What changed in this filing

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Item 1A. Risk Factors

2021-05-26 compared with 2020-05-20 · 217 added, 150 removed, 158 unchanged (70% of the section changed)

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Please refer to the cautionary statements made under the heading “Cautionary Statement Regarding Forward-Looking Information” at the end of Item 1 of this Annual Report on Form 10-K for more information on the qualifications and limitations on forward-looking statements.

The ongoing COVID-19 pandemic, or outbreaks of communicable diseases, could have a material adverse impact on our business, financial condition, cash flows 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 COVID-19 outbreak has significantly impacted economic activity and markets around the world.

If the pandemic continues and conditions worsen, we could suffer a material adverse effect on our business, financial condition, cash flows and results of operations in numerous ways, including, but not limited to, those outlined below:

Risks Related to the COVID-19 Pandemic

The outbreak of communicable diseases could have, and the ongoing COVID-19 pandemic and its related effects are having, a material adverse impact on our business, financial condition, cash flows and results of operations, and we are unable to predict the extent to which COVID-19 and its related impacts will continue to adversely affect our Company and the achievement of our strategic objectives.

The COVID-19 outbreak has significantly impacted economic activity and markets around the world and is negatively impacting our business, financial condition, cash flows and results of operations in numerous ways, including, but not limited to, those outlined below.

We are unable to predict the extent to which COVID-19 and its related impacts will continue to negatively affect our Company, 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:

• Product Demand .

As a result of COVID-19, we have experienced in the fourth quarter of fiscal 2020, and expect to experience more significantly in fiscal 2021, decreased demand for our products and increased volatility in demand for our products.

For example, lower collection volumes at source plasma collection centers due to COVID-19 factors, including stay-at-home and other government orders designed to slow the spread of COVID-19, donor safety concerns, and reduced donor collection capacity due to shutdowns and social distancing requirements, have adversely affected and likely will continue to adversely affect demand for our Plasma disposable products.

Additionally, reductions in elective surgeries and trauma cases, restrictions on vendor access at customer sites and the reallocation of hospital resources to address critical intensive care needs during the COVID-19 pandemic have adversely affected and will likely continue to adversely affect demand for our Hospital products, particularly our Cell Saver and TEG devices.

As a result of COVID-19, we have experienced both decreased demand and increased volatility in demand for our products.

Lower collection volumes at source plasma collection centers due to COVID-19 factors, including stay-at-home and other government orders designed to slow the spread of COVID-19, donor safety concerns, reduced donor collection capacity due to shutdowns and social distancing requirements, and government economic relief programs that may reduce the propensity of people to be donors, have adversely affected and likely will continue to adversely affect demand for our Plasma disposable products.

Additionally, reductions in elective surgeries and trauma cases, restrictions on vendor access at customer sites and the reallocation of hospital resources to address critical intensive care needs during the COVID-19 pandemic have reduced and will likely continue to reduce demand for our Hospital products.

We also have experienced, and may continue to experience, in certain markets rapid and unpredictable changes in demand for some of our Blood Center disposable products as blood collectors seek to replenish their blood product inventories and safety stocks.

Such changes could impact our ability to meet demand on a timely basis or could result in potential reductions in demand in future periods if the supply of blood held by our customers significantly exceeds the demand for blood from hospitals due to declines of elective surgeries and trauma cases.

Finally, we may experience delays in our clinical trials as a result of COVID-19 that may result in delays for new or expanded authorizations for our products, which could adversely affect our development and commercialization plans for our products.

Such changes could impact our ability to meet demand on a timely basis or could result in potential reductions in demand in future periods if safety stock levels in certain markets return to pre-COVID-19 levels or the supply of blood held by our customers significantly exceeds the demand for blood from hospitals due to declines of elective surgeries and trauma cases.

• Manufacturing, Supply Chain and Distribution System Disruption .

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While we have significant sources of cash and liquidity and access to committed credit lines, we may be adversely impacted by delays in payments of outstanding receivables if our customers experience financial difficulties or are unable to borrow money to fund their operations, which may adversely impact their ability to pay for our products on a timely basis, if at all, which in turn would adversely affect our financial condition.

Moreover, conditions in the financial and credit markets could increase the cost of and our accessibility to capital.

If we need to access capital, there can be no assurance that financing may be available on attractive terms, if at all.

These and other impacts of COVID-19 may also have the effect of heightening many of the other risks described in the Risk Factors section of this Annual Report on Form 10-K.

We believe the magnitude of the adverse impact of these factors on our business, financial condition, cash flows and results of operations will be primarily driven by:

the severity and duration of the COVID-19 pandemic;

the severity and duration of the COVID-19 pandemic, including the time it will take for vaccines to be broadly distributed and accepted in the U.S.

and the rest of the world;

the timing, scope and effectiveness of governmental responses to the COVID-19 pandemic and associated economic disruptions;

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economy and the worldwide economy.

Risks Related to our Business and Industry

If our business strategy does not yield the expected results or we fail to implement the necessary changes to our operations, we could see material adverse effects on our business, financial condition or results of operations.

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In fiscal 2021, our two largest Plasma customers each accounted for more than 10% of our net revenues and our ten largest customers accounted for approximately 49% of our net revenues.

If any of our largest customers materially reduce their purchases from us or terminate their relationship with us for any reason, including material decreases in demand for plasma or development of alternative processes, we could experience an adverse effect on our results of operations or financial condition.

Three of our largest Plasma customers have contracts that are subject to renewal before the end of fiscal 2022.

In the event that we do not extend our current contracts or enter into new contracts with these customers on acceptable terms, our revenues and operating income could be negatively impacted in a manner that could have a material adverse effect on our results of operations or financial condition.

In April 2021, one of these customers, CSL, informed us of its intent not to renew its supply agreement for the use of PCS2 plasma collection system devices and the purchase of disposable plasmapheresis kits in the U.S.

following the expiration of the current term in June 2022.

In addition to the anticipated financial impact of the non-renewal of the CSL supply agreement in June 2022, we could experience an adverse effect on our results of operations or financial condition if any of our other largest customers materially reduce their purchases from us or terminate their relationship with us for any reason, including material decreases in demand for plasma or development of alternative processes.

