Baxter International

Business in Russia

CJSC Baxter Company was registered in Russia on January 22, 1993.

"Baxter" in Russia began with a small office in a four-room apartment in the center of Moscow. The main products for the company in the mid-1990s were the Rinal and transfusion therapy product line, as well as surgical tools for areas such as general surgery, cardiovascular surgery, otolaryngology, ophthalmology, urology. The instruments were produced at the MosMed enterprise, joint with the Research Institute of Automation and Instrument Engineering.

The first regional representative of the company appeared in Tyumen in 1994. Since the mid-1990s, Baxter representatives have been working in St. Petersburg, Yekaterinburg, Samara, Novosibirsk, Khabarovsk, Kazan.

Gradually, the company's portfolio expanded - in the early 2000s, hospital pharmaceuticals and biotechnology products, including vaccines, began to enter the Russian market.

In 2004, Baxter opened an office in St. Petersburg, in 2006 - in Samara.

Performance indicators

2022: Losses - $2.4 billion; dismissal of 5% of employees

The American medical company Baxter announced a reorganization, during which the staff will be reduced by about 5%. This is stated in the financial report published on February 9, 2023.

Baxter's revenue in 2022 reached $15.11 billion, an increase of 18% compared to the previous year. In the United States, sales rose by 39%, amounting to $7.2 billion, and in the international market - by 4%, being at the level of $7.9 billion. The company's net losses in 2022 were recorded in the amount of $2.4 billion.

In response to "significant macroeconomic challenges," Baxter began implementing a cost-cutting program. The company is preparing a number of changes in its organizational structure, which are designed to significantly simplify the operating model, provide strategic clarity, increase efficiency and accelerate growth in the long term. Baxter intends to consolidate its operations into four vertically integrated global business units focused on broad therapeutic areas. These initiatives are expected to deliver total savings of more than $300 million in 2023. However, the reorganization will also lead to a 5% reduction in the global workforce.

Despite the prospects ahead of us, the restructuring program will include some difficult decisions. We will take these necessary steps with the utmost care and tact. Persistent macroeconomic complexities and supply chain disruptions continue to affect business performance, highlighting the need for decisive action to create value for patients, shareholders and other stakeholders, "said José [Joe] E. Almeida, Chairman, President and CEO of Baxter.[1]

2020: Revenue growth 3% to $11.67 billion

Baxter ended 2020 with revenue of $11.67 billion, 3% higher than a year ago.

The largest turnover of the company in 2020 fell on products for renal therapy - $3.76 billion, which is 3% more compared to 2019. On the market of infusion systems and kits for intravenous administration of drugs, the annual revenues of the American manufacturer decreased by 2%, to $2.74 billion.

The volume of the pharmaceutical business decreased by 1%, to $2.12 billion. In the direction of surgical solutions (Advanced Surgery), revenue for 2020 amounted to $888 million, an increase of 1% compared to 2019.

Clinical nutrition supplies brought Baxter $922 million in revenue for 2020. Compared to 2019, the income of this business increased by 6%. In the segment of solutions for intensive care, the company's annual turnover grew by 38% (the highest dynamics among all divisions) and reached $740 million. The remaining sources of income combined provided Baxter with total revenue of $508 million, which is 5% higher than the result of 2019.

The largest market for Baxter remains the countries of the Americas, where the company earned $6.07 billion at the end of 2020, which approximately corresponds to the result of the previous year. In the EMEA region (Europe, Middle East, Africa), the company's turnover grew by 5% to $3.13 billion, and in the Asia-Pacific region the rise was even stronger - by 8% (to $2.48 billion).

Baxter's net profit at the end of 2020 reached $1.11 billion, which is slightly more than a year ago ($1.01 billion).

It also follows from the company's report that its capital expenditures in 2020 increased to $709 million from $696 million a year earlier. Free cash flow decreased from $1.41 billion to $1.16 billion.

Baxter 2020 Financial Report

History

2024: Baxter's defective breathing equipment suddenly shuts down during operation

On June 26, 2024, the US Food and Drug Administration (FDA) announced the recall of the defective Baxter Life2000 ventilators. The detected defect can lead to a sudden shutdown of the device during operation. Read more here

2023

Baxter recalls defective infusion pumps from which patients receive insufficient medication

On November 15, 2023, the US Food and Drug Administration (FDA) announced the recall of the Baxter Novum IQ syringe infusion pumps. The use of these defective devices may result in patients receiving insufficient drug volume. Read more here.

Spin off the kidney technology business into a separate company

On July 25, 2023, Baxter announced the spin-off of a technology business to treat kidney disease into a new company called Vantive. Read more here.

