (including all inherent risks, such as the size of the donor pool in the area
to meet volume targets) as explained in chapter 4.

One change over the last three years is that one of the main buyers of independent plasma
collectors a few years ago, Grifols, has stopped acquiring new centers and very recently
started closing centers it already owns. Given the focus on cost efficiency. Grifols has been
shutting down centers beginning in Q4 2022. They have plans to shutter 30 centers by
the end of 2023. The reason for this dramatic shift in strategy has to do with the cost of
capital and interest rates. Grifols took out a significant amount of debt and paid arguably
inflated prices when the cost of capital was low. With the recent rise in interest rates,
Grifols now has increased debt service costs along with their compression of margins
given the increased cost to collect or buy a liter of plasma. Consequently, they have had
to shift from acquisitions of centers to cutting costs, This will likely have a downward effect
on the price of a plasma collection center.

The entrance of private equity firms has created another pool of potential buyers of
plasma assets. For example, Permira purchased Kedrion and BPL in 2022. It is unclear if
Permira will make additional transactions but interest by private equity could put a lower
limit on the price of a center if sold.

Another consideration for selling plasma centers is the oversight of the FTC with anti-
competitive regulations affecting the plasma industry, given the increasing competition
between centers in the same city. With many existing centers competing with each for the
same donor pool in a city, the FTC will likely not allow a company to sell their centers to
another company that has centers in the same overlapping locations. This was an issue
with BPL when Grifols wanted to buy all their centers, and the regulations of CFIUS forced
115
divesture of half the centers. The FTC oversight could limit the potential exit targets for
independent collectors as it limits the companies they can sell to. This puts downward
pressure on the price of buying collection assets.

For many prospective market entrants to the plasma collection industry, it is still generally
preferable to pay a premium to buy existing centers where risks are likely mitigated and
a set of FDA approved SOPs or other assets are part of the deal. This shortens the process
and has inherent value versus starting from scratch.

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7. Cost to Collect a Liter of Plasma and Forecast to 2032:

Current costs to collect a liter Plasma

Plasma collectors (both independent and fractionator owned) use a number of categories
to determine the cost to collect a liter of plasma. Based on MRB’s survey, the 2022 and
2023, the average cost to collect a liter of plasma was $207.70 with a range of $171.50 to
$244.50 (see table below). This is up significantly from 2020 when the average was $161.50
with a range of $149 to $182. There is a high degree of variability across collectors, due
to:
a) level of competition between centers in a specific area,
b) negotiating power with vendors (the larger collectors are able to extract more
price concessions from vendors),
c) center location (in a dense area where real estate costs are higher than in other
demographic areas).

The collectors that are on the low-end of the range have centers that are in areas further
away from large metropolitan areas (suburban, rural, or border centers) and have scale of
over 20 collection centers with their own testing capacity. Collectors on the higher end of
the range operate in highly competitive, dense, urban markets where there is fierce
competition for employees, and relatively high real estate costs. These collectors also
outsource much of their testing and utilize the latest apheresis collection devices in order
to capture more volume in their highly trafficked centers.

Table. Cost Components to Collect a Liter of Plasma in 2022

2022 Average Range
Cost Category
Cost ($/Liter) ($/Liter)
Donor Compensation $93.0 $81 - $98
Staffing $32.5 $28 - $35
Testing $23.5 $17 - $26.5
Soft goods/Kits $18.4 $14 - $22
Medical Supplies/ $6.8 $5.5 - $9
Hazardous Waste
Software $3.5 $2 - $6.0
Center Overhead $30.0 $24 - $48
Total $207.7 $171.5 - $244.5

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Table. Comparison of Cost Components to Collect a Liter of Plasma in 2022 and 2022
2020 2022
Contribution
Cost Average Average Change Change
to Cost
Category Cost Cost (%) ($)
Increase (%)
($/Liter) ($/Liter)
Donor
$65.0 $93.0 43.1% $28.0 60.6%
Compensation
Staffing $25.0 $32.5 30.0% $7.5 16.2%
Testing $21.5 $23.5 9.3% $2.0 4.3%
Softgoods/
$16.0 $18.4 15.0% $2.4 5.2%
Kits
Medical
Supplies/
$6.0 $6.8 13.3% $0.8 1.7%
Hazardous
Waste
Software $3.0 $3.5 16.7% $0.5 1.1%
Center
$25.0 $30.0 20.0% $5.0 10.8%
Overhead
Total $161.5 $207.7 28.6% $46.2 100.0%

Overall, the cost to collect a liter of plasma rose 28.6% in two years, or 13.4% per year.
The total rise was $46.2/liter more to collect plasma in 2022 compared to just two years
earlier, a rapid and unsustainable rise. Collecting plasma was

One of the most striking changes between 2020 and 2022 is the rise in donor
compensation, growing 53% in two years. Donor compensation reached 45% of the total
cost to collect plasma in 2022, up from 40% in 2020 a large jump showing how
increasingly important donor fees are to the overall costs. Over 60% of the increasing cost
to collect a liter of plasma in the past two years was due to the rise in donor fees, while
all other costs combined contributed just 40% of the total. There are a number of reasons
for this dramatic change, as discussed below. Most other cost components were within 1
percentage point of their market share in 2022 compared to 2021, but testing went from
13% total in 2020 to just 11% in 2022. All components are discussed below in detail.

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Chart. Cost Components to Collect a Liter of Plasma in 2020 and 2022
Cost Components in $/Liter for 2020
Total cost: $161.6/liter

Center
Overhead
15%
Software
2%
Medical Supplies/ Donor
Hazardous Waste Compensation
4% 40%
Softgoods/ Kits
10%

Testing
13%
Staffing
16%

Cost Components in $/Liter for 2022

Total cost: $207.7/liter

Center
Overhead
14%
Software
2%
Medical Supplies/ Hazardous
Waste
3% Donor
Softgoods/ Kits Compensation
9% 45%

Testing
11%

Staffing
16%

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Cost Components – Definitions and Values

Donor Compensation
This is the amount paid to a donor as compensation for their time spent donating plasma,
including any bonuses they receive. This is an average including all donor incentives, not
just the compensation per-donation. In general, there are a multitude of different
incentives that come together to form this number including new donor fees, repeat
donor fees, loyalty bonuses, second in a week bonuses, 6th or 8th donation of a month
bonus, referral fees (bringing in a friend), and any other direct payments to donors. This
metric does not include advertising.

First, there are different amounts paid to donors who are new vs. returning. For example,
a collector may offer $100 dollars per donation for the first 8 donations to “new” donors
who have not donated at a particular brand of center in the last six months. Second,
collectors oftentimes incentivize donors for being more loyal throughout the month. An
example of this is an extra $50 for a donor on the sixth and eight donation in a month,
meaning they have donated the maximum of twice a week the entire month. A third type
of bonus is the second in a week bonuses. Since plasma donors can donate twice in a
seven-day period, collectors will, for example, give an additional $40 the second time a
donor comes in during the week. All of the above may differ between two donors at
difference centers or even within the same collection center, depending on the philosophy
of the specific collector as some differentiate donor payments based on weight while
others do not. Finally, there is a referral bonus whereby a donor will receive compensation
for bringing in a friend that successfully donates.

More recently, companies have taken a novel approach to repeat donor incentives. For
example, one company has now shifted to donor incentives where a donor will get paid
an amount based on the number of times a donor has come in over the previous 30 days.
For example, if a donor weighs 185 pounds and has come in eight times over the last 35
days, the donor will be paid $75 for their next donation. If that same donor had come in
an average of 6 times over the last 30 days, they will be paid $50 for their next donation.
This incentive obviously rewards consistency and loyalty. Another company has shifted to
flat donor fees, regardless if a donor is new or repeat, first or second in a week, second,
or fifth donation of the month. This makes the incentive structure far simpler and easy for
donors to understand and forecast how much they will earn. Finally, on the other end of
the spectrum, another company is shifting to personalized incentive structures just for
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repeat donors. This structure will take into account consistency, how long a donor has
been donating, and other attributes. It is unclear how these changes will impact the overall
donor incentive cost per liter across the industry, but it shows just how important this
decision is for collectors given how high a percentage donor compensation represents of
the total cost to collect plasma.

As a reminder, a donor is paid per unit, but all the prices identified here are per liter. The
average donation in our survey was 841 milliliters, or 0.841 liters. Thus, the per liter
donation fee is calculated by taking the per donation fee and dividing it by 0.841. There
is also significant geographical variability across the country as local economic and
demographic factors will dictate how much donors will be compensated, along with the
level of competition between multiple centers in a particular area.

The donor compensation cost component has seen a significant increase over the last 5
years, a trend which was exacerbated by the COVID-19 pandemic and resultant
government stimulus spending. Donor incentives have risen 94% over the last five years
going on average from $48 per liter in 2017 to $93 in 2022. This is the most expensive
component in the cost to collect a liter of plasma and represents 44.8% of the total cost
of collecting a liter of plasma. The donor compensation range in 2022 was $81 to $98, a
moderate range but shows the variability between different center networks and their
costs across the country. It is also a reflection of the impact of the short supply of plasma
that was seen in the market at that time. The companies that needed the most plasma
were willing to pay the highest donor incentive rates. Most responses were within the
range of $85 to $95. Those collectors that were on the low-end of the range saw a much
faster reduction in donor incentives the second half of 2022 and continuing into 2023
because they had the fastest increase in collection volumes or had centers that were in
more rural and suburban areas with very loyal donor bases. Collectors on the high-end of
the range were more desperate for plasma, or did not see a fast return to higher collection
volumes, or had centers that were in competitive markets, generally closer to an urban
metropolitan core.

Donor fees rose from 40% to 45% of the total cost to collect plasma from 2020 to 2022.
This is a dramatic rise of 5 percentage points, or an increase of $28.0 per liter of plasma
in just two years. This rise was 60.6% of the total increase in the cost to collect plasma
over that time, and illustrates the challenges that collectors had to attract donors in 2021
and in 2022.
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The 2017-2022 average increase in donor incentives was 14.4% annually, with the years
2017 to 2019 (pre-pandemic), averaging about the same increase at 9% while the years
2019 through 2022 averaged much higher at 18.1% driven by effects of the COVID-19
pandemic. That said, from 2015 through 2022, donor incentives saw a consistent annual
double-digit growth in donor incentives that pre-dates the COVID19 pandemic and is
mostly a result of intense competition for donors and the need to enlarge the donor pool.
The costs for donor compensation are expected to continue to increase albeit at a slower
rate, as discussed below in the forecast section.

Staffing Costs
This is made up of the hourly cost of staffing at the center plus the annual salaries of
center level management, quality, and other salaried employees. For most data collected
in the survey, this includes in-person training time for staff. Separately, the cost to recruit
and retain staff is included in the overhead numbers identified below. Much like donor
incentives, this cost is likely to have a high variance across the country as the local labor
market will be the primary determining factor as to how much staff gets paid. For example,
a Medical Assistant in a Texas border city might make just above the minimum wage in
that state, or just above $7.25 per hour. While in California, near Los Angeles, a much
larger city with a higher minimum wage, a Medical Assistant may make that states
minimum wage of $16.78/hour.

This highlights the importance of collectors in keeping track of both Federal and State
minimum wage legislation to make sure they are in compliance. For example, in California,
the minimum wage rose to $15 an hour for all employees on Jan 1, 2023 unless employers
have 25 or fewer employees, in which case they must pay at least $13 an hour. If there is
Federal legislation mandating a nation-wide $15 per hour minimum wage, current low
wage states will see the most drastic shift and precipitate rapid increase in staffing costs.
For collectors who already operate in higher wage states already, this will have much less
of an impact. According to the survey, there were significant staffing issues over the last
two years given the COVID-19 pandemic, government stimulus policies and inflation in
general and medical staff in particular. In general, it has been hard to find and retain
employees which has pushed up staffing costs across the industry. Please see Section 8
of this report for additional details around each main job title and role in the center.

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In 2022, the average center staffing cost per liter of plasma collected was $32.5, with a
range of $28 to $35. This represents 15.6% of the total cost to collect a liter of plasma and
is the second largest cost component after donor compensation. This compares to a
center staffing cost per liter of $25 in 2020, or a 30% growth in 2 years. This is 14% annual
growth rate over two years, or about 6-7% faster than inflation overall, but commensurate
with medical staff salary increases over that period. Staffing cost from 2020 to 2022 grew
at almost the same rate as the cost to collect overall (29%), so its contribution to the cost
increase was 16%, in line with its share of the total cost.

Collectors with the lowest staffing cost per liter had footprints in lower wage states, had
lower turnover rates, or operated in environments with very little competition for
employees (either other plasma collection companies or other job and healthcare
opportunities in general). High staffing turnover has a disproportionate impact on staffing
cost per liter as it lowers productivity overall and requires more employees to be on each
shift so that experienced employees can train new ones without impacting donation times
or a donor’s experience. Levels of competition between employers for the same employee
pool also has the effect of shifting collectors’ staffing costs to either the high or low end
of the range. If multiple centers are in an area and competition is high, employees know
they can easily jump between companies and obtain raises. This will push up staffing costs
to the high end of the range. If competition is low in an area, staffing costs will be at the
low end of the range.

Testing Costs
Every single plasma donation must be tested for diseases before it can be fractionated to
ensure product safety of end-use products. There are special tests required for new
donors, and each 4 months thereafter. For example, source plasma donors are tested for
syphilis initially and every four months thereafter. Applicant donors are also tested for
viruses such as HIV, Hepatitis (A, B, and C) and have their protein and hemoglobin levels
tested.

There are other tests required for each donation regardless of how many times a donor
has donated, this includes a different test for HIV, Hepatitis, and Parvo B19. There are also
confirmatory tests required when a positive is received to eliminate the possibility of false
positives. Some fractionators require additional one-off tests as well, depending on their
internal requirements, such as IgG protein concentration tests to determine donor
eligibility or compensation. Depending on the vendor, each test has a cost associated with
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it. For comparison purposes, the numbers reported/given are per liter and not per
donation in order to normalize comparisons with other metrics.

At a high level, based on our survey, in the US the average turnaround time for sample
results is 6 days with a range of 3 to 10 days. Much of this depends on test type, location
of the center, and if a center/company is using a vendor or have their own internal testing
capabilities. Serum protein electrophoresis (SPEP or SPE) tests have longer turnaround
times than viral marker tests (VMT) and nucleic acid tests (NAT). To note, the PPTA is
advocating for the elimination of the syphilis test. The PPTA and many member companies
consider the regulation as unnecessary for either product safety or donor health. At FDA’s
request, PPTA is collecting data on rates of positivity for FDA’s review. If the Syphilis test
is eliminated, this would be an average ~$1 cost saving per initial donation and every four
months thereafter for collectors.

The volume of plasma used for repeat donors’ sample testing depends on the collector
and/or fractionator and what they require from a testing perspective (some collectors
have two back-up samples that they keep with the donation, while others have one).
Typically for a repeat donor there are three, 3 milliliter (ml) samples drawn out of the main
donation bottle with the total usable donation volume going down by 9 milliliters. Two
samples are sent for testing, one for viral marker testing (VMT) and the other for nucleic
acid testing (NAT). The final sample is kept as a back-up sample. This lost volume is not
factored into the cost to collect or the volume listed on the bottle. For an applicant donor,
there is no additional sample volume requirement as the serum required for SPEP is taken
from whole blood and does not come out of the donation plasma bottle.

In the 2022 survey, the cost for testing averaged $23.50 per liter with a range of $17 to
$26.50 per liter. This is compared with an average testing cost of $21.50 per liter in 2020,
or just $2.00 less over two years. This translates to a 9.3% growth, or 4.5% per year, or
below the most recent inflation rate from 2020 to 2022. This is due to the fact that a lot
of contracts were multi-year, and made before the recent high rates of inflation, with new
contracts showing a bump up in cost. It is the fourth most expensive cost component
and represents 11.3% of the total cost of collecting a liter of plasma. This has gone down
2% from 2020 when it was 13.3% of total collection cost. Testing only contributed 4% to
the total cost increase over the past two years, or 15 times less than donor compensation.

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Testing fees on the low-end of the range ($17-$22) had the highest sample volume being
sent through their own internal testing capacity. Those on the high-end of the range ($24-
$26.5), either did not have their own internal testing capacity, had comparatively low
volumes (not one of the largest collectors), or relied solely on third party vendors to do
their testing. The trade-off with having a lower price is typically an increase in sample
result turnaround times. As it outlined in the Testing section below (Chapter 11 of this
report), the fastest turnaround times are provided by the largest third-party testing
vendors in the industry, but they usually charge more for this service.

The other determinant of where a collector sits in the testing cost range is the overall
proportion of applicant/4-month donors in a company's donor pool. It generally costs
between 25% to 35% more (~$26-30) to test applicant and every 4-month donors than a
regular repeat donor. The number of applicant donors can be impacted by how many new
centers are being opened scaled across a collector’s fleet and/or the loyalty of a
collector’s donor base (since the more loyal, the fewer new donors will be needed to fill
each center). For companies in the process of aggressively ramping up, their cost per liter
of testing will be higher given that a larger proportion of their donors require more
expensive applicant testing. This variability is dependent on how fast each new center is
ramping up and a center’s current volume compared with its overall capacity. The cost for
testing has remained relatively stable compared with other more donor-driven cost
components, however there are important metrics such as turnaround times that are
closely measured by both collectors and fractionators.

Soft goods/Kits/Disposable Costs

This is the disposable kit that is sold by the collection device manufacturers (Haemonetics,
Fresenius Kabi, and Terumo BCT) that is used in each donation. They include tubing, bowl/
spinner/channel, harness, bottle, anti-coagulant, and/or saline. Each vendor and the
different types of soft goods/kits/disposables is discussed in detail in Chapter 9 of this
report.

In the 2022 survey, the cost for soft goods averaged $18.4 per liter, with a range of $14
to $22 per liter, a $2.4 increase on a per liter basis. This component is up 15.0% from the
2020 survey when the average was $16 per liter. Disposables were responsible for 5% of
the cost growth from 2020 to 2022. Disposables are the fifth most expensive cost
component and represent 8.9% of the total cost of collecting a liter of plasma. The two
main determinants of where a collector lies in the range is; 1) which collection device the
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collector is utilizing, and 2) when the contract was executed with the vendor. As outlined
in Chapter 9, each apheresis device has unique capabilities that has evolved over time.
The industry is in a generational shift from older devices that have been in the field for 25
years to new devices with updated capabilities from both hardware and software
perspectives. These new devices are a premium product and cost more compared with
their predecessors, but given the additional plasma volume yield, promise to save costs
in other expenditures, like donor compensation, testing and staffing costs, on a per liter
basis. The collectors that have a higher percentage of new devices will generally have a
higher cost per liter for their soft goods/kits, though they will have all the associated
benefits with these updated devices, including higher efficiency and collection volumes
and slightly lower staffing and testing costs. Collectors that use the oldest devices on the
market or choose not to turn on the higher yield capabilities in a new machine have the
lowest cost per liter for their soft goods/ kits. This shift in hardware will have a significant
cost impact for this component over the next few years, as discussed below in the forecast.

Medical Supply/Hazardous Waste Costs

These are other supplies used in the donation process that are outside of the soft
goods/kits/disposables identified above. This includes items such as needles, test tubes,
gauze, coflex, and Personal Protective Equipment (gloves, face masks, shields, etc.),
among others. This cost bucket also includes hazardous waste costs which are required in
center operations to destroy any biohazardous waste and byproducts of the collection
process such as used needles, gloves, units that must be destroyed, and used soft
goods/kits (Spinner/bowl/channel, harness, tubing). As for trends, supplies have seen
increases in cost due to inflationary pressures and supply chain challenges, especially
during the COVID19 pandemic. At the start of the pandemic, PPE was difficult to come by
but costs came down from their peak in 2021 and settled down to above pre-pandemic
levels. Further increases in costs have slowed.

In the 2022 survey, the cost for soft goods averaged $6.8 per liter, with a range of $5.5 to
$9 per liter. This is a $0.8 increase per liter, or 13.3%. Medical supplies are the sixth most
expensive cost component (or second cheapest category) and represents 3.3% of the total
cost of collecting a liter of plasma. Only 1.7% of the total cost increase from 2020 to 2022
was due to this cost component increase. There is variability between vendors in terms of
cost per unit, but the biggest determinant of where a collector lies within the medical
supplies cost range, is how efficient a collector is in utilizing these supplies. For example,
those with the highest cost per liter for medical supplies have employees that use extra
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supplies when not necessary or have a high rate of donation re-sticks (meaning multiple
needles are used in one donation). A high medical supply cost per liter is typically a sign
of inexperienced or low performing staff.

Software/Automation Costs
This category refers to the BECS software systems in place that automate the donation
collection process and makes it partially or fully paperless. At the current time, there is
one main external vendor for this software – Haemonetics. Mak Systems was a major
vendor that has lost nearly all its market share in the United States. These vendors are
discussed in depth in chapter 10. Much like the disposable kits above, the software is
charged on a per collection basis for companies that do not have their own internal BECS.
The collectors with their own proprietary BECS software do not have a per donation cost
associated with it but there is significant cost to create and maintain the software. The
numbers listed below represent the per liter cost to collectors that use one of the major
software vendors. The larger companies which have their own system would have some
similar cost, though perhaps only 50% the average listed here, to maintain their own BECS
software and continually improve it to match the third-party offerings for features and
function.

In the survey, the cost for software/automation averaged $3.5 per liter with a range of $2
to $6 per liter. This compares with the 2020 survey when it was $3 per liter, or a 16.7%
growth over two years. Software contributed only just 1.1% of the growth of collecting
plasma over the past two years. Software is the smallest plasma cost component and
represents 1.7% of the total cost of collecting a liter of plasma on average in 2022. The
major determinant of where a collector fits within the range is the overall volume of the
company. Those with the highest cost typically have lower overall total collections volume
along with the latest version of each system or the most modules offered by the software
company. Those on the low end of the range have high corporate volumes with a mix of
newer generation and legacy systems that use less software/automation.

Center Overhead Costs

Center level overhead includes items such as rent, utilities, Common Area Maintenance
(CAM) charges, office supplies, Information Technology (IT) such as Wifi, software systems
and products that are not included in process automation software, and a multitude of
other items. Given the variability of real estate costs, varying degrees of technology

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utilized by each collector in the process, and what is considered “overhead” in each
collection company, this category has a large range and high variability.

In the 2022 survey, the cost for overhead averaged $30 per liter, with a range of $24 to
$48 per liter. This compares with an average of $25 per liter in the 2020 survey, an increase
of $5.0 per liter, or a 20% increase in two years. This growth is just ahead of the inflation
over the past two years. Center overhead was responsible for 11% of the increase in
collecting a liter of plasma from 2022 to 2020. Overhead represents 14.4% of the total
cost to collect a liter of plasma in 2022 and is the third largest cost component after donor
compensation and staffing costs. Most overhead responses were within the range of $25
to $34, with outliers higher up to $48. Collectors with the highest center level overhead
had the majority of their centers in high density, core urban areas with much higher real
estate costs. Given the high volume and traffic of these centers, they also tend to utilize
more software and technology throughout the process and in the center to increase
throughput, in an effort to control staffing costs. Those on the low-end of the range have
the majority of their centers in lower density areas with lower real estate costs. They are
also often lower volume centers and oftentimes can operate efficiently without all
potential IT and software resources.

Corporate Overhead is not included in plasma collection costs in this report:

It is important to note that corporate overhead is not included in the cost to collect
numbers quoted above in this report as it varies significantly across collectors. Corporate
overhead can be a significant cost when looking across an organization and its fleet of
collection Centers. For example, to maintain quality systems (have internal audits etc.), IT
systems, and training, it is necessary to maintain a significant corporate team. Depending
on how large a fleet the company has, these costs will be amortized over a higher or lower
volume. While these costs are not included in the per liter cost information captured
above, it nonetheless represents general administrative costs for determining operational
profitability for the company as a whole.

Forecast of Costs to Collect a Liter of Plasma to 2032

Assumptions for the Forecast of Cost Components to Collect Plasma

Many of the same assumptions used for the forecast of plasma collection centers and
collection volumes is used for the forecast of the cost to collect plasma. Of particular note,
this forecast assumes no recessions or other economic shocks to the United States
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economy beyond the softening of the economy in the second half of 2023 or early 2024.
After that, the forecast assumes a moderately growing economy, where economic growth
keeps unemployment low and wages rising at an average rate of the past 10 years, with
slightly higher inflation only in 2023. A recession between 2024 and 2032 would affect the
cost of collecting plasma, in much the same way as mentioned in chapter 3 above. In
short, a recession with high unemployment and little government stimulus would result
in an easier time getting donors, lowering donor fees compared to the forecast here but
also probably lowering some of the other components, like staffing costs and some
overhead. In contrast, a robust government stimulus which preserves incomes in the face
of a future recession (as happened in 2020-2021 during the pandemic, would mean the
recent scenario of difficulty in recruiting more donors which resulted in donor
compensation rising significantly. Thus, the cost to collect plasma may not be much
different than the present forecast even in a recession if the government has a robust
enough economic response.