If we are unable to negotiate competitive pricing or generate adequate disposable sales volumes from customers following conversion to our NexSys PCS platform, we may not realize the intended benefits of our investment.

We have focused heavily on the development and commercialization of our NexSys platform, comprised of both the NexSys PCS plasmapheresis system and NexLynk DMS software, and continuous platform innovation as reflected in our receipt of FDA clearance for NexSys PCS with Persona technology during fiscal 2021.

Since the commercial launch of our NexSys platform in fiscal 2019, we have entered into long-term contracts with each of our major customers that provide for conversion to NexSys within some portion of their collection network.

If we fail to receive pricing or generate disposable sales volumes from customers following conversion to our NexSys PCS platform that provide an adequate return on our investment, we may not realize the full intended benefits of our investment.

Defects or quality issues associated with our products could adversely affect the results of operations.

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In some circumstances, such adverse events could also cause delays in regulatory approval of new products or the imposition of post-market approval requirements.

If we are unable to successfully convert customers to our NexSys platform, meet customer placement demands or negotiate competitive pricing, we may not realize the intended benefits of our investment.

We have focused heavily on the development and commercialization of our NexSys platform, comprised of both the NexSys PCS plasmapheresis system and NexLynk DMS software.

Since the commercial launch of our NexSys platform in fiscal 2019, we have entered into long-term customer contracts providing for conversion to NexSys.

However, if additional customers do not adopt NexSys or they do and we are unable to procure sufficient NexySys PCS devices from our contract manufacturers to meet demand or receive a price that provides an inadequate return on our investment, or if such customer adoption does not occur within the expected timeframe, we may not realize the full intended benefits of our investment.

We are increasingly dependent on information technology systems and subject to privacy and security laws and a cyber-attack or other breach of these systems could have a material adverse effect on our business, financial condition or results of operations.

We increasingly rely on information technology systems, including cloud-based computing, to process, transmit and store electronic information for our day-to-day operations and for our customers, including sensitive personal information and proprietary or confidential information.

Additionally, certain of our products collect data regarding patients and donors and connect to our systems for maintenance and other purposes or are actively managed by Haemonetics on behalf of specific customers.

Similar to other large multi-national companies, the size and complexity of our information technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, or other significant disruption.

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Additionally, the legal and regulatory environment surrounding information security and privacy is increasingly demanding, with the imposition of new and changing requirements across businesses.

We are required to comply with increasingly complex and changing legal and regulatory requirements that govern the collection, use, storage, security, transfer, disclosure and other processing of personal data in the United States and in other countries, including, but not limited to, HIPAA, HITECH, the California Consumer Privacy Act, or CCPA, and the European Union’s General Data Protection Regulation, or GDPR.

The GDPR imposes stringent European Union data protection requirements and provides for significant penalties for noncompliance.

The GDPR imposes stringent EU data protection requirements and provides for significant penalties for noncompliance.

HIPAA also imposes stringent data privacy and security requirements and the regulatory authority has imposed significant fines and penalties on organizations found to be out of compliance.

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Accordingly, we are subject to the risks associated with the vendor’s ability to successfully provide the necessary services to meet our needs.

If our vendor is unable to adequately protect our data or information is lost, if our ability to deliver our services is interrupted (including as a result of significant outbreaks of disease, including the ongoing COVID-19 pandemic, natural disasters, strikes, terrorism attacks or other adverse events in the countries in which the vendor operates), if our vendor's fees are higher than expected, or if our vendor makes mistakes in the execution of operations support, then our business and operating results may be negatively affected.

If our vendor is unable to adequately protect our data or information is lost, if our ability to deliver our services is interrupted (including as a result of significant outbreaks of disease, including the ongoing COVID-19 pandemic, natural disasters, strikes, terrorism attacks or other adverse events in the countries in which the vendor operates), if our vendor's fees are higher than expected, if our vendor makes mistakes in the execution of operations support, or if the vendor terminates our relationship, then our business and operating results may be negatively affected.

A significant portion of our revenue derives from the sale of blood collection supplies.

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Continued declines in this market could have a material adverse effect on our liquidity and results of operations.

Consolidation of healthcare providers and blood collectors has increased demand for price concessions and caused the exclusion of suppliers from significant market segments, which could have an adverse effect on our business, financial condition and results of operations.

Consolidation of healthcare providers and blood collectors, healthcare cost containment pressures, government payment and delivery system reforms and changes in private payer policies could decrease demand for our products, the prices which customers are willing to pay for those products and/or the number of procedures performed using our devices, which could have an adverse effect on our business, financial condition and results of operations.

Political, economic and policy influences are causing the healthcare and blood collection industries to make substantial structural and financial changes that affect our results of operations.

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This pressure impacts our Hospital and Blood Center businesses.

The influence of group purchasing organizations in the U.S., integrated delivery networks and large single accounts has the potential to put price pressure on our Hospital business.

Our Vascular Closure devices, for example, are often perceived as physician preference devices with a relatively higher price point compared to certain vascular closure alternatives such as sutures or manual compression, and purchases are commonly made by a hospital only after approval by its value analysis committee.

If a hospital value analysis committee does not approve or revokes prior approval for any of the reasons set forth above, the demand for our vascular closure devices may decrease and we could experience an adverse effect on our results of operations or financial condition.

The influence of integrated delivery networks, group purchasing organizations and large single accounts has the potential to put price pressure on our Hospital business.

It also puts price pressure on our U.S.

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This may exert further downward pressure on the prices of our products and adversely impact our business, financial condition or results of operations.

An interruption in our ability to manufacture our products, obtain key components or raw materials, or the failure of a sole source supplier may adversely affect our business.

An interruption in our ability to manufacture our products, obtain key components or raw materials, or the failure of a sole source supplier or sterilization service provider may adversely affect our business.

We have a complex global supply chain that involves integrating key suppliers and our manufacturing capacity into a global movement of components and finished goods.

We manufacture certain key disposables at single locations with limited alternate facilities.

We manufacture certain key disposables and devices at single locations with limited alternate facilities.

