NEW YORK (GenomeWeb News) — Grifols said today that it has been selected by the Japanese Red Cross Society as a partner in nucleic acid screening of the country's 5.3 million annual blood donations.
In a note to investors, Grifols said that the seven-year agreement is worth approximately $375 million. Grifols will provide the JRC with its Procleix Panther system and associated assays, which the JRC will use to screen blood donations for HIV and hepatitis viruses prior to their release for medical use.
The JRC selected the Grifols Procleix Panther System after an extensive in-house evaluation of commercially available systems against a range of performance criteria, including the efficiency of testing each blood donor sample separately rather than in pools.
The JRC will perform individual donor testing using the Procleix Ultrio Elite assay for detection of HIV types 1 and 2 and hepatitis virus types B and C in a single multiplex assay. In addition, the JRC will be the world's first blood center to address emerging concerns about hepatitis E virus by testing donations in the Hokkaido region with the new Procleix HEV assay.
Since its commercial launch in late 2012, the Procleix Panther System has been placed in more than 60 blood screening laboratories around the world, Grifols said. The fully automated system features a very small footprint, simple touch-screen operation, and the ability to test samples as they arrive in the lab or in batches. In addition to the aforementioned assays, the system can run the Procleix WNV assay for detection of West Nile virus.
Grifols' Procleix-brand products are developed as part of a long-standing partnership with Hologic, formerly Gen-Probe. Previously, Novartis and Gen-Probe had collaborated since 1998 to develop and market nucleic acid tests for blood screening, and expanded their agreement in 2009 with an intent to collaborate until 2025.
Hologic subsequently acquired Gen-Probe in 2012 for $3.7 billion, and the blood screening partnership with Novartis remained intact. However, in November last year, Barcelona, Spain-based healthcare products firm Grifols acquired Novartis' transfusion diagnostics business for approximately $1.68 billion, thus assuming the Hologic blood screening partnership.
In a research note issued today, Piper Jaffray's William Quirk noted that given the contract's value of about $375 million, Hologic stands to gain about $195 million in revenue over the contract duration at the current revenue split.
"Blood screening historically generated some of the most attractive incremental operating margins to Gen-Probe (north of 75 percent), suggesting this could add up to $0.35 in EPS over the contract or $0.05 per year," Quirk noted. "We estimate the contract will generate an incremental [approximate] $27.9M in annual revenue to Hologic."