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Item 1. Business

2021-05-26 compared with 2020-05-20 · 199 added, 122 removed, 270 unchanged (54% of the section changed)

Company Overview

Haemonetics is a global healthcare company dedicated to providing a suite of innovative hematology products and solutions to customers to help improve patient care and reduce the cost of healthcare.

Our technology addresses important medical markets including blood and plasma component collection, the surgical suite, and hospital transfusion services.

Haemonetics is a global healthcare company dedicated to providing a suite of innovative medical products and solutions for customers, to help them improve patient care and reduce the cost of healthcare.

Our technology addresses important medical markets:

blood and plasma component collection, the surgical suite and hospital transfusion services.

When used in this report, the terms “we,” “us,” “our” and “the Company” mean Haemonetics.

Blood is essential to a modern healthcare system.

Blood and its components (plasma, platelets and red cells) have many vital and frequently life-saving clinical applications.

Blood and its components (plasma, red cells and platelets) have many vital and frequently life-saving clinical applications.

Plasma is used for patients with major blood loss and is manufactured into biopharmaceuticals to treat a variety of illnesses, including immune diseases and coagulation disorders.

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Platelets have many uses in patient care, including supporting cancer patients undergoing chemotherapy.

Haemonetics develops and markets a wide range of devices and solutions to serve our customers.

Our Plasma business unit provides plasma collection devices and disposables and plasma donor management software that enable the collection of plasma used by biopharmaceutical companies to make life saving pharmaceuticals.

Our Blood Center business unit offers blood collection and processing devices and disposables for red cells, platelets and whole blood as well as related donor management

software that make blood donation more efficient and track life giving blood components.

Our Hospital Business unit, which is comprised of Hemostasis Management, Cell Salvage and Transfusion Management products, includes devices and methodologies for measuring the coagulation of blood that enable healthcare providers to better manage their patients’ bleeding risk, as well as surgical blood salvage systems, specialized blood cell processing systems and disposables and blood transfusion management software that facilitate blood transfusions and cell processing.

Market and Products

Product Lines

We view our operations and manage our business in three principal reporting segments:

Plasma, Blood Center and Hospital.

We believe that Plasma and Hospital have growth potential, while Blood Center competes in challenging markets that require us to manage the business differently, including by reducing costs, shrinking the scope of the current product line, and evaluating opportunities to exit unfavorable customer contracts.

For that purpose, “Plasma” includes plasma collection devices and disposables, plasma donor management software, and anticoagulant and saline sold to plasma customers.

“Blood Center” includes blood collection and processing devices and disposables for red cells, platelets and whole blood.

“Hospital”, which is comprised of Hemostasis Management, Cell Salvage, Transfusion Management and Vascular Closure products, includes devices and methodologies for measuring coagulation characteristics of blood, surgical blood salvage systems, specialized blood cell processing systems and disposables, blood transfusion management software and vascular closure devices.

Financial information concerning these segments is provided in Note 18 to our audited consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K.

We believe that Plasma and Hospital have growth potential, while Blood Center competes in challenging markets that require us to manage the business differently, including reducing costs, shrinking the scope of the current product line, and evaluating opportunities to exit unfavorable customer contracts.

Market and Products

Product Lines

The following describes our principal products in each of our segments.

Our Plasma business offers automated plasma collection and donor management software systems that improve the plasma centers’ yield, efficiency, quality, safety and overall plasma donor experience.

Our Plasma business offers automated plasma collection and donor management software systems that improve the yield, efficiency, quality, safety and overall donor experience at plasma collection centers.

We continue to invest in technology that lowers the overall cost to collect plasma while maintaining high standards of quality and safety.

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The markets for transfusion plasma and source plasma have different participants, product requirements and growth profiles.

We serve the market for transfusion plasma through our Blood Center products.

We serve the market for plasma that is processed into pharmaceuticals through our Plasma business, and we serve the market for transfusion plasma through our Blood Center business.

One of the distinguishing features of the source plasma market is the method of collection.

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The second is as part of an apheresis procedure that also collects another blood component.

These two methods are mainly used by blood centers

to collect plasma for transfusions.

These two methods are mainly used by blood centers to collect plasma for transfusions.

The third method is a dedicated apheresis procedure that only collects plasma and returns the other blood components to the donor.

This third method is mainly used for source plasma collection.

Our Plasma business unit focuses on the collection of source plasma by pharmaceutical manufacturers using apheresis devices that collect plasma and software solutions that support the efficient operation of dedicated source plasma collection centers.

Our Blood Center business unit supports the collection of plasma for blood collectors, such as the American Red Cross, using both whole blood and multi-component apheresis collection devices and software solutions that support efficient operation of these types of centers.

Over the last 20 years, the collection of source plasma has increasingly been done by vertically integrated biopharmaceutical companies such as CSL Behring, Grifols S.A.

("Grifols"), Octapharma AG and Takeda's BioLife business.

With their global operations and management expertise, these companies are focused on efficient plasma supply chain management and leveraging information technology to manage operations from the point of plasma donation to fractionation to the production of the final product.

Demand for source plasma has continued to grow as an expanding end user market for plasma-derived biopharmaceuticals.

In particular, therapies that require a significant quantity of plasma to create has fueled an increase in the number of donations and dedicated source plasma collection centers.

Our Plasma business unit focuses on the collection of source plasma by pharmaceutical manufacturers using apheresis devices that only collect plasma and software solutions that support the efficient operation of dedicated source plasma collection centers.