If an event occurs that results in the closure of or damage to one or more of these facilities, we may be unable to supply the relevant products at previous levels or at all for some period.

Additionally, for reasons of quality assurance or cost effectiveness, we purchase certain finished goods, components and raw materials from sole suppliers, notably JMS Co.

Ltd., Kawasumi Laboratories, Leica Biosystems Melbourne Pty.

Ltd., Sanmina Corporation and Sparton Medical Systems Colorado LLC, who have their own complex supply chains.

Additionally, for reasons of quality assurance or cost effectiveness, we purchase certain finished goods, components and raw materials from sole suppliers who have their own complex supply chains.

Any disruption to one or more of our suppliers’ production or delivery of sufficient volumes of components conforming to our specifications, could disrupt or delay our ability to deliver finished products to our customers.

For example, we purchase components in Asia for use in manufacturing in the U.S., Puerto Rico and Mexico.

We source all of our apheresis equipment from Asia and regularly ship finished goods from the U.S., Puerto Rico and Mexico to the rest of the world.

For example, we purchase components in Asia for use in manufacturing in the U.S.

We source all of our apheresis equipment from Asia and regularly ship finished goods from the U.S.

and Mexico to the rest of the world.

Some of our products require sterilization prior to sale or distribution, and we utilize third-party facilities for this process.

If an event occurs that results in damage to or closure, whether temporarily or permanent, of one or more of these facilities, we may be unable to manufacture or sterilize the relevant products at prior levels or at all, and a third party may not be available on a timely basis (if at all) to replace sterilization capacity.

In addition, we manufacture our vascular closure devices under a shelter plan service agreement with Offshore International Incorporated (d/b/a Tetakawi), or Tetakawi, pursuant to which we lease our manufacturing facility in Guaymas, Mexico and Tetakawi is responsible for a number of ongoing services related to the facility, including provision of external security and maintenance, manufacturing personnel related human resource matters, recruiting support, government compliance, workforce transportation and cross-border shipping of raw components.

We are reliant on Tetakawi to provide these services and any disruption in these services or our failure to maintain our contractual relationship with Tetakawi could significantly harm our

ability to manufacture our vascular closure devices and maintain sufficient quality standards, which would negatively impact our business and results of operations.

Due to the high standards and stringent requirements of the FDA and other similar non-U.S.

regulatory agencies applicable to manufacturing our products, such as the FDA's Quality System Regulation and Good Manufacturing Practices, we may not be able to quickly establish additional or replacement sources for certain raw materials, components or finished goods.

regulatory agencies applicable to manufacturing our products, such as the FDA's Quality System Regulation, or QSR, and current Good Manufacturing Practice, or cGMP, regulations, we may not be able to quickly establish additional or replacement sources for certain raw materials, components or finished goods.

A reduction or interruption in manufacturing, or an inability to secure alternative sources of raw materials, components or finished goods on commercially reasonable terms or in a timely manner, could compromise our ability to manufacture our products on a timely and cost-competitive basis, which may have a material adverse effect on our business, financial condition and results of operations.

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Today, we purchase plastics that contain phthalates, which are used to make plastic malleable.

Should plastics with phthalates become unavailable due to regulatory changes, we may be required to obtain regulatory approvals from the FDA and foreign authorities for a number of products.

While we have not experienced shortages in the past, any interruption in the supply for certain plastics could have a material impact on our business by limiting our ability to manufacture and sell the products that represent a significant portion of our revenues.

Due to regulatory changes, we may be required to remove materials such as phthalates from our devices, find alternative materials which then need to be validated or obtain regulatory approvals from the regulatory authorities for a number of products.

While we have not experienced significant shortages in the past, any interruption in the supply for certain plastics could have a material impact on our business by limiting our ability to manufacture and sell the products that represent a significant portion of our revenues.

These outcomes may in turn result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negative consequences (including a decline in stock price).

If we are unable to successfully expand our product lines through internal research and development, our business may be materially and adversely affected.

A significant element of our strategy is to increase revenue growth by focusing on innovation and new product development.

New product development requires significant investment in research and development, clinical trials and regulatory approvals.

The results of our product development efforts may be affected by a number of factors, including our ability to anticipate customer needs, innovate and develop new products and technologies, successfully complete clinical trials, obtain regulatory approvals in the United States and abroad, manufacture products in a cost-effective manner, obtain appropriate intellectual property protection for our products, and gain and maintain market acceptance of our products.

In addition, patents attained by others could preclude or delay our commercialization of a product.

There can be no assurance that any products now in development or that we may seek to develop in the future will achieve technological feasibility, obtain regulatory approval or gain market acceptance.

We may not realize the benefits we expect from our Operational Excellence Program.

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The 2020 Program is designed to improve operational performance and reduce cost principally in our manufacturing and supply chain operations.

While cost savings from the 2020 Program to date have been consistent with our expectations, it is possible that events and circumstances, such as financial or strategic difficulties, delays and unexpected costs may occur, including as a direct or indirect result of the COVID-19 pandemic, that could result in our not realizing all of the anticipated benefits or our not realizing the anticipated benefits on our expected timetable.

While cost savings from the 2020 Program to date have been consistent with our expectations, it is possible that events and circumstances, such as CSL's non-renewal of its U.S.

supply agreement in June 2022, other financial or strategic difficulties, delays and unexpected costs, including as a direct or indirect result of the COVID-19 pandemic, could result in our not realizing all of the anticipated benefits or our not realizing the anticipated benefits on our expected timetable.

Our inability to realize all of the anticipated benefits from the 2020 Program could have a material adverse effect on our business, results of operations, cash flows and financial condition.

We face intense competition, and if we are unable to successfully expand our product lines through internal research and new product development or keep pace with rapid technological changes in the healthcare industry, our business may be materially and adversely affected.

A significant element of our strategy is to increase revenue growth by focusing on innovation and new product development.

The medical device markets in which we participate, however, are highly competitive.

We encounter significant competition across our product lines and in each market in which our products are sold from various medical device companies, some of whom have greater financial and marketing resources than we do.

In addition, the medical device markets in which we participate and healthcare industry generally are characterized by extensive research and development and rapid technological change.

