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Thursday, Mar 28, 2024

HemaCare Corp. Makes Exit From Blood Bank Market

Blood services company HemaCare Corp. has change running through its veins. The Van Nuys-based blood services company recently sold off the assets of its blood banking market segment — which comprised nearly half of its total revenues — and laid off 93 employees, or nearly half of its staff, company officials said. Now HemaCare is focusing on providing blood components for cellular-based drug therapy trials and its other therapeutic services. HemaCare is providing cellular material for companies doing research for immunotherapy drugs, or drugs that help patients use their own immune systems to battle cancers in a much more comfortable way, said Pete van der Wal, CEO of HemaCare. “We’re actively now involved with pursuing relationships with pharmaceutical companies, biotechnology companies and cellular therapy companies to supply them with our services and products,” van der Wal said. “We’re adding not only new customers, but we’re also doing more business with the customers we already have.” To adjust its staff to its new business model, HemaCare is “reallocating” its remaining resources by adding a few additional sales and marketing staff, van der Wal said. He said the company also plans to add employees in another of its highly-specialized business segments, called its therapeutic apheresis business. Therapeutic apheresis involves separating certain components in the blood from patients with the rest of the blood being transfused back to the patient. HemaCare was the nation’s only for-profit company in the blood banking industry, until it sold its whole blood collection operations assets to the American Red Cross on July 11. The sale was for about $3 million, plus an additional amount for additional inventory on the closing date. HemaCare also entered into an exclusive agreement with the American Red Cross to provide donor platelets for the company for up for a minimum of five years, van der Wal said. HemaCare’s exit from blood banking is consistent with sweeping changes in the health care industry that have led to decreased demand for blood, said Jim MacPherson, CEO of national organization America’s Blood Centers. Patients have cut down on elective surgeries in recent years due to loss of insurance or higher insurance deductibles, and hospitals have trimmed their usage due to tighter budgets, he said. That’s creating lower demand and higher competition. “We’re seeing a lot of hospitals having to put in blood management programs,” MacPherson said. Industry-wide changes have taken a greater toll on private sector blood bank operators than on nonprofits, which are less concerned with profit margins, he added. Nick Samaniego, spokesman for the American Red Cross’ Southern California blood services region, said the organization also experienced a decrease in demand nationwide as people started losing jobs and doing fewer elective procedures. However, the group has picked up business by becoming suppliers to areas of the country hit by natural disasters, he said. Overall, he said, the American Red Cross is less affected by demand and pricing issues than a for-profit company would be. “We don’t have to show any big profit at the end of the year or try to pad somebody’s investment portfolio,” Samaniego said. Van der Wal said an oversupply of blood, and new competitors in the metropolitan Los Angeles market also put a strain on its blood banks business. HemaCare’s blood services revenue decreased by 20 percent, or by $1.2 million for the first quarter of 2011, compared to the same period last year. Meanwhile, revenues for therapeutic services increased by 21 percent, or by $373,000. The company had a total net loss of $390,000 for the first quarter, compared to a loss of $204,000 for the same period in 2010. The company generated $7 million in revenue for the most recent first quarter, compared to $7.8 million a year ago. Meanwhile, the American Red Cross has already hired six former HemaCare employees to run new blood banks that will open in the region due to the sale, Samaniego said. The organization is hiring nurses, technicians, phlebotomists and recruiters, he said. HemaCare’s business shift is also a sign of a growing and profitable niche in the cellular therapy industry, MacPherson said. “We’ve been predicting for 10 years that cell therapy was going to explode—we just don’t know when,” he said, noting that pharmaceutical companies are experimenting to try to find the next big therapy drug. “It’s on the verge of explosion.”

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