Our Blood Center business supports the collection of plasma for blood collectors, such as the American Red Cross, using both whole blood and multi-component apheresis collection devices.

Over the last 20 years, the collection of source plasma has increasingly been done by vertically integrated biopharmaceutical companies such as CSL Limited (together with its affiliates, “CSL”), Grifols S.A.

(together with its affiliates, “Grifols”), Octapharma AG and Takeda's BioLife Plasma subsidiary.

With their global operations and management expertise, these companies are focused on efficient plasma supply chain management and leveraging information technology to manage operations from the point of plasma donation through fractionation to the production of the final product.

Demand for source plasma has continued to grow because of an expanding end user market for plasma-derived biopharmaceuticals.

In particular, therapies that require a significant quantity of plasma to create have fueled an increase in the number of donations and dedicated source plasma collection centers.

A significant portion of this growth has occurred in the United States with U.S.

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has regulations that are significantly more favorable relative to other markets for plasma collectors.

The frequency with which a donor may donate, the volume of plasma that may be donated each time and the ability to remunerate donors are all optimal in the U.S., leading to approximately 80% of worldwide source plasma collections occurring in the U.S.

The frequency with which a donor may donate, the volume of plasma that may be donated each time and the ability to remunerate donors are all optimal in the U.S., leading to over 70% of worldwide source plasma collections occurring in the U.S.

Plasma collectors have long sought changes to plasma collection regulations outside of the U.S.

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As a result, we aim to design equipment that is durable, dependable, and easy to use and to provide comprehensive training and support to our plasma collection customers.

Today, the vast majority of plasma collections worldwide are performed using automated collection technology at dedicated facilities.

Today, nearly all source plasma collections worldwide are performed using automated collection technology at dedicated facilities.

We offer multiple products to support these dedicated source plasma operations, including our NexSys PCS ® and PCS2 ® plasmapheresis equipment, related disposables and intravenous solutions.

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In fiscal 2018, we received U.S.

Food and Drug Administration ("FDA") 510(k) clearance for our next generation device, the NexSys PCS and for the enhancement of our NexSys PCS embedded software that activates YES TM technology, a yield-enhancing solution that enables increases in plasma yield per collection by an additional 18-26 mL per donation, on average.

We also received CE mark clearance of the NexSys PCS device in the European Union and Australia, subject to additional local requirements, during fiscal 2018.

We expect to pursue further regulatory clearances for additional enhancements to the overall product offering.

Food and Drug Administration (“FDA”) 510(k) clearance for our next generation device, the NexSys PCS and CE mark clearance of the NexSys PCS device in the European Union, or EU, and Australia, subject to additional local requirements.

NexSys PCS is designed to enable higher plasma yield collections, improve productivity in our customers’ centers, enhance the overall donor experience and provide safe and reliable collections that will become life-changing medicines for patients.

NexSys PCS includes bi-directional connectivity to the NexLynk DMS donor management system to improve operational efficiency within plasma centers, through automated programming of donation procedures and automated data capture of procedure data.

The NexSys PCS capabilities enable collections with higher plasma yields.

Our YES TM technology is a yield-enhancing solution that enables increases in plasma yield per collection by an additional 18-26 mL per donation, on average.

In fiscal 2021, we received FDA 510(k) clearance for our NexSys PCS with Persona ® technology.

NexSys PCS with Persona technology uses a percent plasma nomogram that customizes plasma collection based on an individual donor's body composition.

The new, proprietary Persona technology strengthens the NexSys PCS value

proposition and reinforces our commitment to supporting the plasma industry.

We expect to pursue further regulatory clearances for additional enhancements to the overall product offering.

We have entered into long-term commercial contracts and are continuing the rollout and support of NexSys PCS devices and NexLynk DMS donor management software for these Plasma customers.

Our Plasma business unit represented 38.2%, 46.4% and 44.1% of our total revenue in fiscal 2021, 2020 and 2019, respectively.

• Blood Center

Our Blood Center business offers a range of solutions that improve donor collection centers' ability to acquire blood, filter blood and separate blood components.

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Blood Center Products — We offer automated blood component and manual whole blood collection systems to blood collection centers to collect blood products efficiently and cost effectively.

In addition, we offer software solutions that help blood collection centers with blood drive planning, donor recruitment and retention, blood collection, component manufacturing and distribution.

• We market the MCS ® brand apheresis equipment which is designed to collect specific blood components from the donor.

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• Our portfolio of disposable whole blood collection and component storage sets offer flexibility in collecting a unit of whole blood and the subsequent production and storage of blood components, including options for in-line or dockable filters for leukoreduction.

Our SafeTrace ® and El-Dorado Donor ® donation and blood unit management systems span blood center operations and automate and track operations from the recruitment of the blood donor to the disposition of the blood product.

Our Hemasphere ® software solution provides support for more efficient blood drive planning and Donor Doc ® and e-Donor ® software help to improve donor recruitment and retention.

Our Blood Center business unit represented 35.3%, 32.1% and 34.1% of our total revenue in fiscal 2021, 2020 and 2019, respectively.

H ospitals are called upon to provide the highest standard of patient care while at the same time reduce operating costs.

Haemonetics' Hospital business has three product lines - Hemostasis Management, Cell Salvage and Transfusion Management - that help decision makers in hospitals optimize blood acquisition, storage and usage in critical settings.

Hospitals are called upon to provide the highest standard of patient care while at the same time reduce operating costs.

Haemonetics' Hospital business has four product lines which include Hemostasis Management, Cell Salvage, Transfusion Management and Vascular Closure.