New product development requires significant investment in research and development, clinical trials and regulatory approvals.

property protection for our products, and gain and maintain market acceptance of our products.

In addition, patents attained by others could preclude or delay our commercialization of a product.

If we fail to develop new products or enhance existing products, or if competitive technologies or therapeutic alternatives to plasma-derived pharmaceuticals in development, such as FcRn-targeted therapies, emerge and gain market acceptance, such events could have a material adverse effect on our business, financial condition or results of operations.

In addition, a delay in the timing of the launch of next-generation products and the overall performance of, and continued customer confidence in, those products may result in declines in our market share and have an adverse impact on our business, financial condition or results of operations.

If our business development activities are unsuccessful, we may not realize the intended benefits.

We may seek to supplement our organic growth through strategic acquisitions, investments and alliances.

We have sought and in the future may seek to supplement our organic growth through strategic acquisitions, investments and alliances.

Such transactions are inherently risky and require significant effort and management attention.

The success of any acquisition, investment or alliance may be affected by a number of factors, including our ability to properly assess and value the potential business opportunity or to successfully integrate any business we may acquire into our existing business.

The success of any acquisition, investment or alliance, including our recent acquisition of Cardiva may be affected by a number of factors, including our ability to properly assess and value the potential business opportunity or to successfully integrate any business we may acquire into our existing business.

We anticipate that a significant amount of management’s attention will be required in the integration of Cardiva, and that a material factor in achieving the anticipated benefits of the Cardiva acquisition will be our ability to effectively and profitably market and sell the vascular closure devices acquired from Cardiva.

Also as a result of the Cardiva acquisition, we have entered into a new line of business.

Unlike our existing products, the VASCADE and VASCADE MVP vascular closure devices are designated as Class III medical devices, which are subject to additional and complex regulatory requirements.

Complying with these regulations will be costly, time-consuming and complex.

Furthermore, any new business line and/or new product or service could have an adverse impact on the effectiveness of our system of internal controls.

Promising partnerships and acquisitions may also not be completed for reasons such as competition among prospective partners or buyers, the inability to reach satisfactory terms, the need for regulatory approvals or the existence of economic conditions affecting our access to capital for acquisitions and other capital investments.

If our business development activities are unsuccessful, we may not realize the intended benefits of such activities, including that acquisition and integration costs may be greater than expected or the possibility that expected return on investment synergies and accretion will not be realized or will not be realized within the expected timeframe.

As a medical device manufacturer we operate in a highly regulated industry, and non-compliance with applicable laws or regulations could adversely affect our financial condition and results of operations.

The manufacture, distribution and marketing of our products are subject to regulation by the FDA and other non-U.S.

Risks Related to Government Regulation

As a medical device and drug manufacturer, we operate in a highly regulated industry, and non-compliance with applicable laws or regulations could adversely affect our financial condition and results of operations.

The manufacture, distribution and marketing of our products are subject to extensive regulation by the FDA and other state and non-U.S.

regulatory bodies.

Our operations are also subject to continuous review and monitoring by the FDA and other regulatory authorities.

Failure to substantially comply with applicable regulations could subject our products to recall or seizure by government authorities, or an order to suspend manufacturing activities.

If our products were determined to have design or manufacturing flaws, this could result in their recall or seizure.

Either of these situations could also result in the imposition of fines.

Additionally, the European Union regulatory bodies have adopted the EU MDR and the EU IVDR, each of which impose stricter requirements than prior European Union directives with respect to the marketing and sale of medical devices, including in the area of clinical data requirements, evaluation requirements, quality systems and post-market surveillance.

Manufacturers of currently approved medical devices will have until May 2021 to meet the requirements of the EU MDR and until May 2022 to meet the EU IVDR.

Our operations are also subject to review and monitoring by the FDA and other regulatory authorities.

Government regulation of medical devices is meant to assure their safety and effectiveness, and includes regulation of, among other things, the product’s development, testing, premarket clearance and approval, manufacture, marketing, labeling, post-market surveillance, reporting, and imports and exports.

Before a new medical device, or a new use of an existing product can be marketed in the United States, it must first receive either premarket clearance under Section 510(k) of the U.S.

Federal Food, Drug, and Cosmetic Act, or FDCA, a grant of a request for de novo classification or a Premarket Approval, or PMA, from the FDA, unless an exemption applies.

The process of obtaining regulatory clearances or approvals to market a medical device can be costly and time-consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all.

Many of our currently commercialized products have received 510(k) clearance.

In the future, the FDA may determine that our products will require more costly, lengthy and uncertain de novo or PMA processes.

Modifications to Class III devices, like the Vascular Closure products we acquired from Cardiva in March 2021, may require additional clinical studies or supplemental PMA submissions.

If the FDA requires us to go through a lengthier, more rigorous process for future products or modifications to existing products, our product introductions or modifications could be delayed or canceled, which could adversely affect our revenue.

In addition, even if we do obtain clearance or approval, the FDA may not approve or clear these products for the indications that we requested.

Any delay in, or failure to receive or maintain, clearances or approvals for our products under development could prevent us from generating revenue from these products.

Failure to substantially comply with applicable regulations could subject our products to recall or seizure of our products by government authorities, or an order to suspend manufacturing and distribution activities.

If our products were determined to have design or manufacturing flaws, this could also result in their recall or seizure.

Either of these situations could also result in the imposition of fines, administrative actions like untitled or warning letters, and other penalties or sanctions.

Our products are also subject to approval and regulation by foreign regulatory and safety agencies.

For example, the EU has adopted the EU Medical Device Regulation, or EU MDR, and EU In Vitro Diagnostic Regulation, or EU IVDR, each of which impose stricter requirements for the marketing and sale of medical devices beyond those of the current medical device directives they replace, including in the area of clinical evaluation requirements, quality systems and post-market surveillance.

The EU MDR is fully applicable as of May 26, 2021 and the EU IVDR is fully applicable 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, provided that there are no significant changes to the design or intended use.

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.

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 European Union and other regions that tie their product registrations to the EU requirements.

If we or our suppliers fail to comply with ongoing regulatory requirements, our products could be subject to restrictions or withdrawal from the market.