General medical inflation (most relevant for plasma collectors) is assumed to be 2.5% per
year on average, though for the first year of the forecast (2023), the general medical
inflation rate is assumed to be 3.5% given persistent inflation. The medical inflation rate
has the most impact on salaries of medical employees, which are one of the largest
components of the index but also affects other components such as testing, medical
equipment and supplies.

It is important to note that the forecast values in this report are not adjusted for inflation,
as the nominal prices are listed in all cases. If one wanted to adjust for inflation, then the
values would need to be divided by the inflation rate, expected to be about 2% on average
over the forecast period.

Effect of Higher Nomogram Devices/Software on Cost to Collect a Liter of Plasma

As detailed in Chapter 9 and 10 below, the newest plasmapheresis devices with new
software, particularly the Haemonetics NexSys device with Persona software, has the
ability to collect 9-12% more plasma per donor than before. This has broad implications
on the cost to collect plasma, as an efficiency gain effects the cost of most other
expenditures on a per liter basis. For example, if a donor previously donated 880 ml of
plasma, and now donates 950 or even 1000 ml for the same amount of compensation,
the plasma collector has effectively lowered its donor compensation fee by 9-12% on a
per liter basis. The same holds true for testing costs, as the cost is charged per donation,
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not per liter, so a larger average donation reduces testing costs when measuring on a per
liter basis. This even holds true for staffing costs on some level because the amount of
work to process a 950-ml or 1000-ml donation is roughly the same as for an 880 ml
donation. All expenditure categories are similarly affected, though the companies
providing the increased benefit of higher volumes per donation (the device companies)
are charging more for their soft goods/disposables for this benefit. Thus, all categories of
cost have a reduction in the per liter basis for centers which use this new technology,
except soft goods, which have higher costs which are justifiable due to the extra benefit
they provide.

For the model described below, an 8.5% reduction in cost compared to the year before is
assumed for each center or liter of plasma that is collected by the new devices/software.
This includes the Haemonetics NexSys device which some companies already started
adopting in 2020 and 2021, but also Fresenius Kabi’s answer to Persona and Rika’s high
volume collection procedures which are also expected to be on the market in the near
future. This is slightly lower than the 9-12% claimed by Haemonetics for their NexSys
device with Persona software, the only manufacturer to have successfully deployed the
new nomogram and published a study so far. This lower assumption accounts for some
small amount of additional cost that might arise from the higher donation volumes (say
longer donation times). The 8.5% reduction benefit when compared to the previous years’
cost only applies for the first year that a center switches to the new technology. After the
first year using the new technology, the cost reduction benefits are annualized and thus
the cost returns to the historical rate for that center.

In terms of changes to average volume, the current average per donation volume in 2021
was 0.829 liters. As the forecast assumes an average 8.5% benefit, this is 0.071 liters (0.830
L * 8.5% = 0.071 L ) more per donation, making the new average volume per donation for
the centers that switch to the new nomogram, 0.900 liters (900 ml).

Because the cost reduction benefit is based on the year of centers switching, it is
important to understand the uptake of this technology throughout the entire industry on
a per year basis. In 2021, the only company which offered this donation volume
improvement was Haemonetics, with their NexSys device and Persona/YES software. 5%
of the total industry (about 6-7% of Haemonetics’ total customers base) switched to the
latest device/software by Haemonetics in 2021, thus getting the 8.5% reduction in cost
for most components beyond the soft goods and software. In 2022, another 9% of the
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total market switched to the higher yielding donation volumes, making the total portion
of the market 14%. In 2023, no significant collectors are switching their centers to higher
yielding processes, but some carryover from 2022 means that 3% are switching from a
benefit perspective. In 2024, 35% of the total are expected, as the three largest companies
to switch in mass. By the end of 2024, a total of 52% of the market, or just over half, will
be using the higher yielding collections. In 2025, another 35% of the market switches over
to higher volume donations, making it the majority of the market at 87% of total
collections. By the end of 2025, all the major collectors will have switched most of their
fleet to higher volume donations, with less than 20% needing to switch in 2026 (10% of
the total market). By the end of 2026, a total of 97% of the market will be using the higher
volume donation technology, and we assume it stays at that level for the remaining years
of the forecast.

Some centers (about 3% of total) will not want to switch to the higher yielding technology,
either because they don’t want to pay the higher softgoods costs, don’t want the newer
machines (keeping legacy systems), or otherwise don’t see the benefit of the latest
options. These companies will keep with the traditional 880 ml maximum volume for the
rest of the forecast using the YES/Optimized nomogram offerings from HAE and
Fresenius. If the plasmapheresis device companies do eliminate the standard nomogram
options in the future, and only permit devices with the optimized and personalized
volumes, then the market could go to 100% of collections on higher volumes, but this
would only change the forecast slightly given the high expected penetration in the
forecast here.

For the purposes of this forecast, we put aside the possibility of a legal dispute between
Haemonetics and the two other device companies and forecast high volume uptake as if
other collection device manufacturers can and do offer a similar product. For Fresenius
Kabi, the forecast assumes the additional yield product gets significant uptake in 2024
and finishing by 2026. For Terumo’s Rika, the forecast similarly assumes strong uptake
from CSL starting in 2024 and completing in 2026. The previous forecast from two years
ago assumed a higher donation volume uptake for CSL starting in 2026, so it has been
moved forward by two years due to better knowledge of rollout plans.

In terms of overall effect, the benefit of this technology helps bend down the cost
increases for the years 2023 through 2025, despite paying more for the soft goods and

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software. Without this benefit, we estimate the cost of collecting plasma would be about
5% higher in 2026 than the forecast currently assumes.

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Forecast of the Cost Components to Collect a Liter of Plasma 2018-2032

Cost Components to Collect a Liter of US Source Plasma

CAGR
Cost Components to Collect a Liter of Plasma 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2022-2032
Average Donor Compensation ($/liter) $52.0 $57.0 $65.0 $85.0 $93.0 $83.0 $83.8 $84.9 $88.0 $92.9 $98.0 $103.4 $108.5 $113.9 $119.6 2.6%
Donor Center Staffing $24.0 $24.2 $25.0 $32.0 $32.5 $30.5 $30.9 $31.2 $32.0 $33.2 $34.5 $35.9 $37.3 $38.8 $40.3 2.2%
Product Testing (NAT, VMT, etc) $18.2 $20.0 $21.5 $22.5 $23.5 $24.0 $23.9 $23.8 $24.2 $24.8 $25.4 $26.0 $26.7 $27.3 $28.0 1.8%
Soft goods/ Kits/ Disposables $15.0 $15.5 $16.0 $17.3 $18.4 $19.1 $20.2 $21.1 $21.9 $22.4 $22.8 $23.3 $23.7 $24.2 $24.7 3.0%
Medical Supplies/Hazardous Waste $5.0 $5.2 $6.0 $6.5 $6.8 $6.9 $6.9 $6.9 $7.0 $7.1 $7.3 $7.5 $7.7 $7.9 $8.1 1.8%
Software $2.6 $2.8 $3.0 $3.1 $3.5 $3.6 $3.6 $3.6 $3.7 $3.7 $3.8 $3.9 $3.9 $4.0 $4.0 1.4%
Center Overhead (Rent/maintenance, etc) $22.0 $23.0 $25.0 $32.0 $30.0 $29.5 $29.9 $30.0 $30.8 $31.9 $33.0 $34.0 $35.0 $36.1 $37.2 2.2%
Total Cost per Liter $138.8 $147.7 $161.5 $198.4 $207.7 $196.6 $199.2 $201.5 $207.6 $215.9 $224.8 $233.9 $242.8 $252.2 $262.0 2.4%
Annual Cost Growth 6.4% 9.3% 22.8% 4.7% -5.3% 1.3% 1.2% 3.0% 4.0% 4.1% 4.0% 3.8% 3.9% 3.9%

Donor Compensation Annual Growth 9.6% 14.0% 30.8% 9.4% -10.8% 0.9% 1.4% 3.6% 5.5% 5.5% 5.5% 5.0% 5.0% 5.0%
Staffing Growth 0.8% 3.3% 28.0% 1.6% -6.2% 1.4% 0.9% 2.6% 3.5% 4.0% 4.0% 4.0% 4.0% 4.0%
Testing Growth 9.9% 7.5% 4.7% 4.4% 2.2% -0.5% -0.5% 1.6% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Softgoods Growth 3.3% 3.2% 7.8% 6.7% 3.6% 5.8% 4.6% 3.8% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Software Growth 4.0% 15.4% 8.3% 3.8% 2.7% -0.5% -0.5% 1.6% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Medical Supplies/Haz Mat Growth 7.7% 7.1% 3.3% 12.9% 2.7% 0.4% -0.5% 1.6% 2.0% 2.0% 1.5% 1.5% 1.5% 1.5%
Center Overhead Growth 4.5% 8.7% 28.0% -6.3% -1.7% 1.4% 0.4% 2.6% 3.5% 3.5% 3.0% 3.0% 3.0% 3.0%

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Overall Cost to Collect a Liter of Plasma
In 2022, the average cost to collect plasma, based on our survey, was $207.7 per liter. This
was a 4.7% increase from the previous year, as high donor compensation costs persisted
through most of the year. This compares with an average cost of $161.5 per liter in 2020,
and $138.8 in 2018. Thus, the growth rate from 2018 to 2022 was 10.6% per year.

The end of the pandemic, historically high inflation (especially in food and gas after the
Russia-Ukraine war) and rise of interest rates in the second half of 2022 and continuing in
2023 caused many more potential donors to show interest in donating. The economic
need for supplemental income had returned, much as it existed in the years before the
pandemic. This allowed companies to collect significantly more volumes of plasma, and
consequently they didn’t need to compete so strongly for new donors by advertising and
setting very high donor compensation. As a result, the forecast predicts that average
donor compensation in 2023 will drop $10 per liter, or almost 11% from 2022 to 2023,
and average just $83/liter for the full 2023 year.

The forecast predicts the cost of $196.6 to collect a liter of plasma in 2023, down 5.3%
from the year before, and the first drop in the cost to collect plasma since at least 2009.
This translates into a $11.0 decrease in cost per liter between 2022 and 2023 and puts the
2023 cost just below that of 2021. The value of $196.6 in 2023 is still 22% higher than it
was in 2020, just 3 years earlier, but inflation has been high over the past 3 years with
Core CPI at 13.8% and total inflation at 17.2% cumulatively. In this way, the 2023 average
cost per liter to collect is only about 3% higher after adjusting for inflation.

In 2024, the cost is forecast to reach $199.2, a rise of just 1.3%, as most components slowly
rise in price and companies switch to high volume donation processes, lowering overall
costs as discussed above. This will be the slowest price increase since 2015 except for
2023. The increase is just $2.6 over the prior year. In 2025, further efficiency improvements
of higher volume donations suppress cost growth further, resulting in a just a 1.2%
increase in cost over the previous year, or $201.6 per liter. The 2025 cost is forecast to be
still 2.9% lower than the 2022 costs, but 25% higher than 2020. The total cost in 2026 is
$207.6 per liter, a 3.0% increase from the year before, as most of the benefit of the higher
donation volumes have already been priced in the prior two years and so the cost increase
returns to a higher rate. Still, 2026 costs are still the same average per liter as 2022 in an
inflation unadjusted way (and thus still cheaper than 2022 prices when adjusting for
inflation).
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From 2027 through 2032, the average annual cost increase is nearly constant at 3.9% to
4.1% per year. For these final 6 years, there is no more benefit of the higher volume
donation technology, and the assumption of a moderately growth economy throughout
the final forecast years means the prices rise steadily according to the dynamics of each
cost component (described below). Most years, the increase of about 4.0% equates to
around a $9-$10 increase per liter per year. By 2027, the forecast assumes a continued,
uninterrupted expansion in the economy with stable and low unemployment, so the
market grows at what could be called its normal rate. This is around 4.0% per year for
plasma collection costs excluding any technology switch, which is higher than the medical
inflation rate of 2.5%, driven principally by the donor compensation rate, but also by staff
costs, as discussed below.

In dollar terms, the cost rises from $216.0 per liter in 2027 to $242.9 in 2030 and then
$262.0 per liter in 2032. The cumulative growth from 2027 to 2032 is 21%. The 2023-2032
overall average growth rate is 3.2%, and the final year’s cost is 33% higher than it is in
2023 and 62% than 2020, a significant increase that will have far reaching effects on both
the price of plasma but also the price of the main products from plasma, i.e.,
immunoglobulins.

Each component of the cost in collecting a liter of plasma is described in detail below.

Donor Compensation Forecast

The largest cost component for the collection of a liter of plasma is donor compensation.
In 2023, donor compensation is forecast to average $83 per liter on average, 28% higher
than 2020 but 10.8% lower than the year before. This corresponds to a drop of $10/liter
on average, a large drop in one year, and equivalent to a 4.8% drop on overall collections
by itself. Donor compensation will represent 42.2% of the total cost to collect plasma in
2023, down from 44.8%.

The decline in donor fees stems from several reasons. One of the most important is the
dramatic reduction in the new donor payments, as they reached $1100 to $1200 total
compensation for 8 donations in early 2022 but had dropped to $450 to $500 for some
large companies by the second quarter of 2023. Others maintained higher new donor fees
at around $750 for 8 donations. The decline in donor fees also stems from lower bonuses
paid to return donors, and lower regular fees. Finally, an increasing portion of the donors
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in 2023 (compared with 2022) are US-Mexico donors (since the border opened back up
in late September), where donor fees are lower than the US average. All these factors work
to push down donor fees in the near term, as the “push” factor from high inflation means
that people are more willing to donate in 2023 compared to the year before, even at lower
donor compensation rates.

Despite this drop in donation fees in 2023, the overall donor compensation is not
expected to drop close to the rates prior to the Covid19 pandemic for the following
reasons:

- Increased competition between collection centers in the US for donors (especially

high frequency ones) will push prices higher as higher fees are a strategy to grow
collections at the expense of nearby competing centers. As more centers are
added, many in the same metro areas, the cycle of higher fees will reinforce itself
as more centers face nearby competition pulling from the same donor population.

- Need to expand the donor pool beyond current donors. As the demand for plasma
rises, plasma companies will need to have more and more donors every year. This
means the collectors need to expand the pool of donors, and one of the most
straightforward ways to do this is incentivizing more people by offering attractive
compensation. The growth in the interested donor population expands in a non-
linear fashion as the donor incentives increase. There is a proportionally larger
group of people willing to donate plasma for an average of $85 per liter than $60.
There is an even larger proportion of people willing to donate at $110 per liter than
$85, and so on. As the group of donors needs to rise significantly to reach the
forecasted demand for plasma, higher donation fees are one of the principal
methods (along with opening new centers), that will be able to achieve this growth.
Another way to attract donors is to improve the donation experience by offering
special services and perks, such as giveaways of free headsets or other gifts, etc.,
which is included in donor compensation costs overall.

- Inflation means that a payment of $70 in 2023 is equivalent to $59 in 2020 dollars.
The same $70 payment in 2024 is only worth $57 in 2020 dollars. Because of the
substantial inflation since 2021, the payments in nominal terms will continue to
rise, though they may be close to flat when adjusting for inflation.

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As a result of the related trends above, donation fees are likely to continue to increase
after 2023’s reset to more stable prices. While they won’t grow fast in 2024 and 2025 due
to the higher yielding donation technology being adopted (and thus fewer donors are
needed for the same volume), this trend ends in 2026 and afterwards a higher-than-
average rate compared to inflation or even other components is forecast.

In 2024, the forecast donor compensation per liter is $83.8, just a 0.9% increase over 2023,
or just $0.8/liter higher), as some of the adjustments in 2023 are annualized in 2024 and
some of the largest companies don’t need to increase their donor pool because they are
switching to higher volume donation processes. The increase would have been higher by
4% if not for the volume enhancing benefits of newer collection devices and software
from. Donor compensation will represent 42.0% of the total cost to collect a liter of plasma
in 2024, up from 31% in 2020.

In 2025, the average donor compensation per liter rises to $84.9, up only 1.4% from the
previous year and represents 42.1% of the total cost. This is just a $1.1/liter rise from the
previous year. As with 2024, the fee doesn’t rise as much in 2025 due to the higher volume
enhancing devices/software. In 2026, the donor compensation costs are expected to rise
by 3.6% per year to reach $88.0/liter, an increase of $3.1/liter, or 3 times the previous two
years. This rise is more than in 2024 and 2025 as the benefits of the increase volume per
donation are mostly annualized, though there is still some final switching in 2026 (10%
total). Donor compensation represents 42.4% of the total cost of collecting in 2026, just
slightly more than in 2025 (42.1%).

In 2027, the average donor compensation per liter rises 5.5% higher from the previous
year to reach $92.9/liter on average. This is a rise back to the previous peak, which was
$93.0 in 2022 during the end of the pandemic and government stimulus. There is no more
yield enhancing device conversation benefit by 2027, so all companies must seek more
donors in order to grow their collections. The most straightforward way is to raise donor
fees to attract larger groups of donors. Donor compensation represents 43.0% of the total
cost to collect a liter of plasma in 2027. In 2028 and 2029, donor costs rose 5.5% per year,
reaching $98.0 in 2028 and $103.4 in 2029. This is a growth of $5-5.5/liter increase each
year, as companies continue the strategy of raising donor fees to attract ever larger
numbers of donors (and more frequent donations among current donors) to grow
collections. Donor compensation represents 43.6% and 44.2% of the total cost to collect
plasma in 2028 and 2029, respectively.
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From 2030 through 2032, the donor compensation rises 5.0% per year to reach $119.6
per liter in the final year of the forecast, representing 45.7% of the total cost to collect
plasma. This is the highest share for donor compensation in the forecast, or recent past.
However, it takes until 2031 for donor compensation to represent a higher portion of total
plasma collection cost than it does in 2022, the last year of the pandemic. The donor
compensation will be 29% higher in 2032 than in 2022 and 44% higher than 2023. In dollar
terms, donor compensation per liter is $26.6 higher than 2022 and $36.6 higher than 2023.
The annual increase in donor compensation per year is $4 per liter from 2023, which is
over half (55%) of the total increase in the cost to collect plasma per year. Donor
compensation remains by far the most expensive component of collecting plasma, and
rises in importance over the course of the next 10 years.

In 2032, the donor compensation component to collect plasma is the same as the total
cost of all the cost components in 2015. The 2022 to 2032 annual average growth is just
2.6%, just above the average of 2.4% for all components combined. When looking at 2023
to 2032 average growth, the donor compensation grows 4.1% per year, the highest of any
component. The reason for this, as described above, is that raising donor compensation
at higher than inflation rates will be necessary to attract an ever-larger pool of donors to
competitive centers to meet the increasing demand for plasma.

Staffing Costs Forecast

After donor compensation, donor center staffing is the next highest cost component, and
has several factors contributing to a faster growth than inflation (even above medical
inflation) through 2032, though not in the near term. In 2022, total staffing costs
amounted to $32.5 per liter of plasma, a rate that was just 1.6% above the year before. It
represented 15.6% of the cost to collect a liter of plasma. In 2023, the center costs are
expected to fall to $30.5 per liter, a drop of 6.2% in one year, or $2.0/liter, and represent
15.5% of the total cost. The reason for this dropping cost is due to higher efficiency and
use of staff in 2023 as collections are higher, especially compared with early 2022. In
addition, the ending of the COVID-19 pandemic lessened some of the competition for
healthcare works thus limiting increases in salaries. In addition, as the economy slows in
2023, salaries are likely to flatten further. The main story is better utilization of the same
employees across more donations lowers the per liter average.

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In 2024, the staffing costs rise just $0.4/liter to $30.9, just a 1.4% rise. This low rate of
increase is largely due to the efficiency benefits of higher volume devices/software. Just
like with donor compensation, there is no extra staffing costs required to have a donor
give 900 ml of plasma than 830 ml. With the larger donation, the volume of plasma is
higher so the per liter metric decreases. Absent this benefit, the center staffing costs
would have likely grown around 2.5% to 3.5% in 2024, representing about $0.5/liter
savings. Another factor lowering the staffing costs is the trend of locating new centers in
smaller areas with less competition for labor and lower general labor costs. In 2025, the
same conditions as in 2024 apply (switch to higher volume donations and location trends),
leading again to a low rate of center staffing growth. The cost of staffing per liter is
forecast to be $31.2 in 2025, up just 0.9% from the year before. Center staffing is expected
to be 15.5% of the total cost to collect plasma.

Starting in 2026, with reduced benefit of switching to higher volume devices/software,

the annual increase in center staffing starts to rise above the medical inflation rate. In
2027, the growth is 2.6% to $32.0 per liter, a $0.8 increase. In 2027, with the switch
complete, the staffing increase is 3.5% higher than the previous year, to $33.2/liter. It rises
even higher in 2028, at a 4.0% growth to $34.5/liter, and continues to grow at 4.0% every
year through 2032.

After the switch to higher volumes devices/software is complete, the center staffing costs
faces the following reasons for above inflation level growth:

- High turnover among staff causes employees to move to nearby competing

centers for higher pay. With a turnover rate of 85%, most employees are new every
year.

- To counteract the threat of good employees leaving to a competitor for higher

pay, companies will offer around 3% pay raises every year, on average for veteran
employees.

- Increasing state minimum wage laws (and potentially a raise in the national
minimum) can increase some employees’ wages by more than the 3-5% in a single
year, pushing up the average.

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The 2022 to 2032 growth rate for staffing expenditures is 2.2% per year on average,
slightly lower than the overall cost increase (2.4%). Comparing the 2023-2032 CAGR is
3.2%, the same as overall collection cost growth over the same period. Staffing cost
increases rise less than 1 percentage point higher the medical inflation rate overall but
are held to lower than the levels in the first years of the forecast, for the technology
change reasons outlined above. As a percentage of the total cost to collect a liter of
plasma, staffing costs stay fairly constant over the forecast, going from 15.5% in 2023 to
15.3% in 2028 and 15.4% in 2032. It remains the second highest expenditure overall.
Staffing cost increases about $1.0 per liter per year, or about 15% of the total increase in
the cost of plasma per year from 2023 onwards. Staffing costs will be 32% higher in 2032
compared with 2023 and 24% higher when compared with 2022. In dollar terms, center
staffing is $7.8 higher than 2022 and $9.8 higher than 2023.

Center Overhead Forecast

The main component of this cost is the rent and property maintenance of the location
where the collection center is situated. In 2022, the cost was found to be about $30.0 per
liter, or 14.4% of the total cost. The main growth drivers of center overhead are the pace
at which rent and maintenance increases in the future, but also the efficiency and number
of collections per location, since this center overhead is a fixed cost, not per donation like
the majority of the other cost components. Higher collection volumes will result in a lower
center overhead cost per liter, while lower volumes will lead to the reverse. There are cost
drivers which are negative and positive for increasing the cost per liter of center overhead
in the future. The drivers causing a sustained increase in center overhead on a per liter
basis over the long-term are:

- Competition for good new plasma center locations is driving up the cost of leases
for new locations. Even with a focus on going into lower density areas, over time
there will be increased competition between collectors. Property owners are now
aware of the plasma collection industry and in the most competitive areas, are
getting sometimes multiple bids or offers for well-located and situated properties,
which has driven up rents.

- Since center overhead is a fixed cost, the efficiency or volume of plasma collections
per center also has an impact on the prorated per liter cost. As mentioned above,
the average collections per center is forecast to slowly decline, at about 1-2% per
year and there will be a focus on smaller centers. While allowing centers to open
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 population areas not served by existing centers, they will likely be less efficient
given their smaller footprint with a similar staffing structure. For example, a Center
Manager’s cost being spread over 25,000 liters of collection per year vs over 70,000
liters), even if the former manager is paid less than a larger center manager. In
addition, as competitive centers are built out over time, centers will cannibalize
each other’s donors, and established centers will lose a percentage of donations
per year even though their rental costs are static. This means these centers will be
less efficient as time passes. These smaller centers and inter-center cannibalization
reduce efficiency and has the effect of increasing the per liter cost of center
overhead in aggregate.

The drivers leading toward falling (or growing slower than the rate of inflation) costs for
center overhead are:

- Lower demand for retail spaces at present (2023 and next few years) due to higher
interest rates are in general leading to more opportunities for plasma companies
to get a good lease rate than compared with two years ago (2021).

- The strategy of going into smaller towns and populated areas with smaller centers.
Real estate costs are lower in smaller towns and less populated areas, so the center
overhead can be less for those centers compared with urban locations.

- Smaller center footprints open up new retail locations that give a collector more
flexibility (and leverage) to pursue those with good lease rates. This can lower the
average just because the supply of smaller locations is bigger, leading to more
competition for the collector’s business.