Advent International bought BioPharma Solutions for $4.25 billion

On May 8, 2023, Baxter International announced that it had signed a definitive agreement to sell its BioPharma Solutions division. Investment firms Advent International and Warburg Pincus will act as buyers, and the deal will amount to $4.25 billion. Read more here.

Baxter warned of marriage in its breathing equipment

On March 10, 2023, Baxter International reported a defect in breathing equipment. Marriage leads to insufficient oxygen saturation of the blood, which can result in irreversible consequences for patients and even death. Read more here.

Opening of Baxter Renal Care

On January 6, 2023, healthcare company Baxter announced plans to reorganize the business. The Renal Care and Acute Therapies units will be spun off into a stand-alone public structure. Read more here.

2022

Baxter warned of marriage in its devices to treat lung disease at home

On June 2, 2022, Baxter issued an urgent warning regarding the operation of Volara's Oscillation and Lung Expansion (OLE) system. It was developed by Hillrom, which Baxter acquired for $12.5 billion in 2021. Read more here.

Detection of defects in infusion pumps

On February 18, 2022, Baxter issued an alert in which it reported that incorrect adjustment of administration parameters or incomplete elimination of occlusion alarms could lead to reduced delivery or non-delivery of drugs in the company's infusion pumps. In some cases, the problem may occur without users receiving alarms from the pump. The problem concerns all Spectrum V8 infusion pumps as well as Spectrum IQ. The manufacturer sells this equipment in the United States, Puerto Rico, Canada and some Caribbean islands. Read more here.

2021

$12.4 billion purchase of medical device maker Hillrom

In early September 2021, Baxter announced the acquisition of Hillrom for $12.4 billion. This amount includes the debts of the sold manufacturer of medical equipment. Read more here.

Recall of defective infusion pump software

In mid-August 2021, it became known that Baxter was recalling defective software for Baxter Dose IQ infusion pumps. The US regulatory authorities assigned the recall to Class I, designating it as the most serious type of recall, that is, defective software can lead to the development of serious health disorders or death. Read more here.

2020

Baxter recalls defective Sigma Spectrum infusion pumps

At the end of October 2020, Baxter began recalling hundreds of thousands of Sigma Spectrum infusion pumps. The manufacturer warns medical institutions that improper cleaning can cause corrosion of the case around the batteries and malfunction of the device with serious consequences for the patient. Read more here.

The US authorities warned of an easy hack of Baxter medical equipment. It does not use encryption

In mid-June 2020, the US Department of Homeland Security warned medical professionals that Baxter devices do not use encryption and could become an easy victim of hackers. Read more here.

Recruitment to increase production during the pandemic period

On April 21, 2020, Baxter informed investors that the company had decided to hire 2,000 permanent and temporary workers, including 800 in the United States. Active recruitment is carried out in order to increase the production of materials necessary to combat the COVID-19 coronavirus.

Baxter noted that after the outbreak of the virus, the demand for the company's products increased significantly, as a result of which there was a shortage of devices for kidney dialysis, infusion pumps and consumables necessary for critically ill patients. In April 2020, the American manufacturer of medical equipment began to take measures to eliminate this problem.

Baxter spokeswoman Lauren Russ said in an email to MassDevice that the company "is hiring various specialists to help meet the growing demand for products in Baxter's portfolio."

According to her, all Baxter enterprises are operating at the limit of their capabilities, and the company "is doing everything to help hospitals and supply more devices and medicines in high demand."

In a separate statement to shareholders, Baxter said it was directing vital products to where they were needed most, based on public statements from health authorities. The company promises to maintain access to its products to current customers, as well as provide additional supplies to hospitals around the world with the greatest care needs for COVID-19 patients and will regularly update stocks depending on the situation.

The company also said it has strengthened measures to ensure the safety of workers, including those related to the spread of the infection. Among them are the restriction of contacts of workers, the introduction of symptom control and the provision of personal protective equipment.^[2]

Baxter overestimated revenues for years and attributed $276 million to itself

In mid-February 2020, it turned out that Baxter overestimated revenues for four years and attributed $276 million to itself.

The company said it obtained the data in an internal audit of foreign exchange trading operations. The investigation is all but complete, the company said in a statement sent to the Securities and Exchange Commission.

Baxter claims that the company's income was inflated by $40 million in 2016, $117 million in 2017, $77 million in 2018 and $42 million in the first half of 2019. The company said it expects to file its revised third and fourth quarter 2019 financial statements and annual report by March 31, 2020.

The problem was foreign exchange transactions. It turned out that the company used an outdated exchange rate agreement that did not comply with generally accepted US accounting principles (GAAP).

Apparently, the outdated exchange rate agreement has been in use for at least 10 years, Baxter officials who conducted the review said. 