Any product for which we obtain clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspection by the FDA and other domestic and foreign regulatory bodies.

In particular, we and our third-party suppliers must comply with the FDA's Quality System Regulation or current Good Manufacturing Practices requirements (depending on the products at issue).

Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in enforcement actions.

Any FDA sanctions could have a material adverse effect on our reputation, business, results of operations and financial condition.

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.

If we or our suppliers fail to comply with laws and regulations governing the manufacture and production of our products, our products could be subject to restrictions or withdrawal from the market.

Any product for which we obtain clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspection (both routine and unannounced) by the FDA and other domestic and foreign regulatory bodies.

In particular, we and our third-party suppliers must comply with the FDA's Quality System Regulation, or QSR, or current good manufacturing process, or cGMP, requirements (depending on the products at issue), which address, among other things, the methods of documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products.

Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA or other regulatory authority could result in administrative actions, field actions, or civil or criminal enforcement actions.

Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with all applicable regulatory requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all.

Our inability to obtain, or any delay in obtaining, any necessary U.S.

or foreign regulatory clearances or approvals for our newly developed products or product enhancements could harm our business and prospects.

Our products are subject to a high level of regulatory oversight.

Most medical devices cannot be marketed in the U.S.

without 510(k) clearance or premarket approval by the FDA.

Our inability to obtain, or any delay in obtaining, any necessary U.S.

or foreign regulatory clearances or approvals for newly developed products or product enhancements could harm our business and prospects.

The process of obtaining clearances and approvals can be costly and time consuming.

In addition, there is a risk that any approvals or clearances, once obtained, may be withdrawn or modified.

Delays in receipt of, or failure to obtain, necessary clearances or approvals for our new products could delay or preclude realization of product revenues from new products or result in substantial additional costs which could decrease our profitability.

Any sanctions by the FDA or other regulatory authority could have a material adverse effect on our reputation, business, results of operations and financial condition.

We are also subject to environmental laws, which are becoming more stringent throughout the world.

For example, the U.S.

Environmental Protection Agency regulates the use of ethylene oxide for sterilization of medical devices, and is increasingly focused on reducing emissions from the ethylene oxide sterilization process, which could increase our costs of operations and necessitate changes to our manufacturing plants and processes.

Other environmental laws may have similar consequences to us or our suppliers, or result in liability to us.

The enactment of additional environmental laws in the future may increase our compliance costs or otherwise adversely impact our operations.

If our products cause or contribute to a death or serious injury, or malfunction in certain ways, we will be subject to medical device reporting requirements.

Under the FDA's medical device reporting regulations, medical device manufacturers are required to report to the FDA information of which they become aware that a device has or 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 of the device or one of our similar devices were to recur.

Similar reporting requirements exist in some of the other jurisdictions in which we operate.

Failure to report these events to the FDA or other applicable regulatory authorities within the required timeframes, or at all, could lead to enforcement actions, fines and criminal sanctions against us.

Class III medical devices are those that pose the highest risk to patients.

As a result of the acquisition of our Vascular Closure products from Cardiva in March 2021, we may receive a greater number of complaints requiring investigation and potentially need to file a greater number of medical device reports with FDA, which may require additional time and resources.

Our relationships with customers and third-party payers are subject to applicable anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion, contractual damages, reputational harm and diminished profits and future earnings.

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The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance or reporting requirements in multiple jurisdictions increase the possibility that a healthcare or pharmaceutical company may fail to comply fully with one or more of these requirements.

Efforts to ensure that our business

arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.

It is possible that governmental authorities will conclude that our business practices do not comply with applicable fraud and abuse or other healthcare laws and regulations or guidance.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.

It is possible that governmental authorities will conclude that our business practices do not comply with applicable fraud and abuse or other healthcare laws and regulations or guidance, or anti-bribery laws such as the Foreign Corrupt Practices Act of 1977, or equivalent laws in other jurisdictions.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations.

If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

If any of the physicians or other providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our financial condition and divert resources and the attention of our management from operating our business.

Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and/or liquidity.

We are subject to income taxes, non-income based taxes and tax audits, in both the U.S.

and various foreign jurisdictions.

Tax authorities may disagree with certain positions we have taken and assess additional taxes.

We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision and have established contingency reserves for material, known tax exposures.

However, the calculation of such tax exposures involves the application of complex tax laws and regulations in many jurisdictions, as well as interpretations as to the legality under various rules in certain jurisdictions.

Therefore, there can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues raised by tax authorities will be resolved at a financial cost that does not exceed our related reserves and the actual outcomes of these disputes and other tax audits could have a material impact on our results of operations or financial condition.

Changes in tax laws and regulations, or their interpretation and application, in the jurisdictions where we are subject to tax could materially impact our effective tax rate.

For example, in 2017, the U.S.

enacted the Tax Cuts and Jobs Act, or the Act, and we expect the U.S.

Treasury to issue future notices and regulations under the Act.

Certain provisions of the Act and the regulations issued thereunder could have a significant impact on our future results of operations as could interpretations made by the Company in the absence of regulatory guidance and judicial interpretations.

The change in administration and control of Congress in the U.S.

following the 2020 elections may result in additional U.S.

tax law changes that could have a material impact on our future effective tax rate.

Additionally, the U.S.

Congress, government agencies in non-U.S.

jurisdictions where we and our affiliates do business and the Organization for Economic Co-operation and Development, or OECD, have recently focused on issues related to the taxation of multinational corporations.

The OECD has released its comprehensive plan to create an agreed set of international rules for fighting base erosion and profit shifting.

In addition, the OECD, the European Commission and individual countries are examining changes to how taxing rights should be allocated among countries in light of the digital economy.

As a result, the tax laws in the U.S.

and other countries in which we and our affiliates do business could change on a prospective or retroactive basis and any such changes could materially adversely affect our business.

Risks Related to our Financial Obligations and Indebtedness

We have a significant amount of debt that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur additional debt in the future, which may adversely affect our operations and financial results.