The combination of positive and negative cost drivers creates a mixed scenario, where
costs fall in 2023 and rise slowly in 2024 and 2025, but then return to higher growth as
the negative cost drivers are exhausted over time, and the positive cost drivers are
sustained over the entire forecast. In 2023, center overhead costs fall $0.5 per liter to
$29.5. This is a 1.7% decline in costs, and center overhead represents 15.0% of the total
costs to collect plasma in 2023. The falling costs are mostly due higher collection volumes
(and thus lower per liter costs), but also due to the higher availability of real estate because
of a soft retail market in general, allowing plasma companies to achieve good lease rates.
In 2024, the costs rise slightly to $29.9%, or 1.4%. Collection volume per center is no longer
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increasing (thus no benefit on a per liter basis), and lease rates are expected to have
stopped falling, but rent rates are still low. In 2025, costs rise just 0.4%, to $30.0, and
center overhead represents just 14.9% of the total costs to collect plasma. The cost in
2025 is the same per liter as in 2022, representing no growth over a 3 year period. This is
achieved by raising the collection volumes per center, finding good lease rates in a soft
retail environment, but also the strategy of smaller centers in smaller cities or smaller
spaces with competitive lease rates.

In 2026, as with some other costs like staffing, the costs begin to rise as collectors need
to open more centers and the benefits of higher volume collections wains. In addition,
the benefits of a soft retail environment may be over by 2026, and smaller sites, while cost
competitive, will begin to see more competition from other collectors, pushing up prices
modestly. This leads to a per liter center overhead cost of $30.8, or 2.6% higher than the
year before. In 2027, the overhead rises 3.5% to $31.9/liter, and rises the same rate to
$33.0 in 2028. From 2029 through 2032, the center overhead cost rises 3.0% per year, and
finishes the forecast at $37.2/liter. This is 14.2% of the total cost to collect plasma in the
final forecast year. From 2027 to 2032, the annual rise is about $1 per liter.

The latter year increases are higher because the trends mentioned above are expected to
be more intense in the back half of the forecast (after 2026) than the first few years. This
is particularly true for the competition between centers and the percentage of center built
in higher cost areas over time.

Center overhead remains the third highest cost expenditure over the forecast. The 2022-
2032 average annual growth rate is 2.2% (compared with 2.4% for the total cost) but
weighted to the back half of the forecast for the reasons mentioned above. The 2023-
2032 growth rate is 2.6% per year, which is slightly below the overall cost increase of 3.2%
per year, and nearly on par with traditional real estate cost increases.

Product Testing Costs Forecast

Unlike the previous two cost component categories, there is no major changes or driving
forces causing product testing for NAT, VMT, etc. to deviate much from the medical
inflation rate or 2.5% per year on a per donation basis. This is a contracted cost (if not
insourced), and the price generally rises at the rate of the related inflation (in this case
medical inflation rate). In 2023, the testing cost is $24.0/liter, up $0.5 or 2.2% from the

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year before. It represents 12.2% of the total cost to collect a liter of plasma and is the 4th
most expensive component overall.

Since the product testing cost is directly tied to the number of donations, and not number
of liters collected, a move to larger donation volumes with new devices/software will lower
the overall cost per liter for this category. As a result of the significant shift to personalized
nomograms averaging 8.5% more plasma per donation, the testing cost per liter (but not
per donation) for 2024 through 2026 is lower than the medical inflation rate. With 35% of
collections moving to higher volume donations in 2024, the testing cost drops to $23.9
on a per liter basis, despite rising 2.5% (medical inflation rate) on a per donation basis.
This cost decline is 0.5% lower than in 2023. In 2025, the testing cost again drops 0.5% to
$23.8 per liter, as another 35% of donations move to the higher volume. In 2025, testing
cost represents 11.8% of the total cost of collecting plasma.

In 2026, with the transition to larger volume donations nearly complete, the testing cost
rises 1.6% to $24.2 per liter. After 2026, with no benefit of a move to higher volume costs,
the product testing cost returns to its complete medical inflation rate growth of 2.5%, a
rate that this component maintains each year through 2032. In 2027, the cost per liter is
$24.8, rising to $26.7 in 2030 and $28.0 in 2032.

Overall, the growth rate of this component from 2022 to 2032 is 1.8% per year on average,
one of the slowest growth rates and tied with medical supplies/hazardous waste
component. This is entirely due to the fact that the volume in liters will grow faster than
the number of donations as 83% of collections moves from old to new nomograms with
higher volumes. In 2032, product testing represents just 10.7% of the total cost of
collecting plasma, down from 12.2% in 2023.

This forecast assumes no changes in the testing regimen required by the FDA, so the
syphilis test is still required through 2032, for example. If the syphilis test were to be
optional in the future, the cost of this test would be saved (about $1 every 4 months for
each donor) and there would be a slight reduction in the testing costs on a per liter basis
for the year it was removed. Subsequent years would grow 2.5% per year off of the new
cost.

Companies using internal testing processes may be able to slightly lower the average cost
increase, perhaps to 1 or 1.5% per year, but the trend at present is to prioritize
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diversification of testing facilities for risk management purposes. Thus, even large
companies with internal testing facilities are likely going to either contract out a portion
of their tests to third party companies or open a second site for testing to reduce risk.
Both options will be marginally more expensive than the present, so an average cost
increase of 2.5% was chosen for this expenditure (barring donation volume increases).

Soft goods/ Kits/ Disposables Forecast

The cost of the disposable kits, or soft goods, was found to be $18.4 per liter in 2022, or
8.9% of the total cost to collect a liter of plasma. In 2023, it is forecast to rise 3.6% to $19.1
per liter, with most of the cost due to contractual price increases, as just an incremental
3% of collections in 2023 are higher volume nomograms which result in a higher
softgoods price. It represents 9.7% of the total cost to collect plasma in 2023.

The new personalized nomograms are expected to add an average of 8.5% more plasma,
or 70 ml, per donation. This results in an average donation of 900 ml on average for all
donations using the new nomogram. At the present price of $219 per liter in early 2023,
this extra plasma is worth $15.3. Given the disparity in power between the buyers of the
soft goods/devices and the sellers, it is assumed that the benefit of this $15.3 more in
plasma value is distributed 75% to the plasma collector (in terms of extra value for similar
costs) and 25% to the device manufacturer. The latter receives this benefit through higher
soft goods/disposable prices. This results in a $3.83 higher price for the soft goods per
liter that is completed on the new device. On a per donation basis, this is a $4.25 increase
in the softgoods price. Before the announcement of the CSL/Terumo BCT deal in April
2021, the distribution of this plasma value benefit was likely to be more evenly divided
between the collectors and Haemonetics.

By the end of 2022, 14% of the donations were already on the higher volume nomograms
with higher prices for soft goods/disposables, with another 3% more switching over in
2023. By the end of 2023, 17% of devices are on the higher nomogram technologies, and
consequently pay the full $3.83 more per liter for their soft goods/disposables. The
forecast model assumes that 35% more liters collected in 2024 are higher volume
donations, with another 35% in 2025 and 10% more in 2026. After 2026, 97% of the total
donations are using the new devices/software for larger volumes and this percentage
stabilizes throughout the rest of the forecast. See chapter 9 for more details on how the
new device and software technology improves average volumes donated per donation.

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For several reasons, but partly because of this expected cost increase, CSL Plasma
announced in April 2021 that it was collaborating with Terumo BCT to develop a new
plasmapheresis machine that CSL would have more control over its design, features, and
software. The forecast here assumes that CSL Plasma will pay less for its soft
goods/disposables than it previously paid for Haemonetics due to their investment in the
co-development and shared risk of the new machine, so once the transition to Terumo
BCT starts in earnest (forecast assumes second half of 2023), CSL pays about 20% less for
soft goods than it did before. This is a one-time reduction which is mostly evident in 2024
and 2025, as the cost continues to rise 2% more per year afterwards through 2032.

Due to this technology change, the cost component of soft goods/disposables rises more
quickly in 2024 and 2025 than other years of the forecast, with increase of 5.8% in 2023
and 4.6% in 2025, as companies pay $3.83 more per donation when they switch to the
higher volume softgoods. This component is the fastest rising component in both 2024
and 205, and the only one which rises more than 2% in either year. The rise in softgoods
cost in 2024 and 2025 would have been even higher if not for the lower assumed cost for
CSL as it switches in mass to Terumo’s Rika system. In 2024, the softgoods component
rises $1.1 to $20.2 per liter, as it rises to 10.1% of the total cost to collect plasma. In 2025,
it rises to $21.1 per liter, representing 10.5% of the total cost for plasma collection.

It should be noted that individual companies have diverging trends, as CSL Plasma pays
less in 2025 than 2023 for soft goods due to its collaboration with Terumo, while most
other companies pay more, especially those just switching to the new higher volume
donations technologies.

2026 is the last year with some centers still switching to the higher nomograms, and the
softgoods cost rises to $21.9/liter, or a 3.8% increase. It represents 10.5% of the total cost
to collect, the highest level it reaches as afterwards it loses share as it grows more slowly
than the total cost. In 2027, with no more switching to higher volumes and higher priced
softgoods, the softgoods cost rises is just 2.0%, to $22.4 per liter. The contracted increase
in softgoods prices rises at this below medical inflation rate of just 2.0% per year from
2027 through 2032. The softgoods cost is $23.7 per liter in 2030 and $24.7 per liter in
2032, and represents 9.4% of the total cost to collect plasma in the last year of the forecast.
It remains the 5th most expensive component throughout the entire forecast.

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From 2022 to 2032, the average annual cost increase for softgoods is 3.0%, the highest of
any cost component, and above the overall average of 2.4%. However, when looking from
2023 to 2032 (one year less), the growth is similar at 2.9% (vs. 3.2% overall), and is the
second highest growth rate going forward after donor compensation. The high 10 year
growth rate is due to the switch from lower priced, lower volume softgoods sets to higher
volume (and higher priced) softgoods for use on the new devices/software. Without CSL
Plasma’s announcement and shifting to a newer supplier, we estimate the total industry
cost per liter for soft goods would have risen 3.6% per year from 2023 to 2032 (up from
2.9% forecasted here), to finish at $26.3/liter in 2032. This is $1.6 more per liter than
currently forecast and shows the impact of an additional supplier (Terumo) on the market
to lower overall cost and CSL’s favorable rates as the development partner.

Medical Supplies/Hazardous Waste Forecast

The medical supply and hazardous waste cost component per liter was $6.8 per liter in
2022, or 3.3% of the total cost to collect plasma. While the cost of PPE rose dramatically
during the peak of the pandemic, the costs had mostly returned to normal by the end of
2022. The 2023 cost is $6.9 per liter for this category, or 2.7% higher than the previous
year and represents 3.5% of the total cost to collect plasma.

With the pandemic over by 2023, the cost of medical supply and hazardous waste is
expected to return to a normal rate of cost increases. This is forecast to be equivalent to
the base medical inflation rate of 2.5% per year. There are no significant new competitors
in the space, and none forecasted in the future. There are no novel medical innovations
expected in medical supplies and hazardous waste removal that is expected to cause the
prices to deviate from the contracted inflation rates of around 2.5% per year (absent
changes in average volume per donation).

Medical supplies and hazardous waste are almost completely based on the number of
donations, not the number of liters collected. Thus as the companies switch from standard
nomograms to higher volume donations, the cost per liter for these components are
lowered, just like product testing and donor compensation. As a result, in 2024 and 2025,
with more than a third of collections moving to higher volume donations each year, the
cost of medical supplies and hazardous waste falls 0.5% per year. In 2026, it rises 1.6% per
year as there is still some switching to higher volume donations, but less than the prior
two years.

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For the years 2027 through 2032, the forecast predicts the cost of medical supplies and
hazardous waste will grow at this same rate as general medical inflation (2.5% per year).
It reaches $8.1/liter in 2032, or 3.1% of the total cost to collect plasma. From 2022 to 2032,
the growth rate is 1.8% per year on average, or the second slowest component cost
increase along with product testing. Both product testing and medical supplies have the
same per donation costs, and thus it makes sense that both grow at the same rate their
level of competition and lack of premium pricing ability are similar.

Software Forecast
The value and use of software to aid in the optimization of the plasma center operations
has been one of the most efficient ways to control the growth of other costs, such as
staffing costs, by making employees more efficient in the past few years. Due to this, the
value of the software has grown, and so has the cost associated with it, since the donation
software is charged on a per donation basis for collectors not using their own internal
BECS system. While those with their own BECS system would not have this cost, they will
have a cost to maintain and improve upon their software features. This cost would be in
the Center Overhead costs, not a per donation software costs, but it would still exist. For
the forecast, we have put the software donation cost as a separate item here, even though
it may go in the Center Overhead, depending on the company.

As software becomes more critical to the success of plasma collectors, the MRB anticipates
that the largest collectors will move to develop their own software. There are two benefits
for this decision: 1) They can control their software and add new features as needed
(assuming they can develop the software expertise of this), and 2) They are more in control
of their costs, moving from a per donation cost (if buying it from a supplier) to a fixed
overhead costs if developed internally. The downside of developing their own software is
they need to develop the internal software expertise, and plasma companies may struggle
with attracting the right talent and innovating as fast as outside competitors may be able
to, since the latter has a more software focus. See Chapter 10 below for more details on
software for plasma collection.

In 2022, the cost per liter of plasma was $3.5, but from around $1 less than ten years ago.
It is the smallest expenditure of those tracked explicitly here, at just 1.7% of the total cost
to collect plasma. As all collectors shift to a completely paperless environment with the
latest versions of the automated systems, there are expected to be more software

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features, at greater cost, that collection companies use. In 2023, the software cost rises
2.7% to $3.6 per liter, as there is no major shift to internally developed software this year.

In 2024, the software cost rises just 0.4% over the previous year, as CSL moves a portion
of its fleet from Haemonetics per donation software cost to using Terumo’s device with
their own software. This switch continues in 2025, but due to the higher proportion of
switching, the software cost declines by 0.5% ($3.6/liter). The reason for the near 0%
growth, as mentioned in more detail in Chapter 10 below, is that companies like CSL
Plasma and other large collectors are likely going to invest more into their own internal
BECS system, which has upfront costs, but saves on per donation costs over time. Thus,
the average of companies that use their own BECS system and those that pay a per
donation fee to a software provider will not rise as fast in the future due to the lower cost
of the BECS companies in the future.

Software costs rise 1.6% in 2026 over the previous year (to $3.7/liter) and is 2.0% growth
for both 2027 and 2028. Then, as other large companies implement their own solutions,
the rate drops slightly to 1.5% cost growth per year from 2029 to 2032. It is important to
note that the average is weighed down by those that develop their own software, while
smaller collectors which continue to use device manufacturer’s standard software will see
their costs rise at a faster pace at around 2.5% per year.

By the end of the forecast, the software cost is just $4.0/liter, or 1.5% of the total cost. The
2022-2032 growth rate is 1.4% per year on average, the slowest growth of any component
to collect plasma, and slower than the total average growth rate of 2.4%. The slower
growth is due to companies insourcing more of the functions to save on costs as it
becomes more critical to their business for efficiency, tracking and planning purposes.
Still, software costs rise over the forecast period despite insourcing efforts as companies
invest more in it because its value is clear in making other areas more efficient and holding
down other costs.

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8. Donation Process

The process to collect source plasma in the United States is fairly uniform across all
collection companies as the process is governed by the FDA and other regulatory
authorities as previously outlined. There are two main donor flows that dictate the process
that a donor goes through when donating at a center.

The first is the applicant, or new donor process. An Applicant Donor is someone that has
never donated plasma before, has not donated in over a year, or has never donated with
a particular collection center before or in the within the last 12 months. A donor is
considered an applicant donor up until a collection center receives two negative test
results for the donor. An applicant donor only goes through a different collection process
the first time they donate and if there has been a six-month lag since the donor’s last visit.
A repeat donor is a donor that has donated with the same collection company in the last
12 months. Plasma donors in the United States can donate up to 104 times per year (twice
per week). Donors cannot donate more than twice in a seven-day period and must wait
at least one day between donations (cannot donate on successive days). Each collector
has a different definition of their donor week though most go Monday through Sunday.
A plasma unit has a 10-year shelf life though fractionators prefer to use the product within
2 years.

Donation Process Steps

A potential donor entering the plasma center is goes through one of two options,
depending on whether he/she is an “Applicant” or a ”Repeat” donor:

Reception:

For an applicant donor:

Typically, a signage instructs the new donor to go up to the front desk where the
receptionist will verify all required documentation: A photo ID that has a donor’s date of
birth and signature, a Social security or an immigration card, and a proof of address. It
must be a permanent address - not a shelter, hotel, or motel, and there is a distance limit
to the center if it is IQPP-certified. Once the donor identification has been completed,
he/she will fill out a Donor History Questionnaire comprising about fifty questions
covering past and present health history, possible exposure to certain infectious diseases
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such as HIV and hepatitis. The questionnaire is generally filled out at a kiosk, using a tablet.
This information will later be reviewed during the Physical Examination later in the
process.

For a repeat donor:

At most centers, when repeat donors arrive, they can proceed right to the kiosks with the
tablets without interacting with the receptionist. At the kiosk, they will fill out an
abbreviated version of the questionnaire (~18 questions). Increasingly, collection
companies are allowing, or even requiring this to be filled out on a mobile device prior to
arriving at the center. Others require donors to fill everything out onsite. The advantage
of filling out the questionnaire ahead of time is that it speeds up the processing time as
it eliminates a potential step that must be done in the center and frees up capacity. This
amounts to a 10-15 minute saving is that is generally how long it takes for donors to fill
out the questionnaire when you factor in waiting for a kiosk. The drawback is that the
collection center cannot see the donor filling out the form and verify if he/she is being
coached in their answers. If the system identifies any flags, they must be resolved before
the donor proceeds to the donation process.

Physical Examination (Only for Applicant Donors and every year for all donors):
During a donor’s first visit and at least every year thereafter for all donors, a physical exam
will be administered by a physician or physician substitute (Phys Sub) to assess the donors’
health and eligibility, along with a blood test. The required qualifications for Phys Subs
vary and depend on the location of the center as each state has a slightly different
requirement as to the training of that individual. In some states, a Registered Nurse (RN)
is required, while others require a Bachelor of Science in Nursing (BSN) or Licensed
Practical Nurse (LPN). Some states even allow an Emergency Medical Technician (EMT) to
function in that role. If a donor has not donated in 6 months, they will be required to have
another physical exam before donating during which an informed consent must be
obtained. This consent, administered by a licensed physician clearly explains the potential
hazards of the plasmapheresis procedure, both manual and automated, including
possible adverse reactions to the donor. Video or audiotapes may be used to obtain
informed consent provided the donor has an opportunity to ask questions. The consent
enables the center to determine the donor understands the process. A new donor will
also go through the general donor suitability and screening process where vital signs are
taken, and it must be ensured they are within an acceptable range, as dictated by the

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company’s SOPs. The screening process also includes weight, temperature, blood
pressure, Hemoglobin/Hematocrit, pulse rate, and total serum protein.

Donor Suitability/Screening:
Repeat donors only go through the last part of the physical exam that new donors go
through, which is vital signs, weight, temperature, blood pressure,
Hemoglobin/Hematocrit, pulse rate, and total serum protein. In order to be eligible to
donate, donors must be in an acceptable range for each of the above. For example, the
FDA states that Hemoglobin, or Hematocrit must be equal to or greater than 12.5
g/100mL of blood, or if the microhematocrit method is used, a value of 38% is equivalent
to 12.5 g/100 mL. Another example is the blood pressure which must be within a “normal
range”. A systolic range of 90-180 mm/Hg and diastolic range of 50-100 mm/Hg are
considered normal limits. Some donors with blood pressures outside this range may be
acceptable, but only with a physician's or Phys Subs approval and consistent with the
collector’s SOP’s. A final example is the donor’s temperature, which must not exceed 99.5
degrees Fahrenheit for him/her to donate. More information on these requirements can
be found in the Code of Federal Regulations (CFR) Title 21, Part 630. Citation:
21CFR630.10.

Phlebotomy:
This is when the actual donation occurs. The phlebotomist sticks the donor and connects
them to an apheresis machine (see device section later in the report). During that time,
the donor is on the bed either waiting to be stuck, donating, or waiting to be disconnected
from the machine. A phlebotomist’s training or education requirements are dictated by
the center’s state regulations and by the company’s SOPs.

Laboratory:
After the phlebotomy, the donor’s plasma bag or bottle is transferred to the laboratory,
which is generally adjacent to the freezer.

The first operation carried out by the lab technician is to check whether the donation is
lipemic. A unit that is considered lipemic if it has a high fat content which will interfere
with the fractionation process. If it does, the unit is not usable and will be destroyed. A
unit is determined to be lipemic through a visual test whereby the lab technician checks
whether a black line can be seen through the bottle. If a unit is found to be lipemic, the
donor usually will not receive compensation for the time they spent donating that day.
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Donors are encouraged to eat healthy foods and to limit fat intake the day before and on
the day of their donation. Lipemic units are not accepted because they can affect the
fractionation process and may cause higher than normal false positives in sample testing
for diseases.

If a unit is not lipemic, samples will be drawn based on the donation requirements.
New/applicant donors must be tested for Syphilis, HIV, Hepatitis (HAV,HBV, HCV) and
have their protein and hemoglobin levels tested. This additional level of testing is required
every four months. The SPEP/SPE test measures total protein levels. These donors also
have the routine VMT and NAT tests conducted to test for HIV, Hepatitis (A, B, and C), and
Parvovirus B19. For repeat donors, VMT and NAT tests are required for HIV, Hepatitis (A,
B, and C) and Parvovirus B19 on every plasma donation they make. For the Serum Protein
Electrophoresis (SPEP or SPE) test, the phlebotomist draws a tube of whole blood at the
start of the donation. Once the sample reaches the lab, a technician must allow the sample
to sit and coagulate. The lab technician then puts the sample in a centrifuge, spins it down,
and pipets off the serum to send to the testing vendor. See chapter 11 on testing for
further details.

After samples are drawn, the plasma and samples must be placed in a freezer in a timely
manner and their core temperature brought to at least -20 degrees Celsius within 24
hours.

The lab is fully involved in the inventory management and shipment procedures of the
collected plasma. Units are closely monitored and managed in the freezer according to
the SOP’s. The lab makes sure that each unit that is ready to be sent to the manufacturing
process is released and packed correctly.

Compensation:
In most centers, donors are compensated electronically with funds loaded on debit cards
immediately after their donation. Some centers still pay donors in cash, but this practice
is declining. Some incentives are not paid right away if they relate to a bonus program;
for example the “buddy” or “referral” bonus, is a referral fee for bringing in a new donor
to a center. This is usually paid after the new donor successfully completes their first or
second donation (depending on the collector).

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Average Process Times
When considering the plasma collection process, it is important to consider how long it
takes for a donor to get through the process. This provides a unique insight into how
efficient a center is, particularly when coupled with center production numbers and turn
rates.

When reading the above process many people assume that a donor goes quickly from
one stage to another. In practice, most donors must wait a significant amount of time
between steps, depending on how busy a center is. There is also a high variance between
donor times depending on when a donor is in the center. Some of this is just the effect of
scheduling as mornings before work and evenings after work are busier. Staffing issues
(employees out sick or understaffed) can cause delays. This has been a much bigger
problem since the start of the COVID-19 pandemic. For example, if a nurse is sick, the
ability for the center to receive new donors will go down, unless there is redundancy in
staffing or someone else can cover the shift. In addition, the structure and layout of the
center may affect the donors’ wait times. Bottlenecks commonly occur in the process
impeding the flow of donors, which vary depending on the center and its setup.
Sometimes there might not be enough booths, or they are always full thereby making it
tough to get donors onto the donation floor quickly. Other times beds on the donor floor
are all full and donors must wait to get into the phlebotomy section.

Average Donation times (Door in/Door out) for new and repeat donors
Donor Type Average Time (min) Range (min)
New/Applicant 170 140-190
Repeat Donor 98 80-105

Average door in/door out times for Applicant donors:

Overall, the average donation time for applicant/new donors is 170 minutes (2 hours and
50 minutes) with a low of 140 minutes (2 hours and 20 minutes) and a high of 190 minutes
(3 hours and 10 minutes). This is significantly longer than the averages at the start of the
pandemic in 2020 of 125 minutes (2 hours and 5 minutes). These average donation times
in 2020 were consistently lower than the numbers seen before the COVID-19 pandemic,
as fewer donors allowed the donors that remained to move through the process faster.

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However, beginning the second half of 2021 donation times began to quickly rise due to
staffing shortages as well as process changes due to the COVID-19 pandemic. The staffing
shortages were particularly acute for Phy-Subs which severely constrained collectors
abilities to give physicals to applicant donors. While staffing challenges have gotten better
as of early 2023, the staffing situation is still worse than before the pandemic and the
current collection times are about 10% above where they were before the pandemic.
Among the reasons for the variability of donation time are:

1) Whether the center is using an automated BECS system, along with its specific
capabilities, which can speed donors through the process. The better the system, the
faster the process.