Vascular Closure became a product line during fiscal 2021 as a result of the March 2021 acquisition of Cardiva Medical, Inc.

(“Cardiva”), a market leader in vascular closure devices.

Each product line has a leading market position and a mission of helping hospitals and clinicians provide the highest standard of patient care while at the same time reducing operating and procedural costs and helping decision makers in hospitals optimize blood acquisition, storage and usage in critical settings.

Hemostasis Management

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Hemostasis Management Products — Our portfolio of hemostasis diagnostic systems enables clinicians to assess holistically the coagulation status of a patient at the point-of-care or laboratory setting.

We have three device platforms that we market to hospitals and laboratories as an alternative to routine blood tests:

the TEG ® 5000 hemostasis analyzer system, the TEG 6s hemostasis analyzer system, and the ClotPro ® hemostasis analyzer system (acquired in April 2020).

We have four viscoelastic testing systems that we market to hospitals and laboratories as an alternative to routine blood tests:

the TEG ® 5000 hemostasis analyzer system, the TEG 6s hemostasis analyzer system, the ClotPro ® hemostasis analyzer system, and the HAS-100 hemostasis analyzer system.

While the TEG and HAS platforms utilize thromboelastography and the ClotPro system utilizes thromboelastometry, all of the platforms provide a method of testing the efficiency of blood coagulation using whole blood samples.

Each hemostasis diagnostic system consists of an analyzer that is used with single-use reagents and disposables.

In addition, TEG Manager ® software connects multiple TEG 5000 and TEG 6S analyzers throughout the hospital, providing clinicians remote access to both active and historical test results that inform treatment decisions.

In addition, TEG Manager ® software connects multiple TEG 5000 and TEG 6S analyzers throughout the hospital, providing clinicians with remote access to both active and historical test results that inform treatment decisions.

The TEG 5000 system is approved for a broad set of indications in all of our markets.

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The ClotPro system received CE mark clearance in March 2019 and is currently available in select European and Asia Pacific markets.

The HAS-100 device is currently commercialized in China.

Cell Salvage Market — The Cell Salvage market is mainly comprised of devices designed to transfuse back a patient’s own blood during or after surgery.

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The software is designed to work with blood storage devices, including the BloodTrack HaemoBank ® .

Vascular Closure

Vascular Closure Market — Catheter-based, minimally invasive alternatives to open surgery have transformed cardiovascular medicine.

The majority of these procedures gain access to the vascular system through the femoral artery or vein.

These access sites in the vessel require closure post procedure.

Even with the major advances in technology over the last 40 years, the most common complications in coronary and peripheral procedures are still related to the access site.

Manual compression, the traditional standard of care, involves the application of pressure in order to facilitate the formation of a blood clot at the access site.

Vascular closure devices improve upon manual compression by rapidly closing the access site and facilitating more efficient workflow.

Vascular Closure Products — The VASCADE ® technology platform was developed to address the limitations of manual compression and existing vascular closure devices.

Our VASCADE family of products consists of two devices, VASCADE and VASCADE MVP ® , which share a common, innovative technology that features a simple, catheter-based delivery system and leverages the natural clot-inducing properties of collagen.

This novel design significantly reduces access site complications, increases patient satisfaction and improves hospital workflow metrics that, in turn, drive economic benefits and cost savings.

Our Vascular Closure devices address the growing number of catheter-based coronary, peripheral and electrophysiology procedures that require vascular access site closure each year.

Designed around an easy to use, catheter-based delivery system and the natural clot-inducing properties of collagen, our VASCADE product is the only marketed vascular closure device clinically proven to both increase workflow efficiency and reduce access site complications relative to manual compression for coronary and peripheral procedures.

Similarly, our VASCADE MVP device is the only marketed vascular closure device clinically proven and labeled to improve workflow relative to manual compression for electrophysiology procedures.

Importantly, these improvements drive meaningful cost savings for hospitals, ambulatory surgery centers, and other treatment facilities.

Our Hospital business unit represented 24.2%, 19.6% and 19.9% of our total revenue in fiscal 2021, 2020 and 2019, respectively.

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ensure that protocol variations are incorporated to closely match local customer requirements.

In addition, Haemonetics maintains software development operations in Canada and France.

In addition, Haemonetics maintains software development operations in Canada.

Customer collaborations are also an important part of our technical strength and competitive advantage.

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Innovations resulting from these various engineering efforts enable us to develop systems that are faster, smaller and more user-friendly, or that incorporate additional features important to our customer base.

In fiscal 2020 , research and development resources were allocated to support innovation across our portfolio, including investments in clinical programs for our Hemostasis Management product line.

A key element of our strategy in the U.S.

for our Hemostasis Management product line has been to invest in clinical trials to support expanded FDA labeling including a trauma indication for our TEG 6s.

In May 2019, we received FDA clearance for the use of TEG 6s in adult trauma settings.

This clearance builds on the current indication for the TEG 6s system in cardiovascular surgery and cardiology procedures, making it the first cartridge-based system available in the U.S.

to evaluate the hemostasis condition in adult trauma patients.

In November 2019, we announced global commercial availability for the four-channel TEG 6s PlateletMapping ® ADP & AA assay cartridge, which is used by clinicians to assess a patient’s bleeding and thrombotic risk due to inhibition of platelet function caused by anticoagulants such as aspirin.

In December 2019, we also announced the North America commercial availability for the next generation of SafeTrace Tx Transfusion Management Software.

In fiscal 2021, research and development resources were allocated to support innovation across our product portfolio.

In October 2020, we announced FDA clearance for our NexSys PCS ® with Persona ® technology.

