Dive Brief:
- Baxter expects to restart a second IV fluid production line shortly at its hurricane-damaged plant in western North Carolina — the country’s largest manufacturer of peritoneal dialysis and intravenous solutions.
- Still, CFO Joel Grade told investors on a Friday earnings call that Baxter expects an approximately $200 million hit to sales in the fourth quarter because of Hurricane Helene’s disruption to operations. Baxter does not have a timeline for when production at the North Carolina facility will be fully restored to pre-hurricane levels.
- Baxter has resumed production on its highest throughput IV solutions line, as expected, CEO Joe Almeida said on the call. However, Almeida stressed that the earliest that new products could start to ship from the plant is late November.
Dive Insight:
Baxter’s North Cove site suffered flood damage from Hurricane Helene in late September, halting production and prompting the Centers for Disease Control and Prevention to alert healthcare providers to plan for supply disruptions that could affect patients.
The facility produces about 60% of the IV fluid used by U.S. hospitals, according to the American Hospital Association.
To bolster domestic supply of IV solutions until the site returns to full production capacity, the Food and Drug Administration conducted scientific and regulatory assessments to help facilitate the temporary importation of 23 different IV and peritoneal fluids from Baxter facilities around the world, the Department of Health and Human Services said in mid-October. Regulatory flexibility was granted, and the federal government said it would also support Baxter’s efforts to airlift products into the U.S.
North Cove is Baxter’s largest manufacturing plant, employing more than 2,500 people. The two production lines that are ramping back up, at peak operation, represent about half of the site’s total production and 85% of its 1-liter IV solutions, the most commonly used size in hospitals.
The next manufacturing lines to restart at the site will be peritoneal dialysis solutions and irrigation, with production expected to resume by early December, the company said in an update Thursday.
By the end of the year, all lines will be restarted, Baxter said, adding that a second temporary bridge is now in operation at the North Cove site. Meanwhile, the company has activated nine plants across its global manufacturing network to help increase available inventory.
The impact of the hurricane is expected to reduce total company sales in the fourth quarter by about $200 million, including about $40 million to $50 million in kidney care sales and $150 million to $160 million in sales of medical products and therapies, Grade said on the call.
BTIG analyst Ryan Zimmerman said the medtech industry appears to have weathered the impact of the IV shortages well, as Baxter has worked to resume production.
“We have been more positively surprised by the vast majority of companies which expect to see little impact,” Zimmerman said.