2) The staffing of the center. If there are not enough Phys Subs, or they are inexperienced,
then the donor processing time will go up, sometimes significantly.

3) The layout of the center and overall general business/volume of the center will affect
donation times. If a center does not have enough private rooms to conduct physical
exams, the ability to process a high number of applicant donors is limited. In addition, if
a center is busy all the time, then there will be more bottlenecks and it will take longer to
get an applicant donor through the process.

Average door in/door out times for Repeat donors:

The current average donation time for repeat donors is 98 minutes (1 hour and 38 minutes
with a low of 80 minutes (1 hour and 20 minutes) and a high of 105 minutes (1 hour and
45 minutes). This is up from an average of 87 minutes at the end of 2020. Similar to
applicant donors, these average donation times in 2020 are lower than the numbers seen
before the COVID-19 pandemic, for reasons similar to those listed for applicant donors
(more donors and less staffing). As staffing issues surfaced this pushed back up average
donations time. That said, it rose at a lower rate than for applicant donors. The reasons
for this are first that while all positions were difficult to hire for over 2021 and 2022, Phys
Subs were the hardest openings to fill while other roles were easier to find suitable people.
Second, there were fewer repeat donors coming into the centers and there is less of an
impediment for them to donate since they do not have to get a physical each time they
arrive to donate.

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The reasons for variability of donation times for repeat donors are similar to those
identified for applicant donors. First, if the collector is using an automated BECS system
this can speed donors through the process. The better/more advanced a system is the
faster the process. The second piece is the staffing of the Center, though Phys Subs are
not the primary job title in this issue, as mentioned. If there are not enough medical
assistants to move donors through screening, wait times in reception will creep up.
Similarly, if there are not enough phlebotomists on the donor floor, there will be a bottle
neck on the donor floor and will increase donation times. Finally, the layout of the center
and overall general business/volume of the center will affect donation times as well. If a
center is poorly designed without enough donor screening booths, it will take longer for
donors to make it past reception onto the donor floor. If the donor floor is too small,
donors will need to wait to make it onto the donor floor, thus increasing donation times.
From a volume perspective, if the center is very busy, there will be bottlenecks all along
the process thus increasing average turn rates, but donation times will also go up.

It is unclear how the shift to smaller centers with collectors focusing on cost efficiency will
impact donation times. In general, if all centers are busy, there will be wait times, especially
during the surge times, increasing total donation time. It will be interesting to see how
centers are designed going forward to handle surges but remove overall capacity to fit
into a much smaller footprint.

General schedule considerations

Managing the flow of donors in the center through the donation process is one of the
biggest challenges in the plasma collections business. As discussed, centers see surges
of foot traffic usually with the busiest times being in the morning when the center first
opens or later in the afternoon/evening after typical work ours. Collection companies have
approached solutions to this problem in several different ways. Beyond the physical
design of the center, which can help accommodate surges in the center, managing the
flow of donors into the center and adequately staffing the center are key when thinking
about donor flow.

Scheduling
Managing the flow of donors in the center through the donation process is one of the
main challenges of the plasma collection business. One of the biggest operational
differentiators between collectors is how they manage the traffic of donors into the center.
Some companies only allow donors to walk-in (no appointments), others schedule every
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appointment without any walk-ins allowed, while others use a mix of both procedures.
There is a wide distribution across the centers in the US. For example, BioLlife (Takeda)
has always scheduled all donors and recently Biomat (Grifols) has moved in that direction
for some of their centers. Meanwhile, CSL is strictly walk-in only (no appointments).

The advantage of scheduling donors is that the donor door in/out times are shorter given
the controlled flow of donors into the center. The downside is a risk of lower production
if donors do not show up for their appointments. It also requires the collector to
constantly manage donors changing their scheduled times. While software/technology
has helped to address this last problem, it is still an issue.

The advantage of walk-in only is a higher likelihood that a center will be full throughout
the day. Walk-ins also have the effect of managing the expectations of donors. If it is first
come, first serve, donors understand that they may have to wait, whereas in a scheduled
only center, if there is any delay and donors cannot be accommodated at their appointed
time, they may be upset. The downside of walk-in only is possible long wait times between
the various steps of the process unless a donor comes in when the center is just opening
or when it less busy, typically in the afternoon. Donors have no way of knowing how busy
the center is until they arrive and there is no set expectation of how long it will take to
get through the process. This can dissuade donors from coming in.

There is a hybrid approach where a center schedules a certain type of donor but let other
donors just walk-in. For example, some companies, such as BPL, schedule all donations
when they first open a new center and then as it grows past a certain point, appointments
are tapered off and stopped and only walk-ins are accepted. Another approach is to
schedule only new donors as this facilitates efficient physician substitute staffing.
Staffing
It is important to understand there needs to be enough employees in each section of the
donation flow to avoid disruptions. This is surprisingly difficult to achieve given the
specialized nature of plasma collection and how particular roles in the center are critical
in the process. For example, even if there are enough machines to accommodate a certain
number of donors, an insufficient number of phlebotomists to work the bays, or a lack of
nurses to conduct physicals on new and annual returning donors, will result in some of
the donors coming in the door that will not be able to be accommodated.

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Employee considerations:
Beyond location, the employees of plasma collection centers are often the main
differentiating factor between a successful center and one that consistently
underperforms. Human resources and human capital are two of the most challenging
components of operating a plasma collection business. While all center operations are
described in extensive detail in the SOP’s, managing the staff is especially challenging.
Other medical employment environments have a significant degree of required training
but given the plasma industry’s audit requirements, it is even more difficult in a center.
Plasma quality systems are inherently structured in a way that constantly gives negative
feedback (an employee incorrectly did x, by not following the SOP) while positive
feedback is much more difficult to give. The quality systems of most companies are built
to find mistakes by employees and take corrective action. This is not the case in many
other medical offices or hospital environments. For example, FDA regulations specify that
before inserting the needle into a donor, a phlebotomist must sterilize the venipuncture
site with a 60 second arm scrub. Many times, during a regulatory or internal audit,
phlebotomists will be watched from afar and if they sterilize for only 59 seconds, they are
found to be in non-compliance with the SOP. This is emblematic of the environment
prevailing in a plasma center among employers and employees. It negatively affects their
morale, and the center’s productivity.

Hiring:
Finding enough talent to fully staff the center is a constant struggle for all collectors. This
was made even harder during and after the COVID-19 pandemic with the burn-out of
many Phys Subs coupled with a lower labor participation rate given government stimulus.
Many factors can affect this issue, including the economic environment and the level of
education of the population around the center. While it may be cheaper to employ
individuals in an area with a smaller population, the pool of talent is smaller. A broader
trend across the country is the expansion of the healthcare workforce. While it produces
good candidates for all functional areas of a plasma center, this is against a backdrop of
expanded demand for qualified healthcare professionals across the board as most
medical fields are expanding. As a result, competition can be fierce when recruiting for
many center positions. It is also important to understand that a job in a doctor’s office or
hospital will generally be less stressful than its equivalent in a plasma center, and the
salaries are comparable. To illustrate, the volume of individuals (donors) handled by a
phlebotomist in a plasma center will be significantly higher than the number of patients
processed by the same phlebotomist at a doctor's office. Staff retention is also affected if
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the labor market is robust, and an employee is more likely to leave their job if they feel
they can get a better job elsewhere. Some large collectors, such as Grifols and CSL Plasma
have adopted a policy of training employees without any prior experience in healthcare
in order to be less reliant on the current skillset of the local population or on the
availability of training programs outside of the company.

Training:
Since it is important for both donor and plasma safety that the SOP’s be followed to the
letter, a significant amount of training is required. Some organizations like Grifols have
established their own “University” in one location to train their incoming staff across their
fleet of plasma collection centers. Others have automated the process and moved the
training process online for many introductory courses. It is a significant investment by a
company to hire and train an employee. In some cases, a new staff member is hired, but
is not functioning in their role independently for 4-6 weeks. This is a burden to staffing
costs of the center and makes hiring lead time a critical focus for regional center
management and HR departments across the industry.

Training prior to being hired:

Depending on the job title of the employee in the center, there is a great deal of training
required to get the qualifications that allow an employee to even be a candidate for a
particular job, as discussed in additional detail when identifying the different roles within
a center.

Retention:
Retention is a constant challenge when trying to keep a center fully staffed up. This is a
function of the local area but also the macro environment for healthcare jobs in the US.
Since many plasma employees must be trained, an employer has an inherent incentive to
make the investment in the training of an employee pay off for the company. This is a
struggle faced by all collectors. As with many collection metrics, there is high variability
across the industry depending on location and company. However, current average
retention rates in the country are only 15% on an annual basis (meaning only 15% of staff
will be at the center a year later and 85% of the staff will have left for other opportunities).
This is much lower than 2020 when it was 35%. There are even some collectors that have
negative retention rates, meaning that staff members don’t even last a full year, on
average. These metrics are differentiated by job title as well. For the higher paid positions

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such as Nurses and Center Management, the retention rate is higher than for
phlebotomists and medical assistants.

Key Plasma Collection Center Roles

Center Management:
Management is unquestionably the most important role in the center. If a center has a
good Center Manager (CM) with capable Assistant Managers that do excellent work, there
is a high likelihood that the center will perform above average when compared with a
similar center. The CM is the maestro that makes all the parts of the machine work well
together. Across many companies, Center Managers have the broad authority to hire and
fire staff and have some P&L responsibility. The extent to which Center Management is
aware of the financial metrics of the center is highly variable across collection companies.
Some collectors give a great deal of visibility into the financials of the center to encourage
management awareness of what it takes for a center to make money, while others give
no visibility whatsoever and hand down goals/targets from headquarters. Local decision
making is usually encouraged but more strategic actions such as purchasing decisions or
donor incentive rate changes are never done at the center level.

This is one of the hardest positions to recruit for. Not only is there a requirement that the
CM have a certain measure of experience in plasma, they also must have all the other
management skills necessary to run a large, complex team in a highly regulated
environment. The educational requirements for a Center Manager vary across companies
and regions. While a college degree is preferable there are many outstanding center
managers who do not have a formal degree but have worked their way up through a
plasma center working in a variety of roles. Many times, these are the most effective center
leaders. It is not uncommon for a center manager to earn more than $100,000 a year
depending on location and qualifications.

Quality Management:
Quality is the internal audit function of a center and is the check and balance to the center
management to make sure that everything is operating in accordance with the SOP’s.
They will be part of any external audits and will conduct their own internal audits. Each
company approaches the quality function differently: some have a small quality team but
a robust corporate audit function that visits into the centers, and others have the opposite.

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Physician Substitutes:
Physician substitutes (Phys Subs) are the second most important role in the Center. They
are called physician substitutes because they can substitute for a physician to make
judgements on the suitability of donors in a center. They also spearhead any response to
donor reactions within the center. Without physician substitutes a Center would not be
able to operate. They are the ones that assess whether or not a donor qualifies to donate
based on the physical and mental health of each donor. The required qualifications for
Phys subs vary depending on the location of the center as each state has a slightly
different requirement as to the training of that individual. In some states a Registered
Nurse is required, while others only require a Licensed Practical Nurse (LPN). Some states
even allow an Emergency Medical Technician (EMT) to function in that role. This person
directly communicates with the medical doctor that operates as the Medical Director (MD)
of the Center. Any open questions filter up to the MD if there is any ambiguity. Phys subs
perform all physical exams of new and repeat annual donors, meaning they see all the
new donors (the life blood of any center). At least one Phys sub is required to operate a
center, but several will be needed to see new donors, conduct physicals, do all required
paperwork, and make decisions around donor eligibility. The challenging plasma center
environment along with the high level of training and education of these employees
makes it difficult to retain Phys subs. This role takes the longest to fully train.

Phlebotomists:
Phlebotomists are the ones who insert the needle in a donor and manage the donation
floor. Their sense of urgency and competency on the floor can affect everything from how
fast a donor moves through the process to punture reaction rates. Ideally it is important
that each phlebotomist hits the vein on the first try and does not have a lot of re-sticks. It
is ideal when every phlebotomist is acutely aware of where each donor is in the process
so once a procedure/donation is complete the donor gets disconnected from the device
almost immediately. This helps both turn the bed faster so the next donor can get on the
machine as well as gives the donor a better experience so that they aren’t sitting there
waiting to be disconnected for a period of time. The general assumption is that there
should be one phlebotomist for every six donors. That works a lot of the time, but it is
much better when you have one phlebotomist for every five donors, as this increases
throughput times. In terms of training, many centers require some sort of formal
certification from a medical training or other vocational school before bringing
phlebotomists onboard. Some of the larger players will find individuals themselves and
train them from scratch through their internal training programs. Finally, a donor’s
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experience is driven by their experience in phlebotomy. If the phlebotomist is friendly,
puts the donor at ease, and does not require multiple sticks, this reinforces a donor’s good
experience in the center. Conversely, even if the beginning of the donation process was
quick, smooth, and easy, the staff was courteous and welcoming to a donor, a bad
experience during the phlebotomy can negate all of that previous goodwill, and result in
a donor reluctance to ever return to that center.

Medical Technicians / Medical Assistants:

These employees work at the reception and in the screening booths. They typically do not
have specialized training beforehand, and often do not have a college degree. While they
do not dictate whether a donor can donate, they certainly contribute to the donors’ overall
experience and if mistakes are made or they are inefficient, it could cause significant
problems. Much of the data they collect contributes to whether or not a donor can donate.
For example, if a med-tech reads a hematocrit test incorrectly and says a donor is not
eligible to donate, than that error resulted in a lost donation for the day. A sense of
urgency is also a key consideration, because screening/reception is one of the choke
points within a centers flow. If there is a lackadaisical attitude of the employee, this will
constrain the flow of donors through the center and lower efficiency. Med techs must be
trained as specified in the SOP’s although their training is shorter and does not require as
large an investment as for other staff members.

Lab technicians:
Laboratory technicians are tasked with handling the samples drawn from each donation
as well as inventory and shipment management. After a donation, plasma samples must
be drawn from the bottle or bag and sent for testing. The lab technician must put the
bottle or bag of plasma in the freezer within 30 minutes of collection otherwise it may
have to be destroyed (depending on each individual collectors SOP). The lab tech is also
responsible for destroying the donations that are not fit to be sold. If a unit that was
supposed to be destroyed finds its way into a shipment, it may have wide-ranging
implications for the Center. The lab tech’s job also involves a lot of manual labor and
movement. When plasma bottles are packed in a case which is made of up 15 bottles, it
can weigh over 30 pounds. Other tasks require moving around the plasma in the freezer
to organize inventory and to prepare for shipments which usually happen every week or
every other week. This manual labor also takes place in the freezer which is kept at around
minus 20-30 degrees Celsius. due to these manual tasks, person must be in good physical
condition to work in this role.
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Importance of cross training employees:
Cross training is a tool used by most centers to help protect against staff shortages as
outlined above. If a medical assistant or a phlebotomist is trained in the lab or screening
area, it provides flexibility if there are a number of staff who don’t show up for any reasons
on a particular day. While this requires some investment up front in terms of timing and
“nonproductive” training expenditure, it can save a collector from costly shutdowns or
lowered productivity.

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9. Collection Devices

One of the most important components and drivers of the plasma collection industry are
the devices that are used to collect the plasma from donors. It is essential to understand
the collections devices space, and its role in the process and value chain. In this section,
the major players are covered and compared. Users of the devices and the manufacturers
have been interviewed to offer insights and comparisons of the various devices currently
on the market.

Technological Approach to Apheresis

Apheresis is defined as a medical technology in which the whole blood of a person is
passed through an apparatus that separates out blood components and returns the
remainder to circulation in the individual’s body. In plasmapheresis, whole blood is
removed from the body, plasma is then separated out using a collection device and then
the remaining blood cells and platelets are reintroduced into the body along with
anticoagulant solution into the same needle and vein it was earlier withdrawn from. Since
the red blood cells and platelets which take longer to reconstitute go back into the body,
this enables more frequent plasma donation (up to 104 times per year in the United
States) when compared with whole blood donation (usually just 3-6 times per year). There
are two main mechanisms used for plasmapheresis. The first is filtration which is used by
Fresenius Kabi. The second is centrifugal force separation which is used by Haemonetics
and Terumo BCT.

Haemonetics Fresenius Kabi Terumo

Overall Total Market Share 69% 30% <1%
Devices PCS2 NexSys PCS Aurora Aurora XI Rika
Release Year 1994 2018 2012 2018 2022
Donation Time (880ml of Plasma)* 45 Mins 42 Mins** 52 Mins 38 Mins 34 Mins***

Notes on above:
*These times do not include any personalized nomogram and reflect the time to collect
880ml of total plasma.
**This does not include developments that are discussed below that may impact this time.
***The Rika device has not been rolled out widely across an entire fleet of donations
centers. The time listed here was seen in a clinical study and in market, but it is a small
sample size.

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Haemonetics

The company was founded in Braintree, Massachusetts by Dr. Jack Latham in the 1970s.
Today, the company’s global headquarters are in downtown Boston and has offices
located in 16 countries with 3,000+ employees. Revenues are ~$1.1B annually across all
business units. The plasma unit has been the main driver of growth in the company over
the last 10 years.

Haemonetics uses centrifugal force separation as its core plasmapheresis technology.

More specifically, it uses the Intermittent Flow Centrifugation method which works in
cycles, taking blood, spinning/processing it and then giving back the unused parts to the
donor. The main advantage of a cycled approach is a single venipuncture site as opposed
to continuous centrifugation which would require two needles and two venipuncture sites.
Obviously, a single venipuncture site is highly preferable for donors. To stop the blood
from coagulating, anticoagulant is automatically mixed with the blood as it is pumped
from the body into the apheresis machine.

Market Share: Haemonetics was one of the first players in the industry and the company
has invested in expanding their fleet of capital assets over the years. This has given the
business a significant market share advantage when compared with competitors. At
present, in the United States, Haemonetics has a market share of 69% for collection
devices. This is a 6% decrease from when this report was released in 2021 (when it was
75%). Less than 1% of this decrease is due to the start of CSL’s shift to Terumo’s Rika
device, and the remaining 5% went to Fresenius. This is forecast to decrease to 30% –by
2026 as CSL completely shifts to Terumo BCT devices.

Business Model and Approach to Market: Haemonetics uses a “Razor blade” business
model approach to the market. The vast majority of customers do not pay for the machine
outright but pay for the soft goods/kits as defined previously in this report (Bowl, harness,
tubing, and bottle along with anticoagulant solution and/or saline). In addition, the
customers agree that they will maintain a certain level of utilization on each machine. This
is to protect Haemonetics from having to manufacture and distribute a whole fleet of
machines and then not make enough revenue to support the number of machines
because the centers are not utilizing the machines efficiently. This “placement” business
model is a win-win proposition since it limits the capex investment required to open new

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centers while at the same time giving Haemonetics a solid recurring revenue stream with
a floor based on the minimum utilization rates in each purchase contract.

In general, Haemonetics operates more like the company Apple where hardware and
software work in a closed system and for the most part cannot be connected to most
other systems/devices that are not offered by Haemonetics. The software offering from
Haemonetics will be covered in further detail in the software chapter (10).

Utilization rate:
Utilization rates track closely with “Bed turn rates” mentioned in chapter 2. The pure turn
rate metric should be the number of times a bed has someone donating plasma in a day
when a center is open. In order to normalize the metric when billing clients across the
industry, Haemonetics wanted to find the best way to normalize this so that it fits with
centers that have varied schedules. Most centers are open 6-7 days per week but
especially in the beginning, many centers only open limited hours when they first open.
In that case it is difficult to obtain a measure on a 6 or 7 day per week metric. Haemonetics
decided to calculate the minimum utilization rates per week using a 5 day per week
schedule. In addition, the devices in a center are generally aggregated to calculate the
number. For example, if a center has 50 machines and in a given week it collected 2,100
units of plasma but it is open seven days per week; a simple bed turn metric would be 6
(2,100 collections, divided by 7 days, divided by 50 machines = 6). For utilization
rate/Haemonetics purposes, the bed turn rate would be 8.4 (2,100 collections divided by
5 days, divided by 50 machines = 8.4).

HAE Devices:
Haemonetics has two apheresis devices that are currently deployed commercially in the
United States. The first is the PCS2 device. This has been the workhorse of Haemonetics
and the industry since its introduction in 1992. In 2018, Haemonetics released its new
plasmapheresis device called the NexSys PCS. Since that time, all HAE customers have
shifted to the new NexSys device with CSL being the big exception as they wait to switch
their fleet to the new Terumo BCT Rika device. It should be noted that CSL had originally
planned to phase out the Haemonetics devices earlier but now have a contract
arrangement with Haemonetics through 2025. Once CSL shifts away from the device, the
PCS2 is set to be sunset and will no longer be commercially available in the United States
though it will remain active in other parts of the world. Information around both devices
are described below, starting with PCS2:
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PCS2
This device was widely released in 1994 and has been in continuous use through today
across a large swatch of the industry, though it is now being replaced by the NexSys.
Hundreds of millions of collections have been made on this device since it was launched.
The PCS2 uses the centrifugation technology to separate the plasma from whole blood.
The device itself has a reputation of being a robust, rugged well tested device. A number
of improvements have been made to the device from a software perspective since it was
first deployed, due to the significant technological advances of the last 30 years. The most
important development was the “bi-directional” upgrade where the PCS2 could receive
and provide information to an automated software system, the importance of which is
detailed in the next chapter. In short, the main benefit of the bidirectional system is to
pre-program the device based on the specific donor profile. In particular, setting the
nomogram (how much plasma that will be collected) is automatically programmed into
the machine instead of a phlebotomist having to enter that information manually, with
the potential of entering it incorrectly due to human error.

Donation Timing:
The average needle in/needle out time for a donation on the PCS2 device for an 880ml
donation is 45 minutes. This is faster than the competitive Aurora machine from Fresenius
Kabi which will be discussed in the next section.

Additional information:
From a maintenance perspective, while it varies across the industry, most companies do
their own maintenance when it comes to their Haemonetics devices. This is done by
sending selected staff to be trained on how to maintain and troubleshoot a HAE
collections device. The benefit of this is that center staff can respond quickly to any
problem (they are already there), and it can be cheaper than having to hire outside experts
or pay more to Haemonetics to manage the fleet of devices. The downside of this is it
exacerbates the larger problem of employee retention that exists across the industry. It
leaves a collector open to the risk that if the HAE trained maintenance techs quit their
roles (or are sick, etc.), this could result in a capacity issue for collector. If devices break
down and no one can fix them, fewer devices will be available for use on the donor floor.
Many centers struggle to have the right people to do the maintenance. A big challenge
for Haemonetics is making sure there are enough trained collection center employees in

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each location, with a space that is adequate for them to work on (take apart) and fix the
devices. It is also important that Haemonetics have good resources available over the
phone that can help collection center employees troubleshoot and fix any problems that
arise with the device.

NexSys PCS
This is Haemonetics’ newest collection device and was released to the market for
commercial use in late 2018. This next-generation collection device uses much of the
same base hardware as a PCS2, including using its centrifugation technology. The bottle
and much of the soft goods are the same as well. The main benefits of the NexSys PCS as
outlined by Haemonetics are to increase productivity, improve quality and compliance,
increase yield, and strengthen donor relationships. To increased productivity, there is
bidirectional connectivity between the machine and if the collector is using a Haemonetics
automated system, it eliminates the use of any handheld devices. The handheld devices
were used prior to bidirectional communication being installed in the PCS2 or continue
to be used if a collector is using a non-Haemonetics BECS system. The handheld devices
enable the operator (phlebotomist), to access information about the donor including the
correct draw volume based on the information collected during the screening step of the
process. With the handheld, the operator still needs to enter the draw volume into the
device, which leaves the process open to human data entry errors.

The handheld device is also another device in the center that could break, be lost, have
connection issues, or otherwise impede the process. From a quality and compliance
perspective, the automatic entry of information to the machine from the screening earlier
in the process virtually eliminates the risk of a user entry error which previously caused
over/under volume draws, among other errors. An overdraw is when more plasma is
collected from a donor beyond the FDA allowed nomogram. This is a big donor safety
issue that can cause the center to have regulatory issues and can also cause the deferral
of the donor. An under-draw is when the center collects under the FDA defined
nomogram based on a donors weight. While this is not a donor safety issue, it does forego
some plasma that a collector could have captured if there had not been any entry error.

