Grifols, a company that turns blood plasma into therapies for immunological disorders and other conditions, is laying off about 2,000 U.S. workers as part of a corporate restructuring projected to yield up to €400 million in annual cost savings, the biotech announced Wednesday.

The layoffs represent about 8% of the Barcelona-based company’s global workforce, but they will happen mainly in its U.S. plasma operations. That’s notable because as a company that relies on plasma, the U.S. is vital to its business.

The starting point for Grifols’s therapies is blood plasma. Key to its drug-making process is fractionation, in which the protein components of plasma are isolated and purified. Those proteins become the basis for various therapies. Grifols and other companies that make plasma-based products operate global plasma collection networks to obtain this vital source material. Those centers rely on people who voluntarily give their plasma.

People who give plasma in the U.S. aren’t paid. The industry refers to collection sites as donation centers. But donors do receive a stipend, which can range from $50 to hundreds of dollars, depending on the center and the frequency of donation. Most of Grifols’s plasma comes from the U.S. In Europe, Grifols’s plasma comes only from Germany, Austria, and Hungary. While European donors aren’t paid either, those three countries have policies allowing for flat-fee compensation. In other European countries, non-monetary compensation is the norm. There’s ongoing debate about whether to change those policies in order to boost donations.

Much of Grifols’s U.S. footprint comes from the $3.4 billion acquisition of Talecris in 2011. Grifols’s bioscience division, which encompasses plasma-derived therapies, accounted for more than 77% of the company’s €4.9 billion 2021 revenue, according to the company’s financial reports. But the Covid-19 pandemic clamped down on plasma donations, which in turn hurt the ability of companies like Grifols to make their products and make money. Some of Grifols’s peers have responded by diversifying. For example, Melbourne, Australia-based CSL Limited acquired kidney disease-focused Vifor Pharma in an $11.7 billion deal last year. Vifor has 10 commercialized products, none of them made from plasma.

Grifols has also been trying to diversify. In 2020, it paid $146 million to acquire clinical-stage Alkahest, a biotech that analyzes the proteome to discover and develop drugs for neurological disorders. In 2021, Grifols paid $80 million to acquire antibody drug developer GigaGen. But even if clinical trials prove successful, they are still years away from reaching the market. Last year, Grifols paid €1 billion to buy the holding company that is the majority shareholder of Biotest. But Biotest’s plasma protein products and hematological and immunology therapies complement rather than diversify Grifols’s plasma-based products portfolio. The transaction brought Grifols 29 additional plasma collection centers, according to a regulatory filing.

Grifols is sticking with its plasma collection centers, but it’s going to try to squeeze more out of them. Wednesday’s announcement outlines a multi-point plan that states a goal of maintaining plasma volumes while reducing costs, generating projected annualized savings of at least €300 million. Efficiencies will come from digitizing these centers to reduce the time donors spend on site, increasing throughput, and reducing staffing costs. Grifols also plans to close or consolidate certain donor centers. In the fourth quarter of 2022, it said it closed 18 centers; more are on the chopping block in the first half of this year.

“Following an in-depth review of our organizational and cost structures, staffing, processes, facilities, systems, and incentive plans across our global operations, we are convinced that these initiatives are necessary not just to improve our financial performance but also to enable us to become more nimble, more responsive, more decisive, and more effective,” Grifols Executive Chairperson Steven Mayer said in a prepared statement. “This in turn will allow us to become and remain more competitive, which is essential as we pursue our long-term business strategy in a fast-changing environment.”

The restructuring announcement is likely a preview for the company’s upcoming financial report. Grifols is scheduled to report 2022 fourth quarter and full year results on Feb. 28.

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