As of April 3, 2021, we had $500 million aggregate principal amount of indebtedness under our convertible senior notes due 2026 (the “2026 Notes”) as well as $350.0 million term loan (the “Term Loan”) and access to a $350.0 million revolving loan (the “Revolving Credit Facility” and together with the Term Loan, the “Credit Facilities”).

As of April 3, 2021, we had $301.9 million of debt outstanding under the Term Loan and no borrowings were outstanding under the Revolving Credit Facility.

Our Credit Facilities contain financial covenants that require us to maintain specified financial ratios that may limit our ability to borrow additional funds and that require us to make interest and principal payments.

As of April 3, 2021, we were in compliance with the covenants pursuant to our Credit Facilities, and we currently forecast that we will be in compliance with our Credit Facility covenants through the period ending April 2, 2022.

Our ability to pay our debt when due or refinance our indebtedness, including the Notes, depends on our future financial performance, which is subject to economic, financial, competitive, and other factors outside of our control.

If we are not able to pay our debt when due or refinance our indebtedness on desirable terms such that we default on our debt obligations, our indebtedness could become immediately payable in full which could harm our financial condition, result of operation or cost of borrowing.

The conditional conversion feature of the 2026 Notes, if triggered, may adversely affect our financial condition and operating results.

Under certain circumstances, the noteholders may convert their 2026 Notes at their option prior to the scheduled maturities.

If one or more noteholders elect to convert their 2026 Notes, we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

In addition, holders of our 2026 Notes will have the right to require us to repurchase their 2026 Notes upon the occurrence of a fundamental change (as defined in the indenture, dated as of March 5, 2021, between U.S.

Bank National Association, as trustee (the “Trustee”) and us (the “Indenture”)), at a repurchase price equal to the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid special interest, if any, to but not including, the fundamental change repurchase date.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2026 Notes or pay the cash amounts due upon conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2026 Notes or pay the cash amounts due upon conversion.

Our failure to repurchase 2026 Notes or to pay the cash amounts due upon conversion when required will constitute a default under the Indenture.

A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, including our Credit Facilities, which may result in that other indebtedness becoming immediately payable in full.

We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the Notes.

Even if holders do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The Capped Call Transactions may affect the value of the 2026 Notes and our common stock.

In connection with the 2026 Notes issuance, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions (the “Option Counterparties”).

The Capped Call Transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the 2026 Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.

From time to time, the Option Counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2026 Notes.

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2026 Notes.

We are subject to counterparty risk with respect to the Capped Call Transactions.

The Option Counterparties are financial institutions, and we are subject to the risk that one or more of the Option Counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the Capped Call Transactions.

Our exposure to the credit risk of the option counterparties is not secured by any collateral.

Past global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions.

If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transactions with such Option Counterparty.

Our exposure depends on many factors, but our exposure will generally increase if the market price or the volatility of our common stock increases.

In addition, upon default by an Option Counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of the Option Counterparties.

In addition, the Capped Call Transactions are complex, and they may not operate as planned.

For example, the terms of the Capped Call Transactions may be subject to adjustment, modification or, in some cases, renegotiation if certain corporate or other transactions occur.

Accordingly, these transactions may not operate as we intend if we are required to adjust their terms as a result of transactions in the future or upon unanticipated developments that may adversely affect the functioning of the Capped Call Transactions.

Provisions in the Indenture could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the 2026 Notes and the Indenture could make a third party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their 2026 Notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate.

In either case, and in other cases, our obligations under the 2026 Notes and the Indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.

Conversion of the 2026 Notes may dilute the ownership interest of existing stockholders.

The conversion of some or all of the Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares of our common stock upon conversion of any of the 2026 Notes.

Any sales in the public market of the common stock issuable upon such conversion could adversely affect our common stock’s prevailing market prices.

In addition, the existence of the 2026 Notes may encourage short selling by market participants because the conversion of the 2026 Notes could be used to satisfy short positions, or anticipated conversion of the 2026 Notes into shares of our common stock could depress the price of our common stock.

Risks Related to Operating Internationally

As a substantial amount of our revenue comes from outside the U.S., we are subject to geopolitical events, economic volatility, violations of anti-corruption laws, export and import restrictions and tariffs, decisions by local regulatory authorities and the laws and medical practices in foreign jurisdictions.

We do business in over 90 countries and have distributors in approximately 80 of these countries.

This exposes us to currency fluctuation, geopolitical risk, economic volatility, anti-corruption laws, export and import restrictions, local regulatory authorities and the laws and medical practices in foreign jurisdictions.

This exposes us to currency fluctuation, geopolitical risk, economic volatility (such as the United Kingdom's exit from the EU, commonly referred to as "Brexit"), anti-corruption laws, export and import restrictions, local regulatory authorities and the laws and medical practices in foreign jurisdictions.

If there are sanctions or restrictions on the flow of capital that prevent product importation or receipt of payments in Russia or China, our business could be adversely affected.

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Foreign Corrupt Practices Act, or FCPA, and other similar anti-corruption laws in other countries.

Generally, these laws prohibit companies and their business partners or other intermediaries from

making improper payments to foreign governments and government officials in order to obtain or retain business.

Generally, these laws prohibit companies and their business partners or other intermediaries from making improper payments to foreign governments and government officials in order to obtain or retain business.

Global enforcement of such anti-corruption laws has increased in recent years, including aggressive investigations and enforcement proceedings.

While we have an active compliance program and various other safeguards to discourage impermissible practices, we have distributors in approximately 80 countries, several of which are considered high risk for corruption.

As a result, our global operations carry some risk of unauthorized impermissible activity on the part of one of our distributors, employees, agents or consultants.

As a result, our global operations carry some risk of unauthorized impermissible activity on the part of one of our distributors, employees,

agents or consultants.

Any alleged or actual violation could subject us to government scrutiny, severe criminal or civil fines, or sanctions on our ability to export product outside the U.S., which could adversely affect our reputation and financial condition.

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law, our reputation could be harmed and we could be subject to fines, sanctions or both.

Our success depends on our ability to attract and retain key personnel needed to successfully operate the business.

Our ability to compete effectively depends on our ability to attract and retain key employees, including people in senior management, sales, marketing and R&D positions.

