- Baxter on Thursday reported first quarter revenue of $2.8 billion, an increase of 6% on a reported basis and 8% on a constant currency and operational basis. CEO Joe Almeida told investors during an earnings call that the company has seen "extraordinary" demand for its portfolio of critical care, hospital, and renal products in response to the coronavirus pandemic.
- Almeida pointed to higher demand for PrisMax and Prismaflex, the company’s blood purification systems used to treat acute kidney injury and other conditions, as well as its Mini-Bag Plus drug delivery system, Spectrum IQ Infusion System, IV solutions, parenteral nutrition therapies, and injectable drugs used in the ICU and other hospital settings. Almeida called growth strong across all segments and regions.
- At the same time, Baxter sees a "challenging" second quarter, according to CFO Jay Saccaro, who said due to uncertainty around the potential financial impacts from the pandemic the company is not providing guidance for the second quarter or full year. In addition, it suspended its share repurchase program.
The surge of COVID-19 patient hospitalizations significantly boosted demand for Baxter's products in the last two weeks of the first quarter compared to normal ordering levels. In particular, five of the company's core businesses — acute therapies, clinical nutrition, medication delivery, pharmaceuticals, and renal care — experienced ramped up demand, according to Almeida.
"We estimate that the COVID-19 related demand contributed approximately $45 million to sales in the quarter," said Saccaro, who noted that increased demand for IV solutions and Mini-Bag Plus drug delivery systems contributed about $15 million to performance in the quarter. He also estimated that sales of its clinical nutrition portfolio added $5-10 million due to increased use of the products for COVID-19 patients in ICUs.
At the same time, Almeida reported that given the slowdown in elective surgeries as a result of the pandemic, demand for Baxter surgical products declined in the first quarter and is expected to continue to decrease throughout the second quarter.
"Beginning in late March, declines in elective surgeries drove an estimated negative impact of approximately $10 million for the advanced surgery portfolio," added Saccaro. "We anticipate a continued negative impact on growth for this business related to declines in elective surgeries globally."
However, a big winner in the first quarter for Baxter was its acute therapies business which generated sales of $156 million, representing 23% growth on a constant currency basis. In particular, the company saw a surge in demand for its continuous renal replacement therapy for treating acute kidney injury.
Saccaro noted that early studies suggest 15% to 30% of patients with severe forms of COVID-19 develop acute kidney injury, a condition in which kidneys suddenly stop working and can include an overreaction of the immune system to the virus, known as cytokine storms, leading to high levels of inflammation.
The FDA last week granted emergency use authorization for Baxter's Oxiris blood purification filter, which the company contends is the only filter set available in the U.S. designed to reduce pro-inflammatory cytokine levels, including for use in CRRT, in COVID-19 patients admitted to the ICU with confirmed or imminent respiratory failure.
Still, Almeida said: "We don't have enough data on the coronavirus impact on the filter. We're just in the very beginning to use it in the U.S."
Baxter is working with FDA and industry partners to collect the data with an eye towards staying on the market even after the pandemic, he added.