With the NexSys PCS, there is also integrated documentation and guided workflows
during the procedure which help ensure compliance protocols are met. Finally, in
strengthening donor relationships, streamlined processes aim to minimize wait times.
Physically there is integrated beacon lighting designed to improve staff responsiveness,
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reducing the time donors wait to disconnect. For example, the beacon light turns yellow
when a donation is completed thus providing a visual cue to the phlebotomist that the
donor is ready to be disconnected from the device. On the PCS2, the phlebotomist would
need to check each donors device to see if the procedure was completed. The NexSys is
also a far quieter machine, and a donor information display on the side of the machine
gives information about the donation to the donor. The NexSys system also allows for the
possibility of more plasma to be donated, and this important benefit is covered in the YES
technology and Persona sections below.

Aside from CSL, all Haemonetics customers have shifted from the PCS2 to the NexSys
device over the last two years. Based on our interviews, most customers shifted to the
new device in order to improve their collection time (42 vs 45 minutes) across their fleet
as well as to have access to the yield improvements that the newest system offers (more
on that below in the Persona section). Originally there was hesitance to swap out the
machines due to softgoods pricing changes and there not being as much data around
NexSys’ use of YES technology and Persona. For many of Haemonetics customers, these
concerns were addressed with additional data and experience using the new product.

In April 2021, in a blow to Haemonetics, CSL Plasma announced in that it was collaborating
with Terumo BCT to develop a new plasmapheresis machine that CSL would exclusively
license in the United States for a short period of time. This eliminates 31% of the overall
potential market for Haemonetics in the United States and complicated the company’s
efforts to negotiate NexSys PCS and Persona contracts with the other collectors. As
Haemonetics moved forward in the price negotiations, the remaining collectors (outside
of CSL), knew that Haemonetics needed to lock in customers to shore up confidence in
the company’s growth prospects. This led in some cases to price concessions for the
collectors. As is discussed in the Chapter 7 of this report, it is anticipated that Haemonetics
and collectors will now split the value of the additional volume (worth $15.3 in 2023) from
Persona/YES technology with 75% of the value going to collectors, and 25% going to
Haemonetics. The collection company gets 75% of the value through higher efficiency
and lower per liter costs, while Haemonetics gets its 25% of value largely through higher
soft goods/disposable costs. The current 75%/25% assumption is a significant deviation
from the 50/50 split that Haemonetics had hoped for when the NexSys PCS was first
launched. From an uptake perspective, roughly 15% of the total industry has switched to
the higher yield Persona product by the end of 2022, up from 5% at the end of 2021. In

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2023, there is no significant shift over, so the expectation is that 15% of collections in 2023
will be the higher yield product.

Since CSL’s announcement, Haemonetics has moved quickly to get as much benefit from
their first mover advantage in being the first company to offer an additional yield
compared with the 1992 nomogram (more detail on this below). They have been
successful in getting the smaller collectors and one large company (Octapharma) to utilize
Persona. This totals 15% of the total market as of the end of 2022. Fresenius has already
said they plan on rolling out similar product, first the Optimized Nomogram that is
analogous to Haemonetics YES technology, along with individualized nomograms. In
addition, Terumo BCT has announced an FDA study and while it does not expressly
identify additional yield as the purpose of the study, it is the most likely reason for it. If
either or both Fresenius and Terumo decide to launch these higher yield programs, as
MRB expects in 2024 in our forecast, Haemonetics will see additional competitive
pressure. Haemonetics may decide to pursue a legal challenge to protect their status as
the only one in the market to offer an additional yield product based on IP protections
and patents the company has put in place. That said, it is unlikely that this protection
would be robust enough to stop companies from offering a similar offering given that
ultimately any formula that defines the nomogram will be based on FDA regulations,
which makes patents hard to uphold. For the forecast detailed in chapter 7, the
assumption is no legal challenges prevent both Fresenius Kabi and Terumo BCT from
successfully launching their higher nomogram options in the US market, starting in 2024.

Going forward, with other companies besides Haemonetics launching additional yield
products, we expect that 52% of total US plasma collections will use the higher volume
donation technology by the end of 2024. By the end of 2025, it will be 89% of total US
collections and by the end of 2026 it will be 94% of all collections volume. The remaining
collectors (mostly small companies) will not upgrade to the new devices, and thus don’t
receive the benefit of higher donation volumes but also don’t pay more for the soft goods
and software.

Beyond the commercial benefit of being the first to market with their enhanced yield
product, as competitive products come on the market, Haemonetics will still have some
advantages. They have much more data supporting the exact yield improvement across
millions of procedures to show to their customers. Fresenius and Terumo will have their

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data from any study and pilots they conducted but will not have scale as they roll it out
in the first years on the market.

Change in Bowl Technology

Haemonetics has been developing new bowl technology for several years that is about to
be rolled out on the existing NexSys device platform. This completely new bowl which will
be used for all NexSys donations and requires a software update to the device itself. The
software updates will be done remotely and do not require any hardware modifications
to the device. Haemonetics is projecting that their needle-in, needle-out procedure time
will be improved by 20% with this new bowl and software update. Based on the current
average donation times for the NexSys device this would amount to an 8-to-9-minute
saving for an 880ml donor, making the donation time potentially 33-34 minutes, or equal
to Terumo BCT’s Rika device if it is fully realized. This change will require FDA 510(k)
approval, which has not yet been obtained. Please note, no specific data has been released
showing these improvements.

Differences between PCS2 and NexSys PCS:

As outlined above, much of the base hardware in the NexSys PCS device is the same as
the older PCS2. However, NexSys PCS is a smarter device (Bidirectional communications
with Haemonetics Donor Management Systems (DMS) with a better interface (beacon
light, alarm etc.) for the both the operator and the donor. The largest difference between
the two machines is the software changes that can calculate and handle a variety of
nomograms based on the unique attributes of an individual donor. As a reminder, the
nomogram is the amount of plasma that can be collected from a donor. The device can
collect on the 1992 nomogram on either total volume (how the PCS2 collected), target
plasma (YES Technology, only on the NexSys PCS), and now with launch of Persona, the
NexSYS PCS can collect on a different nomogram based on blood volume (factoring in
weight and hematocrit).

YES Technology
In 1992, the FDA established a simplified nomogram for plasma donation. The nomogram
is the volume of plasma a donor can donate and it is currently only based on an
individual's weight (See: FDA Memorandum: Volume Limits – Automated Collection of
Source Plasma (11/4/92); Center for Biologics Evaluations and Research; US Food and
Drug Administration.) This established how much plasma can be collected for different
weight classes along with the total collection volume for a donation.
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After the first draw of a plasmapheresis donation, there is anti-coagulant in the blood
stream of a donor, so each successive draw will have this additional anticoagulant in the
blood and not be just blood and plasma. As a result, each pool of plasma separated is
plasma and anti-coagulant, meaning it is less plasma than just the total volume. This
results in less plasma donated. Prior to NexSys PCS, there was no way of knowing how
much total plasma was in the bottle, so the easy calculation was made that 100% of the
volume was plasma (and no anticoagulant). With the YES technology, the proper
calculation is done which calculates the plasma and anti-coagulant in total, and runs until
the plasma volume (not total volume) reaches the 1992 nomogram limits. According to
Haemonetics, YES technology on the NexSys PCS yields on average up to an additional
31 milliliters of plasma and 36 milliliters of total volume per donation for the highest
weight and hematocrit donors. Tens of millions of YES technology donations have been
completed since the technology was rolled out a few years ago.

Timing for donation:

Given that the hardware technology did not change drastically for the NexSys device over
the PCS2 device, there was not a large magnitude of change with respect to donation
timing on the new device. There was a two-to-three-minute improvement on the PCS2 so
needle in need out times for an average 880ml donor is 42 minutes on the NexSys. This
is slower than the competitive Aurora Xi machine (see next section), which has an average
time of 38 minutes. That said, it will be interesting to see how Haemonetics’ roll out of the
bowl improvement mentioned above impacts donation times. An 8-to-9-minute gain
would materially improve the benefits of the NexSys device compared to Fresenius’s
Aurora XI, and make it comparable to Terumo BCT’s Rika system in terms of donation
timing. Again, it is important to note that the change has not been FDA approved and
there has been no data released to support this potential outcome.

Additional information:
From a maintenance perspective the NexSys PCS works the same as the PCS2 where
customers will manage their own fleet of devices using their own staff. Regarding
interoperability with systems, the NexSys device will best work with any Haemonetics
automated system including NexLynk Donor Management System (DMS). However, there
are collectors that use their own software and the NexSys device and integrate with them,
through a handheld device.

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Persona
In October 2020, Haemonetics announced FDA 510(k) clearance for its NexSys PCS System
with Persona technology. Persona customizes plasma collection based on an individual
donor's body mass index (BMI) and hematocrit. As part of the commercialization process
of the device, Haemonetics conduced a clinical study that Haemonetics called IMPACT
(IMproving PlasmA CollecTion). This was a double-blinded, randomized controlled clinical
trial involving 3,443 donors who underwent 23,137 plasma donations across a number of
centers. The study demonstrated that the NexSys PCS system with Persona technology
was safe and effective. The results showed an average 8.2% increase in volume of plasma
collected per donation across the study population when compared with those collected
using YES technology on the same NexSys PCS device. Since then, over 10 million Persona
procedures have been completed on the NexSys PCS device. In MRB’s interviews it was
found that in the field, the benefit of running Persona was 8.5% average increase in total
volume collected. This equates to 70.5 milliliters of additional plasma plus anti-coagulant
volume (based on an 829 milliliter average collection volume across the industry without
using any enhanced yield products). This represents a volume windfall for collectors that
begin using both YES and Persona technologies. As outlined throughout this report, all
collectors have faced plasma supply shortages/challenges and increased competition for
donors. The possibility of increasing volumes by 8.5% with the same acquisition cost is
very attractive to collectors. That said, as has been proven, cost and giving up negotiating
power was a limiting factor in Haemonetics’ customers quickly adopting this new offering.
In addition, for donors with the highest weight and hematocrit, total collection volumes
went up to 1,000 milliliters and the IMPACT study showed that plasma collection volume
up to a maximum of 1,000 mL was well tolerated in eligible donors.

While the additional yield is a game changer in the plasma industry as outlined above, it
may have challenging up and downstream consequences. In general, plasma donation
bottles were designed to be up to 1,000 milliliters. Now with Persona, donation volumes
could be at or even above that number. Since a new larger bottle is used, fractionation
manufacturing lines may need to be retooled to accommodate these new bottles which
could be complicated and expensive. For example, many fractionation manufacturing
laser-cut the bottles of plasma just above the plasma itself. This will need to be changed
if the bottle is larger; or even it is not, plasma will freeze up the sides of a plasma bottle
and you don’t want the laser to come into contact with the plasma itself. These challenges
go down the supply chain as well in terms of shipping and storage of the new bottles in
centers and in shipping trucks as well. All that said, the ability to collect a significant
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amount more plasma from existing donors while decreasing other per liter costs is a very
strong business proposition for all collectors. Part of the decrease comes from the fact
that most collectors do not pay more in donor compensation for the larger donations
with YES and Persona than the older smaller donations. This has the benefit of spreading
out the donation fee over more milliliters of product, lowering the average fee cost for
collectors. The biggest challenge had been the price negotiations between Haemonetics
and the collectors. With the shift in focus from shoring up supply in an extremely
constrained environment to focusing on cost-efficiency and lowering the cost per liter in
2023, this gave Haemonetics efforts to convert its customers to its latest offering a
tailwind. Collectors are looking for any opportunities to cut down on the cost to collect a
liter of plasma, and the YES system with Persona can help in that regard compared to not
using it with NexSys machines.

Relationship with and feedback from Customers:

Haemonetics historically has had a close relationship with their customers. Beginning in
2015, a number of customers started giving them feedback that Haemonetics had started
leveraging their negotiating position/market share to get meaningful price increases that
the market (collectors) did not feel were warranted. This was seen mostly with the switch
to NexSys with YES and customers felt backed in a corner where they did not want to pay
more for soft goods but were still interested in the additional yield (along with the other
benefits of the new device). From Haemonetics perspective, it took significant R&D and
manufacturing dollars to develop and manufacture the new devices. In their mind, if there
was a benefit from a plasma yield perspective, there is a quantifiable benefit to the
customer and this economic benefit should be shared between Haemonetics and the
collector. To Haemonetics, collectors were used to getting these sorts of improvements
for free, but they had value and thus they should pay something for them. Ultimately,
CSL’s announcement in 2021 that they were shifting to Terumo BCT is a culmination of
these feelings that had been expressed in the industry. It seems to have been a humbling
moment for Haemonetics, and since this report was last updated right after that
announcement there has been an improvement in the feedback from Haemonetics clients.
It will be interesting to see how this trends going forward as competition increases in the
apheresis device market.

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Fresenius Kabi

Fresenius Kabi is a global healthcare company headquartered in Germany with 316,000

global employees as of 2021. Fresenius Kabi purchased Fenwal in 2012 to expand its
medical device/transfusion technology. Fenwal was previously re-launched as an
independent company after it was spun out of Baxter Healthcare’s transfusion therapies
business by TPG Capital and Maverick capital in 2007. Fenwal was first established in 1949,
and through a series of M&A transactions ultimately ended up with Baxter. Fresenius
Kabi’s plasma division is headquartered in Lake Zurich, Illinois.

Technological Approach to Apheresis:

Fresenius Kabi uses a spinning membrane to filter the plasma and separates plasma from
other components of whole blood (red/white blood cells etc.). The main benefit of this
approach to plasmapheresis is that because there is filtration, the cellularity in the plasma
is extremely low. Since the plasma is going through a spinning membrane as opposed to
centrifugation, there is a lower likelihood of cellular material getting through. This key
difference between Fresenius Kabi’s and Haemonetics’ technology was a technological
approach/decision that each company took over 30 years ago. The companies that utilize
Fresenius Kabi devices see it as a competitive advantage to use filtration technology with
the resultant low levels of cellularity in the plasma.

Market Share:
As the second largest player in the North American collection device market, Fresenius
Kabi has market share of 30% in early 2023, with Takeda, formerly Baxter as one of the
company’s biggest customers, given their shared history. This is up 8% from when this
report was last released in 2021 (22%). Given the challenges that Haemonetics has faced
over the last two years as outlined above, this has left an opening for Fresenius to capture
some share and having some competitive conversions. To start, Fresenius will likely not
be impacted from a market share perspective by CSL/Terumo BCT’s recent announcement
as CSL did not utilize Fresenius Kabi devices. That said, once CSL’s exclusivity period with
Terumo BCT expires, it is likely that Haemonetics customers will be curious to explore
working with Terumo and utilizing the Rika device for at least part of their fleet to
understand its potential benefits. This overall increase in competition will increase the
likelihood that Fresenius Kabi will lose some market share to the new competitor.

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Business Model and Approach to Market:
Fresenius Kabi also uses a “razor blade” approach to the market where devices are placed
in the customers centers at no charge, but then disposable kits are sold for each marginal
procedure/collection. The soft goods/kits sold to customers include the spinning
membrane (spinner), bottle/bag, tubing, anticoagulant solution, and depending on the
customer, also saline. For this business model, there is a base number of collections that
each collector must hit per device per year to ensure that the devices are utilized at a
certain minimum level while they are placed in a center. This placement business model
approach is a win-win approach for Fresenius Kabi and the customer. Fresenius will obtain
a long tail of revenue stream for each device in a center with downside protections against
low volumes, while customers (collectors) do not need to invest a significant amount of
up-front capital expenditure to purchase each device.

Utilization Rates:
Since the business model is the “razor blade” placement approach, it is important for
Fresenius Kabi to protect their downside and ensure that their devices are utilized enough
to make their capital investment in machines worthwhile. Unlike the turn rate metrics that
are used by Haemonetics on its machines and dealing with number of days open per
year/per month on a five day per week schedule etc., Fresenius Kabi uses the metric of
collections per device per year. There is a differential in utilization between Fresenius’ two
machines the Aurora and the Aurora XI. The Aurora XI typically sees a higher utilization
since it is used in the busiest centers given its shorter collection time compared to the
Aurora. On average Fresenius sees between 1,400 and 1,600 collections per device per
year for the Aurora Device, which would be 5.3 to 6.1 times per day on a standardized 5-
day work week. This is roughly 15% higher than was seen in early 2020 and reflects
collectors focus on operational efficiency and their resultant removal of machines from
their centers during the pandemic. For the Aurora XI device, Fresenius sees between 1,700
and 2,000 collections per device per year, which would be 6.5 to 7.7 times per day on a
standardized 5-day work week. This is skewed given that the highest traffic centers use
the higher throughput (and cost) devices. Much like other production/efficiency metrics,
these utilization metrics vary widely between collectors and between different centers
within each collectors’ fleet.

Fresenius Kabi Devices:

Fresenius has two apheresis devices that are currently deployed in the market
commercially. The first is the Aurora device which was launched in 2012 and is the current
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standard device of the company. Aurora replaced the 1985 launched Autopheresis-C (or
Auto-C) device which was one of the first commercial automated plasmapheresis devices
on the market. The last Auto-C device was retired in the United States and taken out of
commercial use in 2016. More recently, in 2018 Fresenius Kabi released its new
plasmapheresis device called Aurora Xi which saw significant time savings when compared
with the Aurora and any other competitive devices at the time of launch. Unlike
Haemonetics which is retiring their older apheresis device, the PCS2, Fresenius will be
offering both devices going forward. This will allow their customers to choose the device
that best fits the center given that there is a cost differential between the two devices.
Given the speed of the Aurora XI device, there is a premium paid to use that device and
it may not make sense for all centers. As identified above, the Aurora XI generally makes
sense for the busiest centers as it can speed through donors with a higher throughput
rate.

Aurora
This device was originally deployed in 2012 and there have been many millions of
collections on it since launch. Currently, Aurora represents roughly 70% of all Fresenius
devices deployed across its customer base. The Aurora device uses spinning membrane
technology to filter plasma from whole blood. Fresenius Kabi also has software called DXT
which enables bi-directional integration with a collectors’ donor management system and
allows for auto-programing of the Aurora and Aurora Xi machines. More details on DXT
are in the software chapter of this report (Chapter 10). Fresenius has taken the PC
approach as opposed to the Apple approach of Haemonetics. Namely in the plasma
collection world, Fresenius has more of an open architecture approach to the market and
have been willing to work with and integrate any company’s software system with their
devices, including their competitors. That said, to date, Fresenius devices have only
integrated directly with non-Haemonetics software systems. The device currently works
alongside Haemonetics software in many centers across the US, but in each of those cases
an operator (usually a phlebotomist) must use a bridge device to access the information
from the software system for entry onto the device, usually with some sort of PDA or
tablet. The handheld devices enable the operator to access information about the donor
including the correct draw volume based on the information collected during the
screening step of the process. With the handheld, the operator needs to enter the draw
volume into the device, which leaves the process open to human data entry errors and
potential for over or under draws. An overdraw is when more plasma is collected from a
donor beyond the FDA allowed nomogram. This is a big donor safety issue that can cause
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the center to have regulatory issues and can also cause the deferral of the donor. An
undraw is when the center collects under the FDA defined nomogram based on a donors
weight. While this is not a donor safety issue, it does result in a lower volume of plasma
than a company could have collected if there had not been any error. Having a handheld
also opens the center up to additional risk as it is also another device in the center that
could break, be lost, stolen, have connection issues, or otherwise impede the collection
process. If Haemonetics was open to letting its software directly integrate with the
Fresenius devices, to preprogram the machine, these issues would be eliminated though
there is very little incentive for Haemonetics to do so from a competitive standpoint.

Donation Timing:
The average needle in/needle out time for an 880ml donation on the Aurora device is 52
minutes. This is slower than the competitive PCS2 machine from Haemonetics, which is
45 minutes. This is where the Fresenius Kabi device was weakest as the entire collection
business model is a maximization of throughput questions and to have a slower device
made it difficult to expand market share. The company set out to address this deficiency
with the next iteration of the device, the Aurora Xi, and succeeded as described below.

Additional information:
From a maintenance perspective, Fresenius Kabi offers both a full-service maintenance
plan where they offer comprehensive maintenance to keep the machines running
smoothly but also a plan where centers/companies manage and maintain the devices
themselves. The vast majority of their customers are self-service and have their employees
sent to be trained in machine maintenance. This leads to the same challenges as outlined
with Haemonetics’ self-service of devices; retaining talent particularly those who have
experience and have been trained in the machine maintenance. Ultimately it is the
prerogative of the collectors and they have chosen to take it on this risk, in order to lower
their costs. This arrangement is different from what is seen on the whole blood side and
in plasma collection in Europe where collectors opt for the manufacturer to maintain the
devices in many cases. To train the employees of a collector, Fresenius has a three-and-
a-half-day course that they provide in Fresenius’ Lake Zurich headquarters. This course
trains the center employees that will be responsible for servicing and maintaining the
devices on site. Once the training is complete, there is also a phone hotline that service
technicians can call if there are any questions or problems as they service a device.
Collectors generally send employees to be trained at new centers 4 to 6 weeks before a
new location is to be opened.
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Aurora Xi
This is the latest device from Fresenius Kabi which was released into the market in 2018.
Currently, Aurora XI represents roughly 30% of all Fresenius devices deployed across its
customer base. The Aurora Xi uses the same base spinning membrane filtration
technology with specific changes that improve the offering to their customers. In
particular, the time-deficit that existed between the original Aurora device and
Haemonetics’ PCS2 had to be mitigated to make Fresenius Kabi more competitive. Similar
to the fleet turnover of HAE, some customers have been hesitant to switch to Aurora Xi
since it is a premium-priced product, so a collection center needs to have enough donors
and be streamlined to a sufficient extent to get the value of a faster machine at extra cost.
This reinforces the point mentioned above where customers can choose which centers
they want to deploy the Aurora XI in as the Aurora device is not being retired. The centers
that are the most streamlined and are operating at full capacity are the ones that have
switched, as it is in their financial benefit to do so. Fresenius Kabi hopes this differentiated
pricing program and options will make them more competitive as Haemonetics is looking
to phase out PCS2 devices.

Differences between Aurora and Aurora Xi:

The biggest difference in the hardware associated with the Aurora Xi is the size of the
spinning membrane in the soft goods kit. The spinning membrane or “spinner” on the
Aurora Xi is 50% larger than the one on the original Aurora. The larger surface area of the
spinner allows for a more efficient and thus faster collection of plasma from whole blood,
which is the main advantage of the new device. It is important to note that the Aurora
and the Aurora Xi both have the same flow rates though the collector can set the
Extracorporeal volume (ECV), or the volume of all blood elements removed from the body
volume of each whole blood draw on the Aurora Xi and choose between either 200
milliliters or 250 milliliters. This is an attractive feature because if the 200ml setting is
activated and there is a problem with the donation and the ECV is lost, that donor will not
need to be deferred for a few months as the regulatory limit for red blood cell loss is 200
milliliters for a donor. The downside for putting the ECV Draw setting at 200mls is that it
may precipitate another draw and return cycle which would extend the donation time for
the donor. In general, when Fresenius Kabi was developing this next generation machine,
they were trying to strike a balance between changing things to improve and speed up
the process without taking unnecessary risks that would increase donor reaction rates or
make it harder to get the device approved by the FDA.
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From a donor and operator perspective there were a number of improvements including
screens on the sides of the Xi for donors to see where they are in the process, and alert
beacons so operators can see if there is an issue or alarm with a donation or when a donor
is waiting to be disconnected from a device.

Donation Timing:
The Aurora Xi showed a substantial increase in donation speed when compared with the
original Aurora device. It only takes 38 minutes for the average needle-in needle-out
donation time for an average 880ml donor. This has leapfrogged the competition as the
latest Haemonetics NexSys PCS average donation time for an average 880ml donor is 42
minutes. Terumo’s Rika system is even shorter still, at under 35 minutes. It is also not clear
how this will compare to the donation times of Haemonetics NexSys device after the
company rolls out its updated firmware and new bowl to increase donation speed. Prior
to Terumo’s announcement of Rika, Fresenius went from being the slower of two
alternatives to the faster of the two in the latest generation device. Even with Rika,
Fresenius is on the faster end of the range, and it is assumed that it will remain extremely
competitive going forward.

Additional information:
The maintenance situation for the Aurora Xi is the same as the original Aurora with most
devices being maintained by Fresenius Kabi’s customers and all the challenges that come
with that decision. Much of this is dependent on how good the collectors trained how
much experience they have and their overall training, and how well they retain their
employees. This again illustrates the important of a well-trained staff with low levels of
turnover for operational success.

Response to YES Technology and Persona: While the Aurora Xi device solved Fresenius
Kabi’s drawbacks with respect to donation time (needle-in /needle-out), the introduction
by Haemonetics of YES technology and Persona opened a new dimension of competition
between the two companies. Fresenius Kabi has confirmed they are in the process of
developing competitive products to both YES and Persona. As an alternative to YES
technology, Fresenius Kabi has already released the “Optimized Nomogram” offering that
calculates how much anticoagulant is in the bottle versus actual plasma. The Optimized
Nomogram enables the device to collect until the total plasma volume target set by the
FDA has been hit. Under the Optimized Nomogram, both the Aurora and Aurora Xi
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devices top out at between 911 and 914 milliliters in total volume for a donation, or 31
and 34 milliliters more, respectively than before. At this point approximately 95% of
collection procedures done on any Fresenius Kabi devices utilize the Optimized
Nomogram feature.