Our ability to recruit and retain such talent will depend on a number of factors, including hiring practices of our competitors, compensation and benefits, work location, work environment and industry economic conditions.

In December 2019, we relocated our corporate headquarters to a leased office space in Boston, Massachusetts.

Although we believe our move to Boston will help us to attract and retain key talent and provide a dynamic space to engage our employees, competition for top talent in the healthcare market, and the increased cost or commuting time for current employees relocating or traveling to Boston could impact our ability to realize the intended results of the move.

We have also effected organizational and strategic changes in the last several years, including our Complexity Reduction Initiative, which have resulted in workforce reductions.

If we fail to effectively manage our ongoing organizational and strategic changes in a manner that allows us to retain and attract talent, our financial condition, results of operations and reputation, as well as our ability to successfully attract, motivate and retain key employees, could be harmed.

Additionally, to the extent our senior management or other key employees are impacted by the COVID-19 pandemic and are not available to perform their job duties, we could experiences delays in, or the suspension of, important strategic and commercial objectives.

We operate in an industry susceptible to significant product liability claims.

Product liability claims could damage our reputation and impair our ability to market our products or obtain professional or product liability insurance, or increase the cost of such insurance.

Our products are relied upon by medical personnel in connection with the treatment of patients and the collection of blood or blood components from donors.

In the event that patients or donors sustain injury or death in connection with their condition or treatment, we, along with others, may be sued and whether or not we are ultimately determined to be liable, we may incur significant legal expenses.

These claims may be brought by individuals seeking relief on their own behalf or purporting to represent a class.

In addition, product liability claims may be asserted against us in the future based on events we are not aware of at the present time.

Such litigation could damage our reputation and, therefore, impair our ability to market our products or obtain professional or product liability insurance, or increase the cost of such insurance.

While we believe that our current product liability insurance coverage is sufficient, there is no assurance that such coverage will be adequate to cover incurred liabilities or that we will be able to obtain acceptable product and professional liability coverage in the future.

If we are unable to meet our debt obligations or experience a disruption in our cash flows, it could have an adverse effect on our financial condition, results of operations or cost of borrowing.

On June 15, 2018, we entered into a five-year credit agreement with certain lenders which provided for a $350.0 million term loan (the "Term Loan") and a $350.0 million revolving loan (the "Revolving Credit Facility" and together with the Term Loan, the "Credit Facilities").

As of March 28, 2020 , we had $323.8 million of debt outstanding under the Term Loan and $60.0 million outstanding under the Revolving Credit Facility.

In April 2020, we borrowed an additional $150 million under our Revolving Credit Facility.

The obligations to pay interest and repay the borrowed amounts may restrict our ability to adjust to adverse economic conditions and our ability to fund working capital, capital expenditures, acquisitions or other general corporate requirements.

The interest rate on borrowings under our Credit Facilities is variable and subject to change based on market forces.

Fluctuations in interest rates could adversely affect our profitability and cash flows.

In addition, as a global corporation, we have significant cash reserves held in foreign countries.

Some of these balances may not be immediately available to repay our debt.

Our Credit Facilities contain financial covenants that require us to maintain specified financial ratios and make interest and principal payments.

As of March 28, 2020, we were in compliance with the covenants pursuant to our Credit Facilities, and we currently forecast that we will be in compliance with our credit facility covenants through the period ending April 3, 2021.

If the impact of COVID-19 is more severe than currently forecasted this may impact our ability to comply with our Credit Facility covenants, and it not certain that we would be able to renegotiate the terms of our Credit Facility in order to provide relief related to the applicable covenants.

If in the future we are unable to satisfy our Credit Facility covenants, and then were unable to renegotiate the terms thereof, we could be required to repay any borrowed amounts on short notice.

Our operations and plans for future growth may require additional capital that may not be available to us, or only available to us on unfavorable terms.

Our operations and plans for future growth may require us to raise additional capital in the future.

Our ability to issue additional debt or enter into other financing arrangements on acceptable terms could be adversely affected by our debt levels, unfavorable changes in economic conditions generally or uncertainties that affect the capital markets.

Higher borrowing costs or the inability to access capital markets could adversely affect our ability to support future growth and operating requirements and, as a result, our business, financial condition and results of operations could be adversely affected.

Refer to Liquidity and Capital Resources within our Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7 of this Annual Report on Form 10-K for further discussion of our debt obligations.

We are exposed to fluctuations in currency exchange rates, which could adversely affect our cash flows and results of operations.

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Our future effective tax rate, however, may be lower or higher than prior years due to numerous factors, including a change in our geographic earnings mix, changes in the measurement of our deferred taxes and recently enacted and future tax law changes in jurisdictions in which we operate.

Changes in our operations, including headcount in Switzerland, Puerto Rico or Malaysia, could adversely affect our tax rate due to favorable tax rulings in these jurisdictions.

Changes in our operations, including headcount in Switzerland or Malaysia, could adversely affect our tax rate due to favorable tax rulings in these jurisdictions.

We are also subject to tax audits in various jurisdictions and tax authorities may disagree with certain positions we have taken and assess additional taxes.

Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations, which could adversely affect our business, results of operations and cash flows.

Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and/or liquidity.

We are subject to income taxes, non-income based taxes and tax audits, in both the U.S.

and various foreign jurisdictions.

Tax authorities may disagree with certain positions we have taken and assess additional taxes.

We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision and have established contingency reserves for material, known tax exposures.

Changes in tax laws and regulations, or their interpretation and application, in the jurisdictions where we are subject to tax could materially impact our effective tax rate.

For example, in 2017, the U.S.

enacted the Tax Cuts and Jobs Act, or the Act, and we expect the U.S.

Treasury to issue future notices and regulations under the Act.

The result of the upcoming U.S.

presidential and congressional elections may result in additional U.S.

tax law changes that could have a material impact on our future effective tax rate.

Additionally, the U.S.

Congress, government agencies in non-U.S.

The OECD has released its comprehensive plan to create an agreed set of international rules for

fighting base erosion and profit shifting.

In addition, the OECD, the European Commission and individual countries are examining changes to how taxing rights should be allocated among countries in light of the digital economy.