In April 2020, we also announced the commercial availability of the next generation of SafeTrace Tx Transfusion Management Software in the United Kingdom.

This software version features significant improvements to the user experience and workflow efficiency.

Additionally, we continue to invest resources in next generation plasma collection and software systems.

Additionally, we have continued to make investments related to our next generation plasma collection and software systems, the European Medical Device Regulation, our Hemostasis Management produce line, and our recent product acquisitions in Hospital.

Manufacturing

We endeavor to supply products that are both high quality and cost competitive for our customers by leveraging continuous improvement methodologies, focusing on our core competencies and partnering with strategic suppliers that complement our

capabilities.

In general, we design our equipment and consumables and use contract manufacturers to build the devices, while the majority of consumables are manufactured by us.

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Contract manufacturers also supply component sets and liquid solutions according to our specifications and manufacture in Mexico, Japan, Singapore, Thailand and the Philippines.

Our devices are principally manufactured in Malaysia, Australia and the U.S.

Our capital equipment is principally manufactured in Malaysia, Australia and the U.S.

Plastics and other petroleum-based products are the principal component of our disposable products and can be affected by oil and gas prices.

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However, the standards for international protection of intellectual property vary widely.

We cannot assure that pending patent and trademark applications will result in issued patents and registered trademarks, that patents issued to or licensed by us will not be challenged or circumvented by competitors, or that our patents will not be determined invalid.

We cannot assure that pending patent and trademark applications will result in issued patents and registered

trademarks, that patents issued to or licensed by us will not be challenged or circumvented by competitors, or that our patents will not be determined invalid.

To maintain our competitive position, we also rely on the technical expertise and know-how of our personnel.

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In addition, we face competition from several large, global companies with product offerings similar to ours.

Terumo BCT and Fresenius SE & Co.

Terumo Blood and Cell Technologies (“Terumo BCT”) and Fresenius SE & Co.

KGaA, in particular, have significantly greater financial and other resources than we do and are strong competitors in a number of our businesses.

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In the field of plasma related software, MAK Systems is the primary competitor along with applications developed internally by our customers.

In April 2021, Terumo BCT and CSL announced a collaboration to deliver a new plasma collection platform for CSL's U.S.

collection centers.

This potential new entrant to the market is undergoing a clinical trial and will require FDA device clearance prior to use in the U.S.

• Blood Center

Most donations worldwide are traditional manual whole blood collections and approximately 30% of the Blood Center portfolio competes in this space.

We face intense competition in our whole blood business on the basis of quality and price.

Our main competitors are Fresenius, MacoPharma and Terumo.

Our MCS automated component blood collections, which represents approximately 65% of the Blood Center portfolio, not only compete against the traditional manual whole blood collection market (particularly in red cells) but also compete with products from Terumo and Fresenius.

Our main competitors are Fresenius, MacoPharma and Terumo BCT.

Our MCS automated component blood collections, which represents approximately 60% of the Blood Center portfolio, not only compete against the traditional manual whole blood collection market (particularly in red cells) but also compete with products from Terumo BCT and Fresenius.

Technology is the key differentiator in automated component blood collections, as measured by the time to collect more than one unit of a specific targeted blood component.

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Therefore, both Haemonetics and our competitors continue to experience downward pressure on collection through single platelet collection procedures.

In Blood Center software, MAK Technologies is a competitor along with systems developed internally by our customers.

Our software portfolio is predominately a U.S.

based business.

Hemostasis Management

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The TEG analyzer competes with these routine laboratory tests based on its ability to provide a more complete picture of a patient's hemostasis at a single point in time and to measure the clinically relevant platelet function for an individual patient.

In addition, TEG and ClotPro systems compete more directly with other advanced blood test systems, including ROTEM ® analyzers, the VerifyNow ® System and HemoSonics Quantra™.

In addition, TEG and ClotPro systems compete more directly with other viscoelastic testing systems, including ROTEM ® analyzers, the VerifyNow ® System and HemoSonics Quantra™.

ROTEM and VerifyNow instruments are marketed by Instrumentation Laboratory, a subsidiary of Werfen.

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There are also additional technologies being explored to assess viscoelasticity and other characteristics that can provide insights into the coagulation status of a patient.

In the advanced viscoelastic testing segment, Haemonetics is the global market leader.

In the intraoperative autotransfusion market, competition is based on reliability, ease of use, service, support and price.

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BloodTrack integrates with the hospital’s existing lab or blood bank system allowing for greater market acceptance.

Vascular Closure

The vascular closure industry is highly competitive and has been evolving rapidly with the introduction of new products, technologies, regulations and activities of industry participants.

Our VASCADE family of products serves as an alternative to existing methods of femoral vascular access site closure in interventional procedures, including manual compression and other femoral access closure devices.

Our main competitors in femoral access closure for coronary and peripheral procedures include Terumo BCT, Abbott Laboratories and Cardinal Health.

There are not currently any competing vascular access site closure devices that are labeled for electrophysiology procedures that require multiple access sites.

We compete primarily on the basis that our products are optimized for the requirements of coronary, peripheral and electrophysiology procedures, including procedures that require multiple access sites.

In addition, our value proposition is supported by robust clinical trial evidence and study data, which demonstrate reduced access site complication rates as well as workflow improvements compared to manual compression that lead to cost savings.

Significant Customers

In fiscal 2021, 2020 and 2019, our ten largest customers accounted for approximately 49%, 54% and 52% of our net revenues, respectively.