With respect to Fresenius Kabi’s response to Persona, while it has yet to be FDA approved
and rolled out, it is anticipated that Fresenius’ offering will not be the exact same approach
as Persona but will have similar benefits in terms of additional plasma volume. The
eventual offering will be more personalized than Persona, taking into account additional
attributes beyond weight and hematocrit, which are the factors which Persona uses to
calculate total plasma. Fresenius Kabi has been working on this for a significant period of
time and the company recognizes this is the future of the business. As is discussed in the
Chapter 7 of this report, MRB believes that Fresenius Kabi will move forward with an
additional yield product in 2024 and will have a similar value split to that received by
Haemonetics; with 75% of the value going to collectors, and 25% going to Fresenius (the
latter mostly in terms of higher soft goods/disposable prices).

Given fewer details about the timing and features of the new higher volume nomogram
from Fresenius Kabi, it is more difficult to predict the uptake of this software by year.
However, it is coming after Haemonetics’ option is already promoted and adopted, and
so the market will already be familiar with the benefits of this type of improvement,
helping increase Fresenius Kabi’s uptake. In the forecast model, we assume that 35% of
collections using Fresenius Kabi’s machines are with the larger volume technology in 2024,
and that it is 75% in 2025, just one year later. This is faster because it is a second mover,
but also because their main customer is Takeda (BioLife), which we expect to transfer 40%
of their collections over in 2024 to the new technology and another 40% of collections in
2024.

Relationship with Customers:

Fresenius Kabi takes a customer centric, consultative approach to the market. Their stated
goal is trying to help customers maximize their collections and try to limit the
transactional nature to the relationship. Fresenius Kabi has 16 plasma consultants who
know how to fix machines and help centers drive operational efficiencies. From the
Fresenius point of view the goal is service and support. They call the sharing of best
practices and workflow improvement “Smart Support”. It is all about training operators
and staff and utilizing the device to the upper limit of its capability and optimization.
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Feedback from Customers:
There was a great deal of enthusiasm and support from collectors that have worked with
the Fresenius Kabi team both on the sales and operations/support sides of the business.
Fresenius Kabi is seen as a collaborative, easy to work with partner. The improvement in
timing from the Aurora to the Aurora Xi has greatly improved the business case for using
the machines as well, and a number of collectors are considering a switch for all or part
of their collection network. However, the main downside for collectors that currently use
Haemonetics as their BECS system provider/vendor is that there is no direct integration
between Haemonetics NexLynk or other DMS system and the Fresenius Kabi devices.
There is a work around with using a handheld device as an intermediary between
Haemonetics software and Fresenius hardware, but it is a clunky solution and negates
some of the benefits of the latest generation machines. This is where taking the PC, open
architecture approach to the plasma market is a negative and puts Fresenius Kabi at a
competitive disadvantage. It shows that having the automation BECS software as the
sticky tip of the spear is a competitive differentiator for Haemonetics. It is likely that
Fresenius Kabi not having a BECS offering has limited the company’s market share growth
in the industry. That said, given the news from CSL and Terumo BCT, this could signal the
collectors desire to limit their reliance on one vendor for too many critical aspects of their
collection process, lest they cede too much control and lose leverage in negotiations. The
logical next step for Fresenius Kabi would be to further develop or build from scratch their
own internal BECS system. In this case, that outcome would flip the situation on its head
and greatly help the positioning of Fresenius Kabi, potentially make them the preferred
apheresis device option for major collectors. The other challenge to Fresenius is bringing
to market an answer to Haemonetics Persona. Customers told us that given the focus on
cost efficiency, it is going to be critical to have an additional yield product that can be
used. The longer it takes to roll this out or if it does not happen, this could impact
Fresenius’ market/competitive positioning.

Recent and Potential New Entrants

Given the size of the plasma collections market and its rapid rise and growth over the last
15+ years, there have been continued rumors and discussions around new entrants to the
US market. Many potential market participants saw the duopoly in place as an indicator
of an attractive market that has not had strong competitive pressures yet. This attractive
market however does not take into account how entrenched both Haemonetics and
Fresenius Kabi are in the industry. It would take a large investment of capital and time
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along with strong partnerships to truly compete in this space. In particular, there are two
players who have taken or are considering steps to enter the United States collections
market:

Terumo BCT
Terumo BCT is a subsidiary of Terumo Global, a worldwide medical technology company
headquartered in Japan with over 28,000 global employees and $5.2 Billion in annual
revenue. Terumo bought CaridianBCT from a Swedish Firm in 2011 for $2.6 Billion. Terumo
BCT’s plasma division is headquartered in Colorado. The company is an established player
in blood collection/apheresis technology globally though it has not participated in the
U.S. Source plasma market previously with their plasmapheresis devices.

In April 2021, CSL Plasma made an announcement that it was partnering with Terumo
Blood and Cell Technologies (Terumo BCT) to develop a new plasma collection platform
for CSL Plasma, the operator of the largest network of plasma collection centers in US
(319 centers as of the end of 2022) and collecting 32% of the total plasma in the United
States. A clinical trial with the new machines started in April 2021, and FDA approval was
received in March 2022.

This announcement was a significant change to the current duopoly for plasmapheresis
machines and their market shares, and one that has already started to have significant
ramifications for the plasma industry. This includes the potential for lower costs for soft
goods/disposables for CSL Plasma as a result of this development. It may also lead to
overall downward pressure on the price of soft goods/disposables as collectors will have
another potential vendor option when negotiating their soft goods contracts. It most
materially impacts Haemonetics but will put pressure on both Haemonetics and Fresenius
Kabi once Terumo BCT’s exclusivity period with CSL expires. It is estimated this will occur
in 2025.

When the CSL / Terumo partnership was announced, the companies expected that CSL
would switch away from Haemonetics PCS2 device to the new Terumo device by July 2022
though there was an option for CSL to extend the Haemonetics contract by a year. In
general, the roll out of the new device has been slower than originally anticipated. First,
CSL extended its contract with Haemonetics until July 2023. Then the contract was further
extended through Dec 2025. This has been driven primarily by supply chain disruptions
around electronic chips and other components for the new device along with the
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challenges of scaling up new production lines and manufacturing capacity. Basically,
Terumo was not able to build and deliver the new plasmapheresis machines as fast as
they planned to, and the softgoods production was having lower yields of high quality
finished goods than anticipated.

It was always going to be difficult to roll out new devices to 300+ centers over 9 to 12
months with the staffing shortages that were seen across the industry in 2022 through
early 2023. The final component that delayed the roll-out of the device was when the
device was being tested in its limited market release there were certain false alarms being
triggered on the device during a collection. These kinks have been worked out and it
seems as though the roll-out of the devices will take on a more improved cadence. As of
the writing of this report in May 2023, Rika has been rolled out to 6 centers in the US.
Terumo’s stated goal is to be in 50% of CSL’s centers in the next 12 months (by 2nd quarter
2024).

In exchange for partnering with and opening up this large and growing market for Terumo
BCT, CSL is getting the first right to utilize the new device (exclusivity) in the United States
until at least 2025.

The Rika Device and Terumo’s Technological Approach to Apheresis:

In 2022 after receiving FDA approval, Terumo announced the name of its new apheresis
device: Rika. From a technologic perspective, Rika uses centrifugal force separation as its
core plasmapheresis technology – similar to Haemonetics’ devices. That said, Rika
differentiates itself by using Terumo’s patented channel and loop technology. The main
advantage of this is a faster donation (34 minutes). In addition, the design of the device
allows for a lower extracorporeal volume (ECV). If there is a problem with a donation, if
the Red Blood Cell (RBC) loss is greater than 200 milliliters then a donor must be deferred
for months as it is considered that they have given a whole blood donation and thus must
wait 3-4 months before donating again. With Rika, regardless of the settings chosen on a
device, the ECV never goes above 200mls, thus virtually removing the risk of an RBC loss
deferral. Rika’s centrifuge is also never static. Even when the machine is returning red
blood cells to the donor’s vein, it is still actively optimizing the plasma coming out. This
allows for faster donation times without increasing flow rates. This efficiency also requires
fewer pumps, a cost savings innovation.

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Market Share:
As of now, Terumo only has roughly a 0.5% market share given the nascent roll-out of the
Rika device across CSL’s fleet of centers. That said, going forward, Terumo will build up to
a market share over 30% in the United States given their partnership with CSL once it is
fully transitioned to the new machine. At present, this is planned for by the end of 2025.
This comes directly out of Haemonetics market share as CSL nearly exclusively used
Haemonetics devices before the switch. After the exclusivity period ends, the MRB
anticipates that Terumo will market the Rika device more broadly and go after additional
market share from both Haemonetics and Fresenius Kabi. The MRB expects a number of
other companies to demo the Rika device in a few centers to see how it compares with
their current machines.

Business Model and Approach to Market:

It is assumed that Terumo BCT will also use a “razor blade” approach to the market when
it rolls out, where devices are placed in the customers centers at no charge, but then
disposable kits are sold for each marginal procedure/collection. It is also expected that
there will be base contractual utilization per device per year to ensure that the devices are
utilized at a certain minimum level while they are placed in a center. That said, given the
advantageous terms that CSL was able to obtain from Terumo given the market entry CSL
enabled, it is possible that these utilization numbers are lower for CSL than what is
currently standard/market across the industry.

Donation Timing:
The average needle in/needle out time for an 880ml donation on the Rika device is 33.7
minutes. This is faster than any of the competitive apheresis machine on the market. This
time is based on a small sample size given the limited roll out of the Rika device, so its
fleetwide average may differ when at scale. While both Terumo and CSL anticipate this
average to continue, it is hard to tell ahead of time if this will happen at full scale. This
time also takes into account Terumo’s version of Haemonetics YES and Fresenius Kabi’s
Optimized Nomogram programs. a key benefit.

Additional information:
From a maintenance perspective, Terumo’s customers manage and maintain the devices
themselves with the help of Terumo. This leads to the same challenges as outlined with
Haemonetics and Fresenius Kabi’s self-service of devices; retaining talent particularly
those who have experience and have been trained in the machine maintenance. Much of
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the maintenance training is done online using Terumo’s e-learning portal. A big
differentiator is Terumo’s MIATA Platform where all service records are kept electronically.
This feeds into Terumo’s back-end system and when parts are running low or if the system
predicts that a machine will break it automatically order the part in need and sends it
directly to a center before the device is down. This is a potential advantage for the Rika
over Haemonetics’ and Fresenius Kabi’s devices.

Beyond the servicing of the devices, Terumo offers the KINARI Device Management
Platform to its customers. This is a full suite device management platform that enables
varying degrees of a customer’s organization to see the status of their machines, their
utilization, and other performance metrics.

Scinomed
Scinomed is a Chinese company that is active only in Europe and China at the current
time. The device they have on the market called Scinomed Plasma Collection Machine
(PCM) operates using the same technology as Haemonetics (centrifugation). Haemonetics
alleges that the company infringed upon its IP, which Scinomed denies. The PCM was
launched at the end of 2018 and the company’s largest footprint outside of China is in
the UK, Hungary, and Germany. Globally there are over 400+ devices deployed. Scinomed
is in the process of considering and planning out a possible entry into the North American
market. It would be challenging to do that without a partner where there would be a
guaranteed number of centers in which they would deploy, particularly given the
increased competition in the space with Terumo BCT’s entrance. Regardless, Scinomed
still needs to get the FDA approvals for their machine to be commercially available in the
United States, a lengthy and process, but not prohibitably so. They are not expected to
be in the US market in the next couple years, but could later if they decide it makes
business sense.

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10. Software (BECS/DMS)

As in a number of other industries across the world, software has taken on an increasingly
important and prominent role in industries that previously had been insulated from
technological change. Plasma is no different. Just as with medical records, the shift to
electronic storage of these records has enabled more efficient operations, processes, and
system flows. What was first called the Blood Establishment Computer System (or BECS)
by the FDA has over the last 10 years morphed into the driving force behind the entire
donation process. A process that had once been fully manual using paper records has
become fully automated with virtually no paper records in the centers (depending on level
of implementation on a center by center and company by company basis). Collectors have
each decided the extent to which they want to automate their processes and which
systems they use to do so. The general trend is toward increased automation and software
enabled actions all throughout the collection process. This trend is likely to continue, and
all collectors will be paperless in the next 2 years. This chapter will outline the main
solutions in the market including the advantages and disadvantages of each. Keep in mind
that due to the trend of vertical integration in the industry over the last 20 years, different
entities under one corporate owner may have different, disparate legacy systems.

From a collector point of view, implementing a BECS solution is incredibly expensive and
onerous both from a licensing/development standpoint as well as operationally (training
employees and adjusting processes/quality systems across large, complex organizations).
Despite these drawbacks, the potential payoff of streamlining processes and making the
donation process simpler, coupled with direct cost savings in personnel and supplies
makes for a very compelling business case. Automating the plasma collection process also
enables donors to move through the process faster, thus increasing turn rates and overall
production. Beyond these quantifiable monetary benefits, there are equally significant
quality, donor, and product safety improvements that come along with automating the
process. Processes that had relied on human data input in the past or required human
review are now all automated. This means that across the process, actions are now either
auto populated or validated so that checks and balances are built into the system, a large
advantage for efficiency and for quality.

Throughout every part of the donation process automation has been a game changer,
including:

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 - From filling out Health History Questionnaires on tablets or even more recently on
their mobile phones before they arrive at the center, while automatically flagging
questions that could disqualify a donor,
- Auto entry of weight in screening and pre-populating the apheresis machine to
draw the volume based on the weight identified in screening (whereas before that
had to be manually entered),
- In the lab inventory control is all done via barcode or RFID, and
- Donation samples and testing are all tagged and barcoded so nothing is
mislabeled or misattributed to the wrong donor.

From a testing perspective, there used to be pdf’s with thousands of results on it which
had to be reviewed by hand. Now the test results come in directly to the automated donor
management system and it flags only the donations that have an unacceptable result, or
a result that must be reviewed. It is hard to overstate the time and personnel
improvement/value of this, let alone the decrease in risk to the collector that a positive
unit might be sent out for fractionation. Finally, across the board, this has led to fewer
audit findings and better outcomes for the collectors.

Broadly there are three options collectors have when it comes to automation software
solutions. The first is to use Haemonetics’ complete system. The second is to use MAK-
SYSTEM’s e-PROGRESA system. The third and final option is to develop an internal system
that each collector manages themselves. All three are discussed below. All systems that
are used to facilitate plasma donation must be 510k cleared by the FDA before being used
commercially.

BECS/DMS Software from the Collector Point of View

Haemonetics

Haemonetics is analogous to being the Apple of the plasma industry where they prefer
to operate in a closed-off system and control end-to-end hardware and software that
work together across the collection process. The company does not enable their software
to work directly with any other collection device and their collection devices do not work
directly with any other software; there must be some sort of bridge device between the
device and Haemonetics software offerings. This has been done using a Personal digital
assistant (PDA) or tablet and requires some manual entry. Over the course of the last 10
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years, the software portion of Haemonetics business has become more and more
important in order to facilitate the core part of the business – the collection devices and
the sale of their soft goods. It has high profit margins which is typical of other software
businesses and serves as the tip of the spear in the sales process and is the “sticky” factor
binding collection businesses to Haemonetics for both software and collection devices if
collectors want a fully automated, non-handheld involved environment in their centers.
Once the business processes of a collector are enmeshed in one of Haemonetics BECS
tools, it is extremely difficult to shift away from it, and Haemonetics knows this. If a
collection company wanted to change the system that they utilize, beyond the challenge
of training all staff how to do their job in a different way, there is significant risk when
migrating data and that some information will be lost or that it will not be migrated
correctly. From a regulatory/quality as well as a donor safety perspective, this is something
to be avoided if at all possible and many times the risk does not justify the potential
reward. Even when switching from one 510k cleared system to another there are unique
challenges that this presents. Despite this, the CSL and Terumo BCT partnership is an
indication to the market that collectors are willing to take on audacious, risky projects that
require significant expenditures in order to exert more control over their processes and
costs. This could have implications beyond the apheresis device market and be a signal
for the software side of the business that collectors are looking to invest more in their
own capabilities, so they better control the outcome.

Background/History:
Haemonetics has been developing software for their collection devices since their
inception. As software has become a more important driver in the collection process, the
company has expanded their offerings by purchasing a number of software companies,
including Edmonton, Canada based Fifth Dimension (5D) Information Systems in 2001
and Information Data Management, Inc. in January 2007, among other transactions. On
August, 2007, 5D and IDM were officially merged into a new subsidiary called
Haemonetics Software Solutions. Since that time, the company has continued to develop
its software offerings as a core part of its business.

Business Model:
Like the marginal pricing model that Haemonetics employs for its collection devices
(providing machines for free but charging for each soft good kit), software is structured
in the same way as the collector pays per donation. However, there may be monthly
charges when a collector is operating below a certain volume threshold. In addition, on
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top of the per collection charge, there is typically an initial configuration fee, which
normally runs in the hundreds of thousands of dollars, where the system is adapted to
the specific SOP of the collection company. If any additional reports are desired by a
collector, Haemonetics will charge on a time and materials basis to build those specific
reports into their reporting outputs. Also, from a database/server management
perspective, most customers have opted for an out-of-the-box, turn-key solution with a
certain amount of customization. This tracks with the broader trend of software as a
service as companies have difficulty keeping up with hiring and maintaining a workforce
of highly trained software developers and keeping up with the changes in development
over time.

Products:
Haemonetics started with the “Donor Management System” (DMS) software which has
subsequently been released in a number of different versions. This has more recently been
supplanted by the new NexLynk DMS.

DMS:
Haemonetics’ DMS System has gone through a variety of iterations and versions over the
years. Originally it was hosted on mainframes and local company-based servers before
cloud products like Amazon Web Services were widespread. DMS was really the software
solution that was developed for the PCS2 device. DMS was seen as the typical workhouse
of collections, similar to the PCS2 itself. There were not a lot of bells and whistles with the
offering until the bidirectional system was offered, allowing DMS to communicate directly
with the PCS2 machine, thereby allowing it to pre-program the machine with the
collection volume; thus eliminating any operator error. This was a game changer and
helped to further push adoption of the system. In the past, DMS was the leader in the
industry but over the last two years, DMS has been supplanted and replaced by the newer
NexLynk DMS offering (detailed below).

A downside of the DMS system was the routine updates that were typical of the
mainframe or server-based systems that proliferated in the past. Instead of the updates
being seamless and almost invisible to the collector, it had to be rolled out across the
entire fleet of centers. This caused significant disruptions to the operations of the
collectors and was costly in terms of time and retraining of a collector’s workforce.

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NexLynk DMS:
NexLynk is the modern next generation automation tool designed to accompany the
NexSys PCS device. This is a fully cloud based system and has a full suite of modules to
address the entire collection process. Haemonetics’ goal for this product was to take what
worked in the DMS core product and improve upon and expand it. For example, the
updates are now automatic. While the website that is accessed by each center has
changed, there is very little disruption to the day-to-day usage of the system when
updates are propagated. This is now more similar to other commercial, cloud-based
software that people are familiar with today. Just like with the NexSys PCS device,
Haemonetics claims that NexLynk increases productivity, improves quality and
compliance, and strengthens donor relationships. From the productivity standpoint, data
exchange capabilities were streamlined throughout the collection process. Quality and
compliance were bettered by eliminating the last vestiges of the paper-based system
which helped to ensure accuracy and documentation. Finally, Haemonetics says that by
accelerating data collection, reducing wait times, and accelerating donor flow through the
center NexLynk DMS improves the relationship with the donor. A good example of that
is the new Donor 360 phone app by Haemonetics that enables remote completion of the
Donor HHQ as discussed earlier in this report. Haemonetics plans to increase the features
and functionality of this app over time. It also extends to the device and device
management. Device 360 is also a product that Haemonetics is developing that focuses
on fleet management and analytics.

Customer Feedback:
In general, customers that were interviewed for this report were satisfied with both the
DMS and NexLynk products, though NexLynk was certainly seen as being far superior. The
functionality that is part of NexLynk, such as the faster processing, better usability, and
more seamless updates, won plaudits. The criticisms were generally around the reporting
and dashboarding functionality of the system. While some good metrics can be obtained
in the off-the-shelf solution, when collectors try to go a level deeper in their analytics
capabilities, they are required to pay for a custom build solution by Haemonetics
engineers. This is expensive and can take a long time to develop.

Other Considerations:

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Maintenance:
From a maintenance perspective, NexLynk DMS is very much a turnkey solution. Unlike
Mak Systems (described below), which allows customers to manage their own systems,
and also unlike from how Haemonetics approaches the maintenance of their devices,
Haemonetics takes care of all maintenance of the software system and manages up-time.
This is a contractually mandated item and based on the feedback received from customers
this is what they prefer. The largest collectors do have the capability to host their own
version of NexLynk themselves. Hosting their own NexLynk software themselves provides
cost savings from a per donation fee perspective, but it comes with enhanced execution
risk.

Unique functionality:
As has been outlined previously, Haemonetics has been very reluctant to allow other
software to integrate with their collection devices. The biggest unique feature
differentiator is the fact that NexLynk can integrate with all Haemonetics hardware and
that Haemonetics DMS software is already running and part of a collector’s
process/workflow, making for a seamless experience with full trouble-shooting support
available.

Mak Systems

Historically, Mak was the other major vendor offering a 510k cleared software solution in
the plasma collections space. Mak’s main business is in the whole blood collection space
and 70% of the global blood supply is collected and managed using their software.
Recently, Mak lost its largest customer (BPL) in the plasma industry in the United States
and it is unclear that it will be able to attract another large customer in the space without
a significant redevelopment of its product. The company is still active in Europe and has
plasma collectors there. In general, MAK has an open architecture approach to software
(more like Google’s Android operating system), and they will integrate with as many
systems and devices as possible. The company has global agreements with companies
like Abbott, Roche, Terumo BCT, and Fresenius, so if a business utilizes these devices either
on the plasma or whole blood sides of the business, they know they can integrate with
Mak’s products. Given that only Haemonetics and Fresenius plasmapheresis machines are
used for Source Plasma collection in the US at present, the other company integrations
(Abbott, Roche, Terumo BCT) are not important to driving adoption of Mak’s software in
the plasma collections industry. As of right now, Mak only integrates in the US with
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Fresenius Kabi devices (Aurora and Aurora Xi) directly (through DXT which will be
discussed later), and indirectly with Haemonetics PCS2 through a handheld PDA. Mak
does not integrate with the Haemonetics NexSys device. As integrations listed above
illustrate, Mak has very much embraced an open architecture ethos and pursued as many
integrations as possible. They are agnostic to hardware and want to integrate with all
players in the space. The fact that they do not directly interface with Haemonetics devices
which amounts to 69% of the installed collection devices in the United States limits the
market share that Mak can achieve at present.

Background/History:
Founded in 1984 by Simon Kiskovski, MAK provides software for the blood chain
management process, from donation through to transfusion. The company has been a
family owned and operated business since inception until The Carlyle Group made a major
investment in the company at the beginning of 2020.

Business Model:
If Haemonetics is the Apple of the plasma industry (Hardware + Software in a closed loop),
Mak is the Microsoft (software) alongside Fresenius as the Intel (hardware) of the industry.
Mak has a flexible business model and largely leaves it up their customers to set their
preference for the offering, letting them decide things like who manages the tech stack,
level of customers service, and whether it is software as a service charged per donation
or more up-front payment based. In general, Mak prefers the software as a service model
with a per donation charge made to the collector. Broadly speaking, Mak has a modular
approach to software and customers can choose to have certain modules of the software
or the entire suite of products end-to-end, covering the entire plasma collection process.
Mak makes it easy to turn on/off different modules as a customer needs them.

ePROGRESA:
This is the main software product that the company offers the plasmapheresis market. It
is a web-based HTML software solution with modules that span the entire plasma
collection process/cycle. As outlined above, customers are able to choose the modules
that they want to utilize, and the system is fully configurable which brings flexibility to
their customers. Little is hard coded into the product. That said, there is a pre-configured
out-of-the-box solution that could work for most plasma collectors depending on their
SOP. For example, one of the modules is a portal for donors to log in to do things like fill

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out the HHQ before arriving at the center or getting information on their donations which
only certain collectors utilize.

Every six months, Mak comes out with an update on the system/modules so they are
continually improving their product. Every time an update comes out, customers have a
choice of whether or not they would like to roll out the update. This means that customers
are not forced to make any changes that they do not want to make. From a technological
perspective this can lead to issues with many different permutations of the product being
commercially utilized across customers. From a level of service perspective, e-PROGRESA
customers can be fully autonomous from MAK, meaning they can operate the hardware
architecture of the system, change the systems, and do the validation at will, without
having MAK involved. For other organizations, it can be a mix and Mak is able to ramp up
and down the service at the customer’s option and budget. Most customers want to
leverage MAKs knowledge in the industry and prefer to use their full suite solution.