As a result, the tax laws in the U.S.

and other countries in which we and our affiliates do business could change on a prospective or retroactive basis and any such changes could materially adversely affect our business.

Our share price has been volatile and may fluctuate, and accordingly, the value of an investment in our common stock may also fluctuate.

Stock markets in general and our common stock in particular have experienced significant price and trading volume volatility over recent years.

The market price and trading volume of our common stock may continue to be subject to significant fluctuations due to factors described under this Item 1A.

Risk Factors, as well as economic and geopolitical conditions in general and to variability in the prevailing sentiment regarding our operations or business prospects, as well as, among other things, changing investment priorities of our shareholders.

Because the market price of our common stock fluctuates significantly, shareholders may not be able sell their shares at attractive prices.

Our share repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

On May 7, 2019, we announced that our Board of Directors authorized the repurchase of up to $500 million of our outstanding common stock over the next two years.

Under the share repurchase program, we are authorized to repurchase, from time to time, outstanding shares of common stock in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended and in privately negotiated transactions.

The actual timing, number and value of shares repurchased will be determined by us and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants.

The share repurchase program may be suspended, modified or discontinued at any time and we have no obligation to repurchase any amount of its common stock under the program.

Repurchases pursuant to our share repurchase program could affect our stock price and increase its volatility.

The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock.

There can be no assurance that any share repurchases will enhance shareholder value because the market price of our common stock may decline below the levels at which we repurchased our common stock.

Although our share repurchase program is intended to enhance long-term shareholder value, short-term stock price fluctuations could reduce the program’s effectiveness.

Refer to Note 7 , Earnings per Share , to our consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K for further discussion.

Risks Related to Intellectual Property and Litigation

There is a risk that our intellectual property may be subject to misappropriation in some countries.

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There is a risk that one or more of our products may be determined to infringe a patent held by another party.

If this were to occur, we may be subject to an injunction or to payment of royalties, or both, which may adversely affect our ability to market

the affected product or otherwise have an adverse effect on our results of operations.

If this were to occur, we may be subject to an injunction or to payment of royalties, or both, which may adversely affect our ability to market the affected product or otherwise have an adverse effect on our results of operations.

In addition, competitors may patent technological advances that may give them a competitive advantage or create barriers to entry.

We operate in an industry susceptible to significant product liability claims.

Product liability claims could damage our reputation and impair our ability to market our products or obtain professional or product liability insurance, or increase the cost of such insurance.

Our products are relied upon by medical personnel in connection with the treatment of patients and the collection of blood or blood components from donors.

These claims may be brought by individuals seeking relief on their own behalf or purporting to represent a class.

In addition, we may be subject to claims against us even if the apparent injury is due to the actions of others or the pre-existing health of the patient.

For example, we rely on physicians and healthcare providers to properly and correctly use our products on patients.

If these physicians or healthcare providers are not properly trained, are negligent in using our products or use our products “off-label,” the capabilities of our products may be diminished or the patient may suffer critical injury.

We cannot prevent a physician from using our products for off-label applications.

In addition, we cannot guarantee that physicians are trained by us or their peers prior to utilizing our products.

Complications resulting from the use of our products off-label or use by physicians who have not been trained appropriately, or at all, may expose us to product liability claims and harm our reputation.

Any such complications or adverse safety outcomes following use of VASCADE or VASCADE MVP may result in higher payments to our customers under a Performance Guarantee program applicable to those products, which would harm our business and results of operations.

In addition, product liability claims may be asserted against us in the future based on events we are not aware of at the present time.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or halt commercialization of our products.

Even successful defense would require significant financial and management resources.

Regardless of the merits or eventual outcome, such litigation could damage our reputation and, therefore, impair our ability to market our products or obtain professional or product liability insurance, or increase the cost of such insurance.

General Risk Factors

Our success depends on our ability to attract and retain key personnel needed to successfully operate the business.

Our ability to compete effectively depends on our ability to attract and retain key employees, including people in senior management, sales, marketing and R&D positions, and to facilitate seamless leadership transitions for key positions.

Our ability to recruit and retain key talent will depend on a number of factors, including hiring practices of our competitors, compensation and benefits, work location, work environment and industry economic conditions.

In December 2019, we relocated our corporate headquarters to a leased office space in Boston, Massachusetts and in response to the COVID-19 pandemic, we instituted remote working practices for many of our employees.

Although we believe our move to Boston and the steps we have taken to build a collaborative, performance driven culture and to maintain employee well-being during COVID-19 will help us to attract and retain key talent, we face intense competition for talent in our industry, particularly as employees are increasingly able to work remotely.

If we fail to attract and retain key personnel in senior management and other positions, or if our succession planning efforts are not effective, it could adversely impact our business.

Our share price has been volatile and may fluctuate, and accordingly, the value of an investment in our common stock may also fluctuate.

Stock markets in general and our common stock in particular have experienced significant price and trading volume volatility over recent years.

The market price and trading volume of our common stock may continue to be subject to significant fluctuations due to factors described under this Item 1A.

Because the market price of our common stock fluctuates significantly, shareholders may not be able sell their shares at attractive prices.

Share repurchase programs could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

We may in the future request that the Board of Directors authorize one or more share repurchase programs, our most recent of which expired in May 2021.

Under such share repurchase programs, we are generally authorized to repurchase, from time to time, outstanding shares of common stock in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended and in privately negotiated transactions.

The actual timing, number and value of shares repurchased is determined by us and depends on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants.

Such share repurchase programs may be suspended, modified or discontinued at any time and we have no obligation to repurchase any amount of our common stock under the programs.

Repurchases pursuant to a share repurchase program could affect our stock price and increase its volatility.

There can be no assurance that any share repurchases would enhance shareholder value because the market price of our common stock may decline below the levels at which we repurchased our common stock.

Although our share repurchase programs are intended to enhance long-term shareholder value, short-term stock price fluctuations could reduce a program’s effectiveness.

Refer to Note 7, Earnings per Share , to our consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K for further discussion.

UNRESOLVED STAFF COMMENTS

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 1A. Risk Factors