In fiscal 2020 , 2019 and 2018 , two of our Plasma customers, CSL Plasma Inc.

("CSL") and Grifols, each were greater than 10% of total net revenues and in total accounted for approximately 27% , 27% and 26% of our net revenues, respectively.

Additionally, one of our customers accounted for greater than 10% of our Blood Center segment’s net revenues in fiscal 2020 , 2019 and 2018 .

Two of our Plasma customers, CSL and Grifols, each were greater than 10% of total net revenues and in total accounted for approximately 23%, 27% and 27% of our net revenues in fiscal 2021, 2020 and 2019, respectively.

In addition, a third customer accounted for greater than 10% of the Plasma segment's net revenues, but did not exceed 10% of total net revenues in fiscal 2021, 2020 and 2019.

One customer accounted for greater than 10% of our Blood Center segment’s net revenues, but did not exceed 10% of total net revenues in fiscal 2021, 2020 and 2019.

Government Regulation

Due to the variety of products that we manufacture, we and our products are subject to a wide variety of regulations by numerous government agencies, including the FDA, and similar agencies outside the U.S.

Due to the variety of products that we manufacture, we and our products are subject to a wide variety of regulations from numerous government agencies, including the FDA, and similar agencies outside the U.S.

To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of our products.

In the United States, medical devices, drugs, and biological products are subject to extensive regulation by FDA under the Federal Food, Drug, and Cosmetic Act, or FDCA, and other federal and state statutes and regulations.

The failure to comply with applicable U.S.

requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to clear or approve applications, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

Medical Device Regulation

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Unless an exemption applies, all medical devices introduced to the U.S.

market are required by the FDA, as a condition of marketing, to secure either clearance of a 510(k) pre-market notification, de novo authorization, or approval of premarket approval application, or PMA.

The FDA classifies medical devices into one of three classes.

Devices deemed to pose a low or moderate risk are placed in class I or II, which requires the manufacturer to submit to the FDA a 510(k) premarket notification requesting clearance for commercial distribution, unless the device type is exempt from this requirement.

market are required by the FDA, as a condition of marketing, to secure clearance of a 510(k) premarket notification, grant of a request for de novo classification, or approval of a premarket approval application, or PMA.

The FDA classifies medical devices into one of three classes based on risk.

Devices deemed to pose a low or moderate risk are placed in Class I or II.

Manufacturers of most Class II devices, and a few Class I devices, must submit to the FDA a 510(k) premarket notification requesting clearance for commercial distribution.

Devices deemed by the FDA to pose the greatest risk or devices deemed not substantially equivalent to a previously cleared 510(k) device are placed in class III, requiring submission and approval of a PMA or risk-based classification through the de novo process.

The 510(k) clearance, de novo authorization, and PMA processes can be resource intensive, expensive, lengthy and require payment of significant user fees.

To obtain 510(k) clearance, we must submit a premarket notification demonstrating that the proposed device is “substantially equivalent” to a previously 510(k)-cleared device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission of PMAs, or a device that has been the subject of a de novo authorization.

The FDA’s 510(k) clearance pathway usually takes from three to 12 months from the date the notification is submitted, but it can take longer, depending on the extent of the FDA's requests for additional information and the amount of time a sponsor takes to fulfill them.

We may need to first obtain an investigational device exemption (for significant risk devices), known as an IDE, in order to conduct extensive clinical testing of the device to obtain the necessary clinical data for submission to the FDA.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, will require a new 510(k) clearance or could require premarket approval.

Another procedure for obtaining marketing authorization for a medical device is the de novo authorization process.

The de novo process is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

Once a de novo application is reviewed and authorized by the FDA, it results in the device having a Class I or II status and future devices from the company or a competitor may use the device as a 510(k) predicate.

A PMA must be submitted if a device cannot be cleared through the 510(k) clearance process or authorized as a class II device through the de novo process.

A device that cannot demonstrate substantial equivalence to a previously marketed predicate is automatically deemed Class III.

The de novo process provides a pathway to classify novel medical devices for which general controls alone, or general and special controls, provide reasonable assurance of safety and effectiveness for the intended use, but for which there is no legally marketed predicate device.

Once a request for de novo classification is granted by the FDA, the newly classified device may be used as a predicate by the applicant or a competitor in a future 510(k) notification submission, if the FDA determines that new devices of the same type require 510(k) clearance.

Devices deemed by the FDA to pose the greatest risk are placed in Class III.

A PMA is required for most Class III devices.

The PMA process is generally more detailed, lengthier and more expensive than the 510(k) and de novo processes.

To date, we have no PMA approved products and do not have any class III products on our product pipeline.

Prior to the acquisition of Cardiva in March 2021, we had not been required to obtain a PMA for any of our products and did not have any Class III products in our product pipeline.

With the acquisition of Cardiva, we have acquired VASCADE and VASCADE

MVP, which are both Class III products for which PMAs were previously obtained.

The 510(k) clearance, de novo classification, and PMA processes can be resource intensive, expensive, lengthy and require payment of significant user fees.

Postmarket Requirements - U.S.

After the FDA permits a device to enter commercial distribution, numerous regulatory requirements continue to apply.

These include, among others:

The FDA's Quality System Regulation, or QSR, which requires manufacturers, including third party device manufacturers, to follow quality assurance procedures during all aspects of the manufacturing process;

Generally, establishments that design and/or manufacture devices are required to register with the FDA.

They also must provide the FDA with a list of the devices that they design and/or manufacture at their facilities.

Other postmarket requirements include compliance with:

• The Quality System Regulation, or QSR, which sets forth current good manufacturing practice, or CGMP, requirements for medical devices.