Fresenius Kabi’s DXT System:

As mentioned before, Fresenius does not have their own BECS offering in the market, but
the company has developed a system called DXT, that functions as a bridge between their
collection device and any BECS system, as well as provides data analytics and analysis
tools to help any of their customers derive insights into their business operations. DXT
was a software offering that had been used across all of Fresenius Kabi’s products
including areas outside of plasma. Within the plasma industry, DXT has been available
since the Aurora device was released in the market. Fundamentally, Fresenius Kabi’s
position has always been that they are a device company, not a BECS/software business
– and they don’t want to be the latter. That said, the company understands the importance
of having software systems in place for plasma collectors and in making the entire process
paperless while providing as much data and insights into the process as possible. To that
end, the company created a system called DXT. At first, DXT just provided two-way data
communication between a collector’s donor management systems and their
plasmapheresis devices (MAK or otherwise, though Haemonetics has not integrated with
DXT). DXT grew to become a full data management layer that sits on top of their
customers’ BECS system. It auto-programs Aurora / Aurora Xi collection devices for
customers using non-Haemonetics systems, allowing for a paperless system and reducing
the chance for errors. On top of this base, DXT was developed to offer data driven insights
to help enhance collection performance including monitoring all centers and devices in
real time using a dashboard. This can help the collection centers increase productivity and
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efficiency by identifying any outliers from an operator and machine perspective. For most
of Fresenius’ devices, DXT is the final component needed for achieving an integrated
physical and digital collection ecosystem. At this time, DXT does not integrate with
Haemonetics DMS/NexLynk system though Fresenius would like to be able to integrate if
Haemonetics were to allow it.

Internal BECS Systems

As it became clear that software was going to have a large impact on the plasma industry
and the overall collections process, many collectors started developing their own BECS
solutions. The extent to which these efforts succeeded have significantly diverged. At the
start many companies had their own systems. In particular, Grifols and BioLife were two
of the many companies that took the approach of building out their own capabilities.

Grifols called their tool GNS (Grifols Network System) and BioLife called it DIS (Donor
Information Systems). Both companies are still using these tools to various degrees of
depth throughout their organizations. Given Grifols’ general strategy of growth through
acquisition, they have acquired companies that use other software solutions, most notably
Haemonetics NexLynk and DMS solutions. It is unclear going forward whether Grifols will
move all collections onto one platform or continue to have them separate in order to have
leverage over multiple vendors.

For BioLife, they currently only utilize their internal system, DIS across their entire fleet of
centers which makes them unique in the industry for having a home-grown continuously
operating BECS system. Given that BioLife has 23% market share of the source plasma
collections market; this means that they ultimately have a decent share of the software
landscape given their large footprint in the industry. It is possible that other large
companies will develop their own systems in the future, especially CSL, given its recent
decisions to part ways with Haemonetics and move to a company with a less-developed
BECS system at present (Terumo BCT). Given the level of sophistication and capabilities
required to develop a competitive BECS system, few smaller companies are likely to
develop their own system because it would most likely be too costly to pursue and obtain
FDA approval for the system when compared with the potential savings that this move
would provide. That said, given the importance of software in the industry, it is not out of
the question that other collectors beyond CSL might develop their own system in the
coming years.

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A downside of having your own internal systems are the challenges posed by integration
issues. While roll-outs of new collection devices are infrequent, there are routine software
updates. When there is a new update in the software of the BECS system or the hardware,
there is always a risk that the integrations that have worked before will break and that can
paralyze operations across a fleet of centers until it can be resolved. This concentration of
risk is particularly acute if you have only one system and you service it yourself and are
relying on your vendors to help you figure out what changed and how it can be fixed. This
risk of a shut-down is one of the principal reasons why plasma collectors are risk-averse,
as there is limited upside to small improvements but large potential downsides if it goes
wrong. These risks can be mitigated through close collaboration between the collectors
and device manufacturers, however. CSL will certainly have close ties to Terumo BCT as
they will be their only customer in the United States, and BioLife (Takeda) has a close
relationship with Fresenius Kabi given their shared history and how much BioLife’s
business is of Fresenius Kabi’s total US market share.

Potential New Entrants

The Terumo BCT partnership with CSL to enter the United States plasmapheresis device
market may also have an impact on the software side of the business. Since CSL has
exclusively partnered with Terumo BCT in the United States for a period of time, it is
assumed that there are additional goals that Terumo has for the US market. It is possible
and maybe even probable that CSL will develop their own system from scratch to work in
concert with the new Terumo BCT device. CSL signed on with Haemonetics for the
NexLynk software a few years ago, but after they have swapped their fleet out to Rika
devices it is a perfect time to switch from NexLynk DMS usage to their own software. Even
if CSL has no intention of entering the software market, the CSL/Terumo announcement
puts Haemonetics on their back foot and given Mak’s lack of market share, this could lead
to an opening for another company to enter the market or increase the likelihood that
collectors will significantly invest in internal software development and shift to using their
own BECS solution. The latter option is considered most probable for the biggest
collection companies, as they seek to control more aspects of the collection process for
cost containment and planning purposes.

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11. Plasma Sample Testing

Sample testing is a key step when collecting plasma. There are various FDA requirements
when assessing donor eligibility and product safety. Testing is an important point in the
supply chain with significant cash flow and production volume implications if it is not
done correctly or efficiently. This section will outline these issues along with an assessment
of the vendors active in the testing space.

Importance of turnaround times:

As defined earlier in this report, an applicant donor is someone who has not received two
negative test results for two donations in a six-month interval. These two negative tests
are required for making the donor eligible to become a repeat Source Plasma donor. After
an individual has become a repeat donor, each donated plasma unit must be tested for
several disease markers before it can be sold for fractionation. Some additional testing is
required every 4 months and annually. The test results are desired as fast as possible. This
is particularly important for an applicant donor because if he or she has a disease but
donates multiple times before the test result have been returned, the collector may have
paid all the costs to collect those donations (including donor fees), yet all of the plasma
will need to be destroyed if the test results are found to be positive. Thus, getting the test
results back as soon as possible is critical.

Beyond the applicant donor issue, testing is a critical tool in inventory management and
ultimately in cash flow for a center. Getting back the test results for repeat donors as fast
as possible is also a key determinant because once the test results are back, and they are
negative for all the tested diseases, the plasma can be shipped for fractionation. The
fractionator had a “60-day hold” rule set by the FDA to help ensure product safety by
providing added protection at the manufacturing stage to allow for retrieval of single
units of Source Plasma prior to preparation of the manufacturing pool (where thousands
of plasma donations are combined into one pool). In April 2020, this 60-day hold period
was shortened to 45 days in response to the shortage in plasma supply due to the COVID-
19 pandemic. Since the abatement of the pandemic, this revised 45-day hold has
remained. It is not known if this change from 60 to 45 days will officially be made
permanent going forward, but if there are no product safety issues seen due to this
change, it is likely to stay at 45 days given the efficiency it allows. For a collector, the hold
period is not important as an invoice is usually submitted once the plasma is shipped to
the fractionator regardless of the hold. From a cash flow perspective, if sample test results
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are not received quickly, the cost to collect will have already been paid but there would
be no ability to receive revenue for that batch collected as it cannot be sold. There is also
only so much space in freezers on site at a plasma center to hold plasma waiting for test
results to come back. Depending on the volume of a center and the size of its freezers,
there may not be enough space to store all product collected if there is a testing backlog.
This bottleneck is a potential problem for any collection center and may impact its ability
to continue operating. This problem is particularly acute as centers shrink their footprints
and have less freezer room and capacity given the recent focus on cost-efficiency.

Description of the testing process:

Once a donation comes into the lab immediately after the donation, the lab technicians
draw some plasma from the bottle and/or spins down the whole blood samples to send
off for testing. The sample shipments are typically done in temperature-controlled boxes
with ice packs inside. It is important that all samples remain at a certain temperature
throughout the shipment process. If a sample does not stay within a certain temperature
range or it is contaminated, the vendor may not be able to test it anymore and a donor
must come back in to donate again or come back in to give a sample only donation-
something that can be difficult to obtain. Most centers send these samples to the testing
vendor daily though some hold it for 24 hours before sending or batch the sample
shipments after the weekend. Test results are then transmitted back to the collection
center either via automated software directly into the collectors’ BECS system, or via email
in PDFs. The vast majority of collectors have moved to receiving test results using the
automated BECS system of their choosing (DMS, NexSys, Mak, etc.), not PDF files.

It is also important to note that for all testing, the ranges that are considered acceptable
are established by the testing company and the assays/testing equipment they use. The
acceptable ranges then usually flow through to each collection company’s individual
SOP’s. For example, the regulations may say that a donor must have a “normal gamma”.
The specific range is established by the lab. This is important because a lab may change
the range which would then impact all SOP’s for a collection company. In the past, Qualtex
changed the range that was acceptable. This change required that each of their customers
adjust their SOPs to reflect this change and train their staff accordingly. This can be a
heavy burden depending on the fleet size of each collector, and so it is avoided if possible.

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Average turnaround times and Required Tests:
Based on our survey, in the US the average turnaround time for sample results is 6 days
with a range of 3 to 9 days. This is down from an average of seven days in 2020. Serum
protein electrophoresis (SPEP or SPE) tests which are required for new/applicant donors
and every four months thereafter have longer turnaround times than viral marker tests
(VMT) and nucleic acid tests (NAT), which are required for every donation no matter the
donor type.

New/applicant donors must be tested for Syphilis, HIV, Hepatitis (A, B, and C) and have
their protein and hemoglobin levels tested. This additional level of testing is required
every four months thereafter. The SPEP/SPE test measures total protein levels. These
donors also have the routine VMT and NAT tests conducted to test for HIV, Hepatitis, and
Parvo B19. Most fractionators also require antibody screening either annually or quarterly
though some collectors conduct these every four months. Conducting the test every four
months, while slightly more expensive since it is done more often, eliminates the risk of
missing the annual donation testing date.

Regardless of how many times a donor has donated, VMT and NAT tests are required for
HIV, Hepatitis, and Parvo B19 for every donation. At the start of the screening process,
donors also have their finger pricked to draw a drop of blood which is tested to identify
total protein and hematocrit levels to make sure they are in an acceptable range.

If a donor ever tests positive for any of the above disease tests, they will be permanently
deferred (they will not be able to donate plasma again at any other center in the future),
and that unit cannot be used for fractionation. Once a positive result is received, a back-
up sample of the donation will be sent out to the lab for a confirmatory test to eliminate
the possibility of a false positive. Regardless of if that confirmatory test shows it was a
true positive or not, that donor will remain deferred. If the confirmatory test comes back
positive, at that point, the donor will be counseled by the Center the next time they come
in to let them know they tested positive and to seek medical advice and treatment.

The volume of plasma used in the donation for a repeat donor’s sample testing depends
on the collector and/or fractionator and what they require from a testing perspective
(some collectors have two back-up samples that they keep with the donation, while others
have one). Typically for a repeat donor there are three three-milliliter samples drawn out
of the main donation bottle with the total usable donation volume going down by 9
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milliliters total. Two samples are sent for testing, one for viral marker testing (VMT) and
the other for nucleic acid testing (NAT). The final sample is kept as a back-up sample. This
lost volume is not factored into the cost to collect or the volume listed on the bottle. For
an applicant donor, there is no additional sample volume requirement as the serum is
taken from whole blood and does not come out of the donation plasma bottle.

Samples must make it to the lab where it is being tested within a set period or else it will
be invalidated. The timeframe is set by each testing vendor according to the FDA license
for their test kits and shipment boxes they use. For many of those surveyed, the limit is
usually 72 hours from leaving the plasma center. Samples are shipped in special
temperature-controlled boxes, usually provided by the testing vendor. The boxes are
rated and validated to keep the samples at a certain temperature for set period. This can
impact how long it can take for a sample to get to the lab for testing. Temperature
requirements for samples are set by the testing kits and the vendors and vary by vendor.
Centers either freeze the samples to send to lab the next day or they send them to the
lab the day they are collected without freezing. To limit the risk that it will go out of range
it is usually best practice to freeze the samples then send them out the next day as it gives
some additional time before spoiling depending on the validated numbers of the shipping
box.

Testing Vendors

QualTex
QualTex is one of the largest independent, nonprofit testing laboratories in the United
States for blood and plasma products. The company is headquartered in San Antonio,
Texas, with a second testing facility in Norcross, Georgia. This was done to help ensure
business continuity and protect against the supply chain issues that are outlined in the
next section. QualTex is the largest independent vendor in the industry and conducts
millions of tests each year. Over the last five years, the company has undertaken significant
efforts to upgrade their capabilities and increase throughput and speed of their testing
offerings all while automating much of the process and integrating with as many of the
automated software systems as possible. In particular, QualTex new ACCELERATOR a3600
Laboratory Automation System has been implemented and put into operation in both
testing locations. This has improved turnaround times by on average 1 to 3 days according
to customers. The communication has also improved between the centers and QualTex.
However, some collectors have reported some incidents upon roll out over the last three
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years whereby the turnaround time increased dramatically. These problems are generally
worked out within two weeks, but this can have pile on affects for the collectors. The
causes of these problems are discussed below. QualTex has all requisite regulatory
approvals to conduct all testing required by plasma collectors.

Internal Testing capabilities

Given the importance of testing in a collector’s supply chain, many large companies have
opted to invest in their own internal testing capabilities. This follows much the same
rationale as the decision to develop their own automation BECS software given testing’s
critical nature although it is much easier to keep some testing capacity with a third party
supplier whereas a BECS system should be used across all a company’s centers. The
companies who have internal testing capabilities are often those vertically integrated
companies that also fractionate the plasma they collect. Still, there will always be a desire
to have at least some testing volume going to a third party as diversification can help
mitigate supply chain issues. Based on conversations with several industry experts, it is
likely that most fractionators/collectors will move to add or expand their own testing
capabilities to varying degrees of scale in the coming years. This is primarily to ensure that
they have at least some testing capacity in the case of a catastrophic failure of a vendor
and to save money by utilizing their lower cost internal testing capabilities instead of
paying more for third party vendors. The four largest collectors in the US (CSL, Grifols,
BioLife, and Octapharma) have their own testing capacity, while most other collectors do
not.

The main downside to internal testing beyond concentration risk is turnaround time if all
volume is going through the company’s own testing capacity. Third party testing vendors
usually have the fastest turnaround times given their significant investments in the latest
testing and supply chain technologies, and need to keep their customers happy.

National Genetics Institute (NGI)/ LabCorp

NGI was one of the first testing vendors in the industry and the company has been active
in the plasma industry for 25 years. NGI was the first FDA approved vendor for NAT testing
specifically for HIV and HCV. For a number of years, they were one of the only NAT service
providers. In the mid 1990’s, NGI had a major disruption in their testing supply chain. This
caused a cascading set of problems that led to a considerable delay in product releases,
even causing some plasma to be destroyed. Due to this, almost all collectors shifted away
from using NGI for testing. This led some companies to develop their own testing
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capability as described above and opened the door to companies like QualTex to enter
the space. NGI’s market share has shrank to a very small percentage at present. More
recently, the company has invested in both staff and capabilities to try and win back some
of this business. Given how important trust is in the plasma industry, it is a tall order for
the company to win back a large piece of market share, and if they do, they will likely
need to offer some pricing concessions and focus on new collectors entering the market.
A relative strength of NGI has is that it is owned by Labcorp which is financially strong
and maintains close relationships with the manufacturers of testing equipment and all
required assays. This may enable NGI to undercut QualTex and collectors’ internal testing
capabilities on pricing. NGI currently offers the full range of testing required by all plasma
collectors.

Creative Testing Solutions (CTS)

CTS has five high volume donor testing laboratories located in United States. The
company is the largest nonprofit blood testing organization in the US. The CTS labs are
located near Charlotte, Dallas, Phoenix, Portland, St. Louis, and Tampa. All CTS labs are
FDA registered and hold current certifications for the Clinical Laboratory Improvement
Act (CLIA) as well as accreditation with the AABB, EU and numerous state licenses. The
organization offers all testing required by source plasma collectors. In December 2022,
CTS announced a new partnership with Grifols whereby CTS will assume responsibility for
operations of Grifols’ three testing facilities in San Marcos, TX, Austin, TX, and Memphis,
TN. The harmonization of the eight laboratories across both companies’ fleets will be a
multiyear, phased approach to allow time to evaluate improvement opportunities, gather
input from team members, develop plans and implement the new partnership. CTS
continues to be owned by the American Red Cross, Vitalant, and OneBlood, and the CTS
Board of Directors will retain governance over the expanded organization.

Testing costs and Sensitivity to regulatory changes:

As was discussed in the price section of the report, the cost for testing each donation is
on average was$23.50 per liter with a range of $15 to $28 per liter in 2022. It is the fourth
most expensive cost component and represents 11.3% of the total cost of collecting a liter
of plasma. Those on the low-end of the range had the highest sample volume processed
by their own internal testing facilities. Those on the high-end of the range, either did not
have their own internal testing capacity, they had comparatively low volumes (none of the
largest 4 collectors) or relied solely on third party vendors to do their testing.

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The other determinant of a collector's position in the testing cost range is the overall
proportion of applicant/4-month donors in a company's donor pool. It generally costs
between 25% to 35% more to test applicant and 4-month donors than a regular repeat
donor. The number of applicant donors can be impacted by the number of new centers
opened and/or scaled up by a collector, and by the loyalty of a collector’s donor base (the
higher the loyalty rate of donors, the fewer new donors will be needed to fill each center).
For example, if a center is ramping up quickly because they just opened or they have been
having success with a new donor incentive, their costs will be higher than centers that
have a steady, loyal donor pool without many new donors. Given the relatively high
percentage represented by testing within the overall cost of a liter of plasma, this variance
is significant.

Beyond internal vs. third party testing, and the number of new donors, volume plays a big
part in the price collectors pay for their testing. As with most businesses, large companies
have a relatively high negotiating power with their vendors as they can demand price
concessions in exchange for high volume commitments. This is certainly the case in the
plasma industry. If Grifols, CSL or BioLife ask for reasonable pricing concessions, it is hard
for the testing vendor to decline, since they know that the company could bring additional
testing volume in-house. In contrast, given the limited number of testing vendors , a small
collector does not have many options and is likely to pay at the higher end of the per liter
price range for testing services.

Furthermore, testing is largely driven by regulatory requirements set by the FDA and other
regulatory bodies. It is possible that changes to the requirements could significantly
impact the price of testing. For example, the PPTA is looking to get the FDA to eliminate
the syphilis test which is still part of the required testing for applicant donors and repeat
donors every four months. If the FDA agreed to eliminate this requirement, it would save
an average of $1 per initial donation and every four months thereafter. If the FDA decided
to require each donation to be tested for additional diseases, it would increase the cost
of testing overall and increase turnaround times.

Suggested Process changes:

A few key collectors interviewed said there was broad interest in changing one key aspect
to the process. One of the most challenging operational components surrounding testing
is due to the Serum protein electrophoresis (SPEP or SPE) test. For an SPE/SPEP test, a
tube of whole blood must be drawn at the start of the donation. Once this is done, when
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the sample reaches the lab, it must sit and coagulate, a lab technician then needs to put
it in a centrifuge, spin it down, then pipet off the serum to send to the testing vendor. This
is such a long, operational procedure and the process widely diverges from the other
samples which are taken from the plasma after a donation is completed. If the SPE test
could be eliminated and all samples for testing could be taken from plasma that would
be more efficient and cost saving for all collectors. Apparently, FDA regulations
acknowledge the use of plasma protein electrophoresis (PPE) to be permitted instead of
SPEP/SPE. However, there is a different scale to identify the acceptable range, and it is
likely that the FDA would need to get comfortable with this change. Specifically, changing
to PPE changes how companies are able to determine donor suitability (the
aforementioned acceptable range). The core issue with using PPE over SPEP/SPE is that
SPEP/SPE serum has fibrinogen while plasma collected by PPE does not. Thus, the test has
to be recalibrated when there is no fibrinogen, a major change in the testing process for
companies used to doing it a specific way. This, along with the process changes and
resultant training requirements, is likely the reason why all collectors have not made this
change. Importantly, if collectors do not have their own testing capabilities, their testing
vendors must also be comfortable with and be able to accommodate this shift. CSL
Behring has written a white paper and submitted it to the FDA for review, an initiative
which could encourage this change.

Causes of delays in testing

As discussed above, spikes in turnaround times are a recurring problem and a risk for
plasma collectors and the broader plasma industry. It is important to understand what
causes these delays:

Vendor-caused delays:
Collectors are at the mercy of their testing vendors/internal testing groups to ensure that
results are received in a timely fashion. Contracts are also written to help collectors ensure
that a certain turnaround time is met. Usually, testing vendors run well under the required
contractual threshold. If disruptions occur, such as a natural disaster or a global pandemic,
the turnaround times can be much longer and cause a significant set of cascading
problems at the center. Based on our survey, these vendor-based issues have been caused
by staffing issues at the vendor level, misplaced samples, mishandled samples and issues
with the vendors’ testing machines. Since there are not many vendors in the space, these
sorts of issues can compound across the entire industry and cause a broader hold up of
plasma across the country. High volumes collected by the large companies have also had
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the effect of concentrating these kinds of issues. Vendors are taking concrete steps to
protect against these scenarios by automating the process as much as possible and
increasing capacity. Still this risk remains and will continue to cause disruptions at times.

Seasonal/shipping issues:
As is observed with annual winter weather that wreaks havoc across the country, any sort
of natural disaster threatens to throw the entire supply chain into disarray. Since
temperature, speed, and a set turnaround are all part of the equation, if the transport of
samples is delayed, the likelihood that some will be lost or become unusable goes up. It
also means that samples could arrive all at once from many collection centers; this will
have the same compounding affect and cause delays as the testing facility can only
process so many samples per day. Since testing vendors often run at high capacity, their
ability to accommodate these surges is diminished. Turnaround times can also eb and
flow based on the time of year. Around the winter holidays there is a surge both in the
packages being shipped in the United States and the busiest collection time of the year.
This can push up turnaround times by one to four days.

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12. Debit Card Vendors/Donor Compensation Payments

There has been much discussion in this report about donor incentives and how they have
increased over time, particularly following the start of the COVID19 pandemic at the
beginning of 2020. This section will discuss how these incentives are distributed to donors.
Up until approximately 20 years ago, all donor incentives were distributed in cash. After a
donation was completed, the donor would go up to a payment window where a
receptionist or someone sitting in the lab would pay them their amount after checking
that the unit looks good and after confirming all paperwork. This system proved to be a
serious liability. First from a tracking/accountability standpoint, a company could not
always be sure that the correct amount was being paid. There was also a risk that the cash
would be lost, misplaced or stolen. Another potential safety risk was that a significant
amount of cash stored at a location with lax security could make it a target for crime. The
rise of card-based payments, specifically pre-paid debit cards, has opened a new avenue
to distributing donor incentives that removed the problems of cash payments. For the
past 10 years, the majority of all donor compensation has been paid out on pre-paid debit
cards.

The process for debit card use is simple. At the end of a donor’s first donation, they are
issued a debit card which they will use going forward. Normally, the first card they are
given is free. At the end of that first donation and after each subsequent donation
completed, all donor incentives/compensation will be loaded onto the card.

Business models:
The two main prepaid card vendors have several revenue streams that impact how they
operate in the space. The main business model for these prepaid card vendors is that as
donors use their cards, they are charged fees out of their balance to use the cards is
specific ways. For example, there may be particular ATMs where donors can withdraw cash
or get cash back from a purchase transaction at a store without penalty. With other ATM’s
however, donors may incur a fee. This is highly dependent on the card agreements each
vendor has with the plasma collectors and which the donors sign up for at the time of
their first donation.

Another main revenue stream for the prepaid card vendors is direct payments from the
collectors themselves, either per card or per center. This will typically lower the costs for
the donors and also allow collectors additional insights into their donors spending
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behavior. This is also used in situations where the payment vendors administer certain
loyalty programs for the collectors.

Software integration:
In order to provide the most seamless service to both the collector and the donor
receiving the incentive, the payment vendors have invested time and money to integrate
with a number of systems as well as build their own capabilities. First, the automated
systems discussed earlier in this report integrate with both major prepaid card vendors in
the field. With all the latest versions of the BECS systems available today, virtually
everything is automated. This means that as donors finish their procedure, based on the
donor schema set up in the system, it will tell the system how much to pay the donor. This
amount will then be loaded onto the donor’s card. This automation prevents the majority
of mistakes in this process. Many collectors differentiate incentives based on donor weight
or whether they are a new, or repeat donor. If a donation is successfully completed, the
algorithm used by the system will automatically calculate the amount to pay the donor.
In some of the older BECS systems, or centers that are not yet fully automated, a lab tech,
receptionist, or payments specialist may still need to log into the payment vendors
website in order to make the payments. While the latter process does eliminate cash and
the safety concerns discussed above, it still opens up the risk that the individual
responsible for making payments onto the cards will either make mistakes or divert funds.
This is just another incentive for collectors to upgrade to the latest version of software
solutions available in the market, regardless of the software vendor used.

