Shares of plasma provider Haemonetics off highs as Needham says COVID-19 EUA not material to results

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Shares of blood transfusion and plasma provider Haemonetics Inc. were off their highs on Monday, after Needham analysts said news of an emergency use authorization for convalescent plasma as a treatment for hospitalized COVID-19 patients would not have a material impact on the company’s plasma business. In a note to clients, analysts Mike Matson and David Saxon wrote that the move is “clearly a positive development,” but not one that will materially impact the company. They cited data from the Plasma Protein Therapeutics Association that shows 53.5 million plasma collections in the U.S. in 2019, and data from The Covid Tracking Project, showing about 360,000 hospitalizations year-to-date for COVID. That is equal to about 864,000 hospitalizations on an annual basis. The Food and Drug Administration is recommending starting with one unit of plasma, or about 200 mL, and then providing additional units based on a doctor’s judgement and patient’s response. “We estimate that each collection results in an average of around 750 mL or 3.75 units of plasma,” the analysts wrote. “If we assume in a “best-case scenario” for HAE that every hospitalized COVD-19 patient was treated with 3 units of convalescent plasma, we estimate that it would require ~691,00 collections. To put this into context, this equals just 1.3% of the total plasma collections in 2019.” The analysts rate the stock as a buy with a $119 price target that is about 34% above its current price. The stock was last up 2.5%, and is down 23% in the year to date, while the S&P 500 has gained about 6%.
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