The QSR applies to manufacturers, including contract manufacturers, of finished medical devices, and governs methods, facilities, and controls used in designing, manufacturing, packaging, labeling, storing, installing and servicing such devices.

Among other requirements, manufacturers of medical devices must establish a quality system appropriate for the devices they manufacture.

• Labeling regulations, including unique device identification;

Clearance of a 510(k) for certain product modifications;

• Medical device reporting, or MDR, regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur;

Medical device correction and removal (recall) reporting regulations

Additionally, we and the manufacturing facilities of our suppliers are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other applicable regulations described above.

The FDA can issue warning letters or untitled letters, seek a court order detaining or seizing certain devices, seek an injunctions, suspend regulatory clearance or approvals, ban certain medical devices, order repair, replacement or refund of those devices and require notification of health professionals and others with regard to medical devices that present risks of substantial harm to the public health.

The FDA may also initiate action for criminal prosecution of such violations.

• Medical device correction and removal (recall) regulations with their associated reporting obligations.

Additionally, we and the manufacturing facilities of some of our suppliers are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other applicable regulations described above.

The FDA can issue Form 483 Notices of Observation, warning letters or untitled letters, seek a court order detaining or seizing certain devices, seek an injunction, suspend regulatory clearance or approvals, ban certain medical devices, order repair, replacement or refund of those devices and require notification of health professionals and others with regard to medical devices that present risks of substantial harm to the public health.

The FDA may also initiate action for criminal prosecution of violations.

The FDA also may require post market testing, surveillance, or other measures to monitor the effects of an approved or cleared product.

The FDA may place conditions on a PMA-approved device that could restrict the distribution or use of the product.

In addition, quality control, manufacture, packaging, and labeling procedures must continue to conform to QSRs after approval and clearance, and manufacturers are subject to periodic inspections by the FDA.

Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain compliance with QSRs.

The FDA may withdraw product approvals or recommend or require product recalls if a company fails to comply with regulatory requirements.

Advertising, marketing and promotional activities for devices are also subject to FDA oversight.

The failure to comply with the requirements applicable to these activities can result in FDA enforcement action.

Manufacturers of medical devices are permitted to promote products solely for the uses and indications set forth in the approved or cleared product labeling.

Promotion of products for uses not described in the approved or cleared labeling (“off-label” uses) has resulted in enforcement actions against manufacturers, including actions alleging violation of the Federal False Claims Act, federal and state healthcare fraud and abuse laws, and state consumer protection laws.

The failure to comply with prohibitions on “off-label” promotion can result in significant monetary penalties, suspension of sales of certain products, product recalls, civil or criminal sanctions, exclusion from participating in federal healthcare programs, or other enforcement actions.

In the United States, allegations of such wrongful conduct could also result in a corporate integrity agreement with the U.S.

government that imposes significant administrative obligations and costs.

Requirements Outside the U.S.

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Our international sales are subject to regulatory requirements in the countries in which our products are sold.

These regulations will be significantly modified in the next couple of years.

For example, in May 2017, the EU Medical Devices Regulation (Regulation 2017/745) was adopted.

The EU Medical Devices Regulation, or EU MDR, repeals and replaces the EU Medical Devices Directive.

The EU MDR, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the European Economic Area for medical devices and ensure a high level of safety and health while supporting innovation.

Manufacturers of currently approved medical devices will have until May 2021 to meet the requirements of the EU MDR, which reflects the EU’s decision in April 2020 to postpone the implementation date one year due to the impact of COVID-19 .

Once applicable, the new regulations will among other things:

strengthen the rules on placing devices on the market and reinforce surveillance once they are available;

establish explicit provisions on manufacturers’ responsibilities;

improve the traceability of medical devices;

set up a central database to provide comprehensive information on products available in the EU;

strengthen rules for the assessment of certain high-risk devices before they are placed on the market.

In the meantime, the current EU Medical Devices Directive continues to apply.

The corresponding regulation for in vitro diagnostics, the EU In Vitro Diagnostic Devices Regulation (Regulation 2017/746), or EU IVDR, becomes applicable in May 2022.

In the meantime, the current EU In Vitro Diagnostic Directive continues to apply.

For example, the EU has adopted the EU Medical Device Regulation (the "EU MDR") and the EU In Vitro Diagnostic Regulation (the "EU IVDR"), each of which impose stricter requirements for the marketing and sale of medical devices, including in the area of clinical evaluation requirements, quality systems and postmarket surveillance, than the current medical device directives they replace.

The EU MDR is fully applicable as of May 26, 2021, and the EU IVDR as of May 26, 2022.

There is a transition period for devices with a notified body certificate with an expiry date after the date of full application.

However, a new EU certificate under the applicable Regulations must be obtained before that expiry date if there is to be no interruption in manufacturing and supply of devices to the market.

There are nevertheless a number of provisions that need to be complied with from the date of application, including updating the postmarket surveillance process, appointing an importer for the EU, appointing a person responsible for regulatory compliance, and updating economic operator agreements.

Complying with the requirements of these regulations may require us to incur significant expenditures.

Failure to meet these requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

Drug Regulation

Development and Approval

Under the Federal Food, Drug and Cosmetic Act, FDA approval of a new drug application, or NDA, is generally required before any new drug can be marketed in the U.S.

Under the Public Health Service Act, or PHSA, FDA licensure of a biologics license application, or BLA, is required before a biologic can be marketed in the U.S.

NDAs and BLAs require extensive studies and submission of a large amount of data by the applicant.