In the fully automated environments, these payments are mostly completed in less than
a second of processing time, a real operational benefit for collection centers. Under the
old manual process, donors had to queue either at the lab or near reception to wait for
confirmation and then for the center employee to enter the amount and pay it. This was
a bottleneck in the process that was completely eliminated in the latest version of the
automated systems.

Customer Support:
Plasma donors want to make sure they are compensated the correct amount as well as
check their balances as they use their debit cards. This is an aspect that collection centers
understandably do not want to manage or deal with. Both main vendors in the space take
on the management of this matter and offer a number of tools for donors to utilize. First
there is a customer service phone number for donors to call and check balances, and deal
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with any issues that arise from usage etc. The second product offered is a general online
tool/app for donors to utilize which has the same general functionality/features as the
customer service line (with some enhancements). These two offerings are key from a
customer relationship standpoint. This allows collectors to effectively outsource the
management of both the back-end and front-end of this critical piece in the donation
process while also creating a uniform branding and experience (most debit cards issued
are branded with the collector’s logo, color scheme etc.). Many donors have not had credit
cards before and this opens up the possibility of shopping online, etc. It also is a marketing
platform for the collectors as donors use their debit cards in the community. Sometimes,
a debit card kiosk is placed at the center by the payment processers, allowing donors to
check their balances on-the-spot.

Vendors:
Two main vendors operate in the space: Paysign (formerly 3Pea) and Onbe (formerly
Syncapay/Wirecard). They both have roughly similar offerings, as described below.

Onbe (Formerly Syncapay, Wirecard North America, and Citi Prepaid Card Services)
This company has the longest history in the space and has gone through a number of
M&A transactions. Citi Prepaid Card Services, which operated in the plasma business, was
sold to the German payments company Wirecard in June 2016 in order to enter the US
market. In the midst of Wirecard’s accounting scandal and downfall in 2019, Wirecard
North America sought to distance itself from its parent company and pursued a sale soon
after the accounting irregulates were reported. Wirecard North America was sold into a
new company, Syncapay that was formed by a combination of Wirecard North America,
North Lane, and daVinci Payments in October 2020 for an undisclosed sum. After that,
the company was sold to Onbe for an undisclosed sum. The company has operated in the
space from the earliest days of the prepaid debit card use in the plasma industry. They
have all of the products and attributes listed above along with unique cash-back and other
loyalty programs that they administer for their collection customers. This program allows
for their customers to drive loyalty by providing cash rebates for everyday spending
activity. This is similar to promotions that are offered on a variety of personal credit cards.
This ends up being an addition incentive that the donor receives and increases the overall
compensation for the donors though usually this does not come out of the collector’s
pocket but rather the vendor where the purchase is being made.

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Paysign
The company was formerly known as 3PEA International, Inc. and changed its name to
PaySign, Inc. in April 2019. PaySign is based in Henderson, Nevada and provides prepaid
card products and processing services. They operate in a number of different industries
with their largest being payment solution for source plasma collection centers. Paysign
entered the space in 2011 when the company discovered collectors were struggling to
find new solutions with technological prowess with several big players monopolizing the
field. By late 2011, Paysign had developed an exclusive relationship with a series of
collection centers owned by the same collector. The company quickly recognized the
uniqueness of the field and doubled down on learning the intricacies of the plasma
collection industry. By 2014, Paysign offered industry solutions with customizable value-
added services focused on the main objectives of increasing donor frequency and donor
retention. For example, they began providing an in-center kiosk, where donors could
check their account history and balance, as well as locate the nearest surcharge-free ATM.
This increased overall donor satisfaction and removed the burden placed on center staff
to answer card-related questions. Currently, Paysign works with more than 12 plasma
collectors and their subsidiaries.

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13. Shipment and Storage

Once plasma is collected it must be maintained at a strict maximum temperature

throughout the rest of the value chain. This is critical for product safety and to make sure
that the proteins contained in the plasma do not degrade. Given the unique needs of this
supply chain, it is a challenge for collectors and fractionators to manage the flow of
plasma from a network of plasma collection centers scattered throughout the United
States to a few fractionation facilities in disparate areas of the country or across the globe,
depending on the fractionator. Each fractionator only has a few fractionation sites across
the country or in other countries given the extremely high CAPEX cost of building out
these facilities, which is discussed in other Marketing Research reports in great detail.

Regulatory requirements:
The most important regulatory requirement for the shipment and storage vendors is the
temperature requirement for source plasma. For most fractionators, the product must
remain at -20 degrees Celsius or colder throughout the value chain once it is frozen
following donation. Collectors, shipment, and storage vendors must have documentation
that shows the product has remained at the required temperature, called “cold chain
logistics.” The weakest point in the process is when the product is on the truck going from
the center to the storage facility/fractionation site, as a number of events can significantly
delay the transportation of the plasma or the trucks themselves can encounter functional
problems. The FDA has a slightly less stringent policy than the fractionators, allowing the
product to remain frozen but dip above minus 20 degrees Celsius for less than 72 hours,
however it can never go above negative five degrees Celsius at any point.

The other regulation that has an important impact on shipment and storage is the “45-
day hold” rule (previously 60 days). This is a provision set out by the FDA to help ensure
product safety. This first started as a PPTA QSEAL program but then was added to the
FDA regulation. The hold standard was established as an added protection at the
manufacturing stage to allow for retrieval of single units of Source Plasma prior to
preparation of the manufacturing pool (where thousands of plasma donations are
combined into one pool). Compliance with this standard allows for the retrieval of units
as a result of post-donation information (information that was not known at the time of
donation) that would have disqualified the donor had it been known at the time of
donation. Post-donation information could include anything from delayed admission of

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high-risk behavior, becoming reactive for HIV, HBV or HCV, or providing new information
about international travel.

As previously mentioned, in April 2020, this 60 day hold period was shortened to 45 days
in response to the shortage in plasma supply due to the COVID-19 pandemic. The
updated FDA guidance states that fractionators can “…release Source Plasma donated by
paid donors and determined to be suitable for further manufacturing into injectable
products after a quarantine hold of 45 calendar days, instead of 60 calendar days,
provided all other donor eligibility and donation suitability requirements are met.” It is
not known if this change from 60 to 45 days will be made permanent, but the hold is
currently 45 days and if there are no product safety issues seen due to this change, it is
likely to stay at 45 days going forward.

Logistics:
Inherently, the movement and storage of source plasma is a logistical problem. As
discussed in the introduction to this section, it is the flow of plasma from the centers to a
central storage facility or fractionation plant with a storage facility attached. It may stay
at the storage facility for a number of months, even years in excess plasma scenarios. In a
shortage of plasma situation, once a unit is released from its current 45-day hold (60 day
hold previously), it will go quickly to the fractionation plant. It is important to note that
source plasma has a shelf life of 10 years though most fractionators typically prefer to
fractionate the product within 1 to 2 years following collection. This is mostly due to the
amount of inventory the companies want to hold, but also due to accounting practices
and matching inventory costs to cost of goods sold.

The vendors who serve this part of the value chain manage a complex schedule of pick-
ups and drop-offs. For example, a freezer truck leaves a storage facility on a Monday, does
a 5-day loop to centers across 5 different US states and then returns back with the product
and puts it in storage. Where the plasma is stored and delivered is up to the policies of
each individual collector and fractionator.

Vendors:
While some collectors/fractionators have spent time and money building their supply
chain logistics capabilities, they typically rely on third-party logistics companies to help
them move and store their plasma. There are two main cold chain transportation/logistics

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vendors that serve the plasma industry, who are both listed below and work with a wide
array of collectors/fractionators.

BioPharma Logistics (BPL)

Bio Pharma Logistics focuses on temperature-sensitive pharmaceutical products. Their
services include both transportation, warehousing (receipt and storage), packing and
shipping to domestic and international destinations and inventory management. Their
team has been providing domestic transportation, storage and distribution of Frozen
Plasma and Finished Goods as well as international air and ocean freight forwarding and
import customs brokerage services for more than 40 years. Bio Pharma Logistics is a full-
service provider and is registered with the FDA, certified by the GHA and cGMP compliant.
Their service offerings include customer support services, domestic and international
transportation, warehousing, distribution, and real-time reporting tools. The company
only handles plasma, pharmaceuticals, biopharmaceuticals and temperature sensitive
products which is a differentiator compared to other shipment/storage vendors who may
service a multitude of industries and customers. It is smaller than the other main vendor
with similar offerings.

RxCrossroads (now owned by McKesson)

In November 2017, McKesson purchased RxCrossroads from CVS Health for $735M.
RxCrossroads has worked in the plasma space for many years and while it does not
exclusively focus just on temperature-controlled pharmaceutical products, it has deep
experience in third party logistics. RxCrossroads has been a leader in technological
solutions for collectors which has expanded under the ownership of McKesson. McKesson
itself is a large pharmaceutical logistics company with thousands of employees and is
responsible for transporting many medicines and biologic products around the country.

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14. Marketing

Given the increasingly competitive nature of the plasma collections industry as

highlighted throughout this report, there are just three main levers for collectors to pull
to increase collections:

- The first is to build more centers, thus creating additional reach and addressable
donor population.
- The second is to increase the donor compensation so that more people will be
incentivized to donate at center level, including new demographics of people
interested in donating.
- To enhance and ensure the payoff of the investment in the first two, it is necessary
to raise awareness of donating plasma through advertising or marketing to
potential donors about the benefits of donating.

In years past, the third component (advertising and marketing) has been of less concern
for collectors as lower levels of competition made it less critical to raise awareness of a
center’s existence or compensation levels. As competition increased, the need for
collectors to market and differentiate themselves or get in front of a broader, more diverse
market in geographies they serve has become more critical. To that end, plasma collectors
are spending more money on marketing and developing resources to help them direct
this investment.

General Marketing organizations of collectors:

Most marketing spend for large collectors is directed at the corporate and regional levels
of the larger collectors. Since marketing goes hand-in-hand with donor incentives, which
are set at these higher levels, it makes sense they would be linked. This corporate function
has become increasingly important over the last 5 years as competition has increased in
many markets for the same donor population. Many times, the desire to spread the word
about higher donor incentivizes to bring people in.

The specialized nature of marketing today with the shift to online marketing as the
dominant channel has increased the disparity of those collectors that invest in marketing
talent vs outsourcing it or continuing practices that may have worked in the past but in
today’s competitive environment end up falling short. These sorts of decisions will be

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more and more critical in the coming years as competition for donors increases in many
local markets.

Channels to Market
There are two broad channels to market that currently exist. The first is the “traditional
marketing” channels that have been around for a long time – Print, TV, Radio, Billboard
etc. The second is the emergent channels that are ascendent across the world due the
reach of mobile/digital platforms but also their ability to target particular audiences with
high specificity. This includes the ability to choose the target audience for the ads and the
metrics to measure how much they have been viewed. The attribution factor that these
new channels allow for is very important.

Traditional marketing: Print, Billboard, Radio, TV:

Traditional marketing for general awareness marketing has been around for decades.
While it educates a market and gives information about a particular industry or the
benefits offered by a particular plasma center, it is difficult to attribute ad spend to any
new donor traffic. For example, imagine a billboard on a busy highway. If someone sees
it and ultimately donates plasma at the center advertised, the only way a collector can be
sure the individual came in because of the billboard is if a collector asks the donor and
they self-volunteer that they learned about the company via a billboard. Even then a
collector can never really be sure if that is why a donor came in to donate. This is the
broader problem with traditional advertising; the return on investment is very unclear and
non-quantifiable. It also tends to be expensive when compared with the online platforms,
costing thousands of dollars for a single highway billboard run of a month, with a range
of $1000 to $14,000 but most costing $5,000 to $10,000 per month for well-placed
billboards. For TV ads in 2020, the cost is $5 to over $30 per thousand viewers on local
television stations for a 30-second advertisement, with most prices for cities where plasma
centers are located in the $12 to $20 range. For a 30-second radio advertisement, the cost
is $75 to over $300 per airing, with most cities with high plasma collection in the $75 to
$150 range.

Online platforms (Facebook, Google, etc.):

This is the future of advertising for plasma collectors for several reasons. This can be seen
with the vast sums that companies like Google, Facebook, and now even Amazon take in
as revenue to advertise to the huge audience sets that use their platforms. Each company,
Google, Facebook, Trade Desk etc., have their own unique approach to advertising but
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they all allow for varying degrees of targeted advertising. Since these companies know so
much about their users beyond even demographic data- think of the likes and dislikes of
their users, their knowledge enables the companies to tailor the messaging for certain
subsets of people. For the plasma industry, the main demographic would be groups that
would be motivated to do something to collect up to $500 per month in additional
income. There is a wider debate in the country about if this approach is good for society
and of potential harm along with possible privacy protections for consumers but that is
still forthcoming. In both plasma and other industries, it is likely that marketing spend will
continue to flow from traditional channels to online due to the latter’s targeting
capabilities.

The attribution advantage cannot be overstated. Beyond truly targeting an ad, advertisers
can see the efficacy of an ad and measure their return on ad spend. For example, if a
company spend $1,000 dollars and ultimately 100 people donate plasma, they know that
there is a $100 cost of acquisition and can plan marketing spend, and donation volume
accordingly to reach optimal levels of donation for the cost. This is virtually impossible for
traditional advertising channels.

Driven by the increasing competition in the plasma industry, most collectors have shifted
from a primarily traditional advertising strategy to one increasingly reliant on the online
platforms. This has led collectors to be at cutting edge of new marketing channels as
opposed to being a late adopter. Based on MRB’s survey for this report, collectors
reported an average cost per lead of $75 in marketing spend with a range of $40 to $95.
This up from about $65 per lead in 2020. Where a company ended up on this range was
highly dependent on if centers were located in competitive areas and the overall potential
donor pool in the general vicinity of a center. Those in an area with either many plasma
centers, or no plasma centers paid the most for leads. Those with many centers in the area
obviously had to compete with each other for the same donors and thus had the cost per
lead go up. The reason for centers with no competition in the area having a higher cost
per lead is generally because there is no developed market and collectors must spend
additional money advertising and explaining the process of plasma donation (general
awareness campaigns) instead of focusing on a donor pool that is well accustomed to and
aware of the plasma industry. Those on the low end of the range are in locations with one
or two other collectors close by.

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Appendix: Plasma Collection Organizations

Independent Collections Companies

These are companies primarily focused on collecting plasma and do not have their own
fractionation capacity/assets.

ImmunoTek BioCenters, LLC

3900 N. Causeway, Suite 1200
Metairie, LA 70002
Phone: (504) 648-4138 www.immunotek.com

In 2012, the former management of International BioResources (IBR) formed a new

company called ImmunoTek BioCenters, LLC and acquired all the assets of IBR. These
assets included all intellectual property used to operate a plasma collection company,
such as the FDA-approved Standard Operating Procedures (“SOPs”), Training Manuals,
New Center Development Plans, etc. ImmunoTek helps fractionators and others locate,
design, and build new plasma centers. ImmunoTek opened its first plasma center in 2014.
For a few years, Immunotek’s business model was to develop centers for clients and then
sell it to them once they reached a certain maturity in collection volume. In the last few
years, however, the company has shifted to owning and operating the centers they
develop, and selling the plasma directly to fractiontors. As of the end of 2022, the
company had 39 centers, 19 of which were under their brand “Freedom Plasma”, which is
their centers which collect plasma for themselves, not on the basis of partner fractionation
company. The Freedom Plasma division started in 2021.

B-Positive Plasma
500 NJ-38
Cherry Hill, NJ 08002
Phone: (856) 438-5581
www.bpositivetoday.com

Since its inception in 2012, B-Positive Plasma has operated two large collection centers in
New Jersey and a third in Maryland. The Maryland center was sold to Takeda in March
2019 and the other two were sold to ABO in 2021. Since 2021, the company has opened
8 centers as of the beginning of 2023, with more in development. The new centers are
mostly small centers with lower capacity than traditional centers.
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Parachute Plasma
2605 Clarksville Street
Paris, TX 75460
(903) 202-1770
https://www.joinparachute.com/

Parachute is a new enterprise building out plasma centers across the United States. It has
a focus on establishing smaller scale centers in smaller geographic areas that are not
traditionally served by other large collectors. The company is tech enabled/focused and
has built out their own app for donors. As of March 2023, Parachute had 8 centers, with
more in development.

TrueHealth
23-04 Broadway
Fair Lawn, NJ 07410
https://thplasma.com/

TrueHealth is a new entrant to the plasma collection market. As of the beginning of 2023,
the company had two centers, both in New Jersey.

Olgam Life
1209 Orange Street
Wilmington, DE 19801
Phone: (718) 691 5921
https://olgam.com/

Olgam Life is another new entrant to the plasma collection market. They are focusing
primarily on building in the New York City Metropolitan area which until recently did not
have any plasma centers due to restrictive New York regulations. As of March 2023, the
company has five centers.

Access Biologicals, LLC (Also known as Saturn Biomedical)

995 Park Center Dr.
Vista, CA 92081
Phone: (760) 931-8444
www.accessbiologicals.com
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Access Biologicals operates a center collecting plasma for research and diagnostics, as
well as some source plasma for the industry. The company sold its center to Grifols in
2022.

Southern Blood Services, Inc.

1114 17th Avenue South Suite 104
Nashville, TN 37212
Phone: (615) 342-0180
www.southernbloodservices.com

Founded in 1999, Southern Blood Services is a specialty plasma collection company which
collects anti-D and rabies plasma in its three centers (2 in Alabama and 1 in Tennessee).

Hemarus, Inc.
11925 Beach Blvd, Suite 212
Jacksonville, FL 32246
Phone: (904) 642-1005
www.hemarusplasmaus.com

Hemarus operates three centers in Florida. The company is affiliated with a fractionation
facility in India, also named Hemarus.

Other private independent plasma collection organizations include:

• Scantibodies Biologics Inc. operates one center in California. It collects plasma for
specialty products.
• Secure Transfusion (also known as Trusting Heart Blood Center) operates one
center in Edina, Minnesota.
• Bulldog Biologic operates 1 center in Milledgeville, Georgia.
• Continental Blood Bank operates two centers in Miami, Florida.
• Life Plasma operates 1 center in Reading, Pennsylvania.
• Pelican Plasma operates 1 center in Shreveport, Louisiana.
• Proesis plasma operates 1 center in Dallas, Texas.

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Collections Companies who are part of Integrated Fractionators
Vertically integrated fractionation companies that have both collection centers/assets and
fractionation capacity/assets and sell the licensed therapies they produce.

ABO Plasma
230 Main Street
Suite 1650
Irvine, CA 92614
Phone: (949) 932-0259
https://aboplasma.com/

ABO is the plasma collection arm of GC Biopharma in the United States. ABO purchased
two centers from B Positive Plasma in 2021 and opened and third in Orem, Utah. They
had 3 centers at the end of 2022. This is a replacement division for United States source
plasma for GC Biopharma after they sold 11 centers (called GCAM) to Grifols in 2022.

ADMA Biologics
465 RT 17
South Ramsey, NJ 07446
www.admabiologics.com

In 2019, ADMA operated one plasma center that provided source material for the
manufacture of its existing and future products. By the start of 2023, ADMA was operating
a total of 9 with one more under development. The plasma supports its Boca Raton, FL
fractionation facility.

BPL Plasma
71 S. Bedford Rd
Mt. Kisco, NY 10549
Phone: (718) 479-3300
www.bplplasma.com

BPL Plasma (formerly known as “Life Resources” and earlier, “DCI Biologicals”) operated
51 plasma centers at the end of 2020. In 2002, the British Department of Health acquired
DCI/Life Resources to procure US source plasma for Bio Products Laboratory (BPL) its
fractionation plant north of London. The Life Resources’ plasma centers were renamed

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Plasma Resources UK (PRUK), then BPL Plasma. In 2016, the CREAT Group, a Chinese
investment group, acquired BPL, including its US plasma centers. In 2019, Grifols bid for
25 of the BPL’s plasma collection centers, and the deal, which had been held up due to
concerns about plasma donors’ privacy was approved by the US government and closed
in February 2021. In 2022, the remaining 26 centers were purchase by the London-based
private equity group Permira and combined with the assets of Kedrion.

BioLife Plasma Services (Takeda, formerly Shire/Baxalta/Baxter)

1435 Lake Cook Road
Deerfield, IL 60015
Phone: (847) 940-5199
www.biolifeplasma.com

Between 1996 and 2003, Baxter acquired a number of plasma centers from various
companies (Immuno, Alpha Therapeutic, Sera-Tec) and renamed its plasma division
"BioLife".

As of the end of 2022, BioLife operated 192 centers in the United States. Additionally, the
company collected plasma in Europe within several countries which allow private
compensated plasmapheresis. For several decades, BioLife has fractionated all of the
American Red Cross recovered plasma, in the framework of ten-year agreements, the
latest of which was renewed in 2015.

Grifols Plasma
2410 Lillyvale Avenue
Los Angeles, CA 90032
Phone: (800) 421-0008
www.grifols.com

By March 2023, Grifols Plasma, now a separate entity from Biomat, operated a total of 291
plasma centers when including the wholly owned subsidiaries Biomat, IBB, Biotest Plasma
and GCAM.

Over the past twenty years, Grifols has acquired a number of plasma centers from
independent and fractionators-owned companies: SeraCare, PlasmaCare, Talecris,
Cangene, Interstate Blood Bank, Biotest Pharmaceutical (in 2019) and GCAM (in 2020).
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Additionally, in February 2021, Grifols acquired 25 more centers from BPL. In August 2018,
Grifols acquired Biotest USA and its subsidiary Biotest Pharmaceuticals for $286 million.
The deal included 24 plasma centers and an office building in Boca Raton, FL. The Federal
Trade Commission required Grifols to divest three centers located respectively in Lincoln,
NE, Augusta, GA and Youngstown, OH where the company would have had a monopoly
of plasma collections. These centers were acquired by Kedrion, which merged them into
KedPlasma, its plasma collection arm.

Additionally, in 2018 Grifols acquired Haema, a German blood and plasma collection
organization and opened several new plasma centers in Germany. The company has
centers in the Czech Republic and Hungary. In 2023, Grifols announced plans to close 32
of their collection centers in a cost cutting move. There are also no immediate plans to
continue expanding the center fleet this year.

CSL Plasma
5201 Congress Avenue
Boca Raton, Florida 33487
Phone: (865) 771-5452
www.cslplasma.com

CSL Plasma was established in 2001 by CSL Ltd. when it acquired 47 plasma collection
centers from Nabi. Until the pandemic started in 2020, CSL Plasma had opened new
plasma centers in the US at the highest rate in the industry and though in the past few
years Takeda (BioLife) and Octapharma have grown their center counts faster. Together
with BioLife, the CSL Plasma centers are among the most efficient in the industry in terms
of annual collections per center. As of December 2022, CSL Plasma operated 319 plasma
centers in the United States.
CSL Plasma was known as "ZLB Plasma" until May 2009, "Aventis BioServices" until 2004,
and "Plasma Alliance" in prior years.

KedPlasma
19265 Vanowen Street
Reseda, CA 91335
Phone: (818) 342-0100

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As of the beginning of 2023, Kedrion Plasma operated 33 plasma centers in the United, a
number that rose to 35 by March 2023. In 2012, Kedrion acquired a plasma center from
Ortho Clinical Diagnostics to produce anti-D plasma to manufacture RhoGAM, Rh
immune globulin. In 2022, Kedrion was purchased by the private equity firm, Permira and
combined with BPL with the new combined entity keeping the name Kedrion.

LFB USA
175 Crossing Blvd.
Framingham, MA 01702
Phone: (508) 370-5100
https://lfb-usa.com/

LFB USA is a company within the LFB Group, a French biopharmaceutical company that
produces and markets plasma derived therapies. Within the LFB Group, LFB USA is a
development, manufacturing and services provider to LFB S.A. in France focusing on
collecting Source Plasma for fractionation. LFB currently operates five centers in the
United States at the end of 2022, having acquired them largely through a contract with
Immunotek.

Octapharma Plasma
3525 Whitehall Park Drive
Charlotte, NC 28273
Phone: (704) 654-4600
www.octapharma.com

Over the past few years, Octapharma acquired a number of plasma centers and plasma
collection companies (Life Therapeutics, Serologicals International BioResources) and now
operated 167 plasma centers in the US at the end of 2022 and a few dozen in Europe. By
March 2023, it had 170 centers. It also buys recovered plasma from blood centers and
organizations in Europe and the US, such as Blood Centers of America (BCA), and Vitalant.

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