Under the FDCA, FDA approval of a new drug application, or NDA, is generally required before any new drug can be marketed in the U.S.

NDAs require extensive studies and submission of a large amount of data by the applicant.

A generic version of an approved drug is approved by means of an abbreviated new drug application, or ANDA, by which the sponsor demonstrates that the proposed product is the same as the approved, brand-name drug, which is referred to as the “reference listed drug,” or RLD.

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We currently hold NDAs and ANDAs for liquid solutions (including anticoagulants, intravenous saline and a red blood cell storage solution), which we sell with our blood component and whole blood collection systems.

Post-Approval Regulation

Post-Approval Regulations

After the FDA permits a drug to enter commercial distribution, numerous regulatory requirements continue to apply.

These include the FDA's current Good Manufacturing Practices, which include a series of requirements relating to organization and training of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, quality control and quality assurance, packaging and labeling controls, holding and distribution, and laboratory controls and records and reports.

The FDA has also established labeling regulations, advertising and

promotion requirements and restrictions;

regulations regarding conducting recalls of product and requirements relating to the reporting of adverse events.

These include the FDA's current cGMPs, which include a series of requirements relating to organization and training of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, quality control and quality assurance, packaging and labeling controls, holding and distribution, and laboratory controls and records and reports.

The FDA has also established labeling regulations, advertising and promotion requirements and restrictions;

regulations regarding conducting recalls of product;

and requirements relating to the reporting of adverse events.

Failure to comply with applicable FDA requirements and restrictions in this area may subject a company to adverse publicity, such as warning letters, and enforcement action by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug or biological products.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and entering into agreements with the government that materially restrict the manner in which a company promotes or distributes drug or biological products.

Requirements Outside the U.S.

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The requirements and process governing product licensing vary from country to country.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, warning letters or untitled letters, injunctions, civil, administrative, or criminal penalties, monetary fines or imprisonment, suspension or withdrawal of regulatory approvals, suspension of ongoing clinical studies, refusal to approve pending applications or supplements to applications filed by us, suspension or the imposition of restrictions on operations, product recalls, the refusal to permit the import or export of our products or the seizure or detention of products.

supplements to applications filed by us, suspension or the imposition of restrictions on operations, product recalls, the refusal to permit the import or export of our products or the seizure or detention of products.

Conflict Minerals

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The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false, fraudulent or materially incomplete claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government.

In recent years, companies in the healthcare industry have faced enforcement actions under the federal False Claims Act for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product or causing false claims to be submitted because of the company’s marketing the

product for unapproved and thus non-reimbursable, uses.

False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of tens of thousands of dollars per false claim or statement.

Healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, among other things, imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

In addition, the Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to track and report to the federal government payments and transfers of value that they make to physicians and teaching hospitals and ownership interests held by physicians and their family and provides for public disclosures of these data.

Many states have adopted analogous laws and regulations, including state anti-kickback and false claims laws, which may apply to items or services reimbursed under Medicaid and other state programs or, in several states, regardless of the payor.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, among other things, imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third party payers and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

to the federal government on certain payments or transfers of value that they make to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Beginning calendar year 2021, manufacturers must collect information regarding payments and other transfers of value to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists, and certified nurse-midwives for reporting in 2022.

The reported data is made available in searchable form on a public website on an annual basis.

Failure to submit required information may result in civil monetary penalties.

Several states have enacted legislation requiring pharmaceutical and medical device companies to, among other things, establish marketing compliance programs;

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and international environmental regulations that may present a significant risk to the business, including laws or regulations relating to the manufacture or sale of products using plastics.

As of March 28, 2020 , we employed the full-time equivalent of 3,004 persons.

Human Capital

Our employees are the foundation of our organization, each with their own talents, backgrounds and abilities.

As of April 3, 2021, we employed the full-time equivalent of 2,708 persons.

Approximately 79% of our employees are located in the U.S.

and the remaining 21% are located across 19 other countries.

In our industry, there is substantial competition for key personnel in the regions in which we operate.

Recruiting, developing and retaining talented employees is critical to both our strategy and our ability to compete effectively in the markets we serve.

We are committed to building a collaborative, performance-driven culture that attracts and retains the best talent.

We strive to do this by soliciting employee perspectives, investing in their development, promoting employee health and safety, providing competitive pay and benefits and recognizing that the diversity of our teams and their ideas helps build our culture and strengthens our ability to make our work matter for the customers, patients, donors and healthcare providers who depend on us.

These efforts include:

• Employee Engagement .

We conduct an annual employee engagement survey, with at least 90% global participation since fiscal 2018.

Feedback from these surveys is shared across the organization and informs both Company-sponsored initiatives and shared action plans between managers and direct reports.

• Employee Development .

We offer a variety of programs and resources designed to facilitate our employees’ career development, training and networking, including:

◦ Manager development sessions focused on leadership skills, such as performance management training, coaching and feedback;

◦ Continuous improvement training for colleagues in functions that can best leverage and utilize process improvement practices;

◦ Best-in-class learning management system and dynamic content libraries aimed to meet the individual needs of colleagues’ current and future goals and aspirations;

◦ Tuition reimbursement to support degree programs and certifications.

• Competitive Pay and Benefits .

We offer market-competitive base pay and benefits to our employees around the world.

Most of our employees also have variable components to their compensation that are tied to achievement of corporate and individual performance goals, the fluctuations of our stock price, or a combination of both.

We also offer an Employee Stock Purchase Plan to eligible employees, consistent with our philosophy that compensation should align the interests of employees and shareholders and promote a long-term shareholder perspective.

• Health and Safety .

As a Company, we are also committed to making our workplaces safe and secure.

This includes eliminating unsafe work practices and workplace injuries and illnesses and promoting the health, safety and well-being of all employees, contractors and visitors.

Important objectives in achieving our vision include:

creating a positive safety culture, maintaining an effective safety management system and reducing risk in the workplace.

Our response to the COVID-19 pandemic has focused on business continuity and the safety of our employees.

This includes prioritizing employee safety with remote work and travel restrictions, and limiting exposure for our manufacturing and customer facing employees, including field service and sales teams, to ensure supplies and support for our customers.

• Diversity, Equity and Inclusion .

The diversity of our teams and their ideas helps build our collaborative, performance driven culture.

We understand the value that each individual brings to our workplace, and we are committed to providing an inclusive environment where every individual has the opportunity to thrive.

Additionally, we encourage colleagues with shared interests and affinities to connect and learn from one another.

Availability of Reports and Other Information

All of our corporate governance materials, including the Principles of Corporate Governance, Code of Conduct and the charters of the Audit, Compensation, Governance and Compliance and Technology Committees are published on the Investor Relations section of our website at www.haemonetics.com .

On this web site the public can also access, free of charge, our annual, quarterly and current reports and other documents filed or furnished to the Securities and Exchange Commission, or SEC, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

On this website the public can also access, free of charge, our annual, quarterly and current reports and other documents filed or furnished to the Securities and Exchange Commission, or SEC, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

The SEC maintains an internet site ( http://www.sec.gov ) that contains reports, proxy and information statements and other information regarding issuers that file documents electronically.

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Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future.

Forward-looking statements may be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and other words of similar meaning in conjunction with, among other things:

Forward-looking statements may be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “foresees,” “potential” and other words of similar meaning in conjunction with, among other things:

discussions of future operations;

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regulatory approvals;

impact of planned acquisitions or dispositions;

impacts of acquisitions or dispositions;

market position and expenditures.

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Risk Factors in this report.

The effect of the ongoing COVID-19 pandemic, or outbreaks of communicable diseases, on our business, financial conditions and results of operations, which may be heightened if the pandemic and various government responses to it continue for an extended period of time;

• The effect of the ongoing COVID-19 pandemic, or outbreaks of communicable diseases, on our business, financial conditions and results of operations, including the time it will take for vaccines to be broadly distributed and accepted in the U.S.

and the rest of the world, and the effectiveness of such vaccines in slowing or stopping the spread of COVID-19 and mitigating the economic effects of the pandemic;

• Failure to achieve our long-term strategic and financial-improvement goals;

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• Security breaches of our information technology systems or our products, which could impair our ability to conduct business or compromise sensitive information of the Company or its customers, suppliers and other business partners, or of customers' patients;

Pricing pressures resulting from trends toward health care cost containment, including the continued consolidation among health care providers and other market participants;

The continuity, availability and pricing of plastic and other raw materials, finished goods and components used in the manufacturing of our products (including those purchased from sole-source suppliers) and the related continuity of our manufacturing and distribution;

Our ability to develop new products or enhancements on commercially acceptable terms or at all;

• Pricing pressures resulting from trends toward healthcare cost containment, including the continued consolidation among healthcare providers and other market participants;

• The continuity, availability and pricing of plastic and other raw materials, finished goods and components used in the manufacturing of our products (including those purchased from sole-source suppliers) and the related continuity of our manufacturing, sterilization, supply and distribution;

• Our ability to develop, manufacture and market new products and technologies successfully and in a timely manner and the ability of our competitors and other third parties to develop products or technologies that render our products or technologies noncompetitive or obsolete;

• Our ability to obtain the anticipated benefits of restructuring programs that we have or may undertake, including the Operational Excellence Program;

The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;

• The potential that the expected strategic benefits and opportunities from our acquisition of Cardiva and any other planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;

• The impact of enhanced requirements to obtain regulatory approval in the U.S.

and around the world, including the EU MDR and the associated timing and cost of product approval, and

and around the world and the associated timing and cost of product approval;

• Our ability to comply with established and developing U.S.

and foreign legal and regulatory requirements, including the U.S.

Foreign Corrupt Practices Act, or FCPA, and similar laws in other jurisdictions, as well as U.S.

and foreign legal and regulatory requirements, including FCPA, MDR and similar laws in other jurisdictions, as well as U.S.

and foreign export and import restrictions and tariffs;

• Our ability to meet our debt obligations and raise additional capital when desired on terms reasonably acceptable to us;

• The potential impact of our convertible senior notes and related capped call transactions;

• Our ability to execute and realize anticipated benefits from our investments in emerging economies;

Our ability to retain and attract key personnel;

Costs and risks associated with product liability and other litigation claims;

Our ability to meet our existing debt obligations and raise additional capital when desire on terms reasonably acceptable to us;

• The potential effect of foreign currency fluctuations and interest rate fluctuations on our net sales, expenses, and resulting margins;

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and international tax laws;

Market conditions impacting our stock price and/or share repurchase program, and the possibility that our share repurchase program may be delayed, suspended or discontinued;

• Our ability to protect intellectual property and the outcome of patent litigation;

• Costs and risks associated with product liability and other litigation claims;

• Our ability to retain and attract key personnel;

• Market conditions impacting our stock price and/or share repurchase programs we may enter into from time to time, and the possibility that such share repurchase programs may be delayed, suspended or discontinued.

Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and in Item 1A.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business