The misrepresentation of accounting records we referred to the Securities and Exchange Commission is an important step forward in our internal investigation, the company said in an emailed statement to MassDevice. - But it is important to note that these distortions of exchange rate gains and losses are non-operational. This means that they are not related to our core activities and their results.

By the end of March 2020, Baxter expects to announce full third quarter and fourth quarter 2019 review results and submit revised financial results to the Securities and Exchange Commission.

We take this issue very seriously, "the company said.[3]

2019

Buying Seprafilm Surgical Materials Business

In early December 2019, Baxter bought Seprafilm's surgical materials business from Sanofi for $350 million. The deal is due to close by the end of the first quarter of 2020. Read more here.

Baxter was caught in currency exchange fraud

At the end of October 2019, Baxter shares fell sharply after the company was caught in currency exchange fraud. Internal audits have shown that violations in the field of trade with settlements in foreign currency have been going on for five years.

The company said it had engaged outside lawyers and consultants to investigate internal transactions. These transactions used currency exchange transactions that "did not comply with generally accepted accounting principles" and resulted in certain misstatements in Baxter's earnings report. Net profit from the difference in exchange rates used by the company amounted to $8 million in 2014, $113 million in 2015, $28 million in 2016, $50 million in 2017, $73 million in 2018 and $22 million in the first half of 2019, the official statement said.

These results can be adjusted once the investigation is complete. Baxter said it had already notified Securities and Exchange Commission USA its investigation, which is likely to delay the quarterly report. In addition, the ongoing investigation prevented Baxter from comparing the performance of the divisions with previous years and making recommendations for 2020.

Baxter takes this matter very seriously, and the board, together with the company's management, fully supports the comprehensive investigation, "said Joe Almeida, Chairman and CEO of the company. - The company has already taken a number of measures to strengthen internal control.

The company's management also announced that it plans to "correct some internal documents that affect operating income, but are not significant to previously submitted reports on the company's activities."^[4]

Purchase of infusion monitoring systems developer Cheetah Medical

In mid-September 2019, Baxter International announced that it was ready to acquire Cheetah Medical for up to $230 million - $190 million in an initial deposit, as well as an additional $40 million to be paid upon achieving certain clinical and commercial results. Read more here.

Investing $0.5 billion in home dialysis

At the end of July 2019, Baxter announced that it was ready to invest $500 million in home dialysis. This manufacturer's decision is probably related to the proposal of the Trump administration and the Center for the Service of Medical Assistance Programs for the Elderly, Disabled, Poor and Poor (CMS), which are ready to additionally reimburse the cost of purchasing innovative dialysis equipment and materials.

In a profit report, the company's CEO Joe Almeida said the hemodialysis equipment company plans to invest $500 million in business development to significantly increase production capacity and serve new patients in the transition to home dialysis throughout the United States.

General Manager of Baxter Renal Care Laura Angelini emphasized that the initiative to maintain kidney health in the United States provides for a one-time policy of innovations to improve the quality of life of people with kidney disease.

End-stage kidney failure is one of the few diseases in the U.S. whose treatment costs are fully covered by the insurance company regardless of the patient's age. According to CMS data, 430,000 people spend about 12 hours a week connected to a dialysis machine by the end of July 2019.

Amid growing criticism of the inefficiency of such a system, the Trump administration in early July 2019 introduced an executive order prioritizing earlier detection of kidney disease, as well as treatments for end-stage kidney disease such as kidney transplantation and home hemodialysis that do not require a patient to be in the clinic.^[5]

Purchase of software developer for data analysis in medical equipment

In late January 2019, Baxter announced the acquisition of True Process, a developer of data analysis software from medical devices. Read more here.

2018: Revenue growth 5% to $11.13 billion

In 2018, Baxter International sales increased by 5% compared to 2017 and reached $11.13 billion. Most of the revenue is still generated by the direction associated with the release of equipment for the treatment of kidney diseases. Revenue in the corresponding division amounted to $3.66 billion against $3.48 billion in 2017. This rise was largely due to the high demand for technologies for renal therapy in acute and chronic diseases.

Baxter's second largest line of business is the sale of infusion systems and intravenous drug kits. On the relevant products, the company earned $2.67 billion in 2018, which almost corresponds to the indicator of one year ago.

In the direction of surgical solutions (mainly consumables), an annual turnover of $800 million was registered, while in 2017 it was measured at $707 million.

The volume of the pharmaceutical business for the year increased from $1.88 billion to $2.09 billion. Sales of products for parenteral nutrition, including solutions, container systems, mixing technology and vitamin-mineral mixtures, in 2018 turned out to be $877 million, a slight decrease compared to the previous year ($882 million).

Technologies and intensive care drugs brought Baxter about $517 million in revenue in 2018. In 2017, it was $456 million.

The company generates the lion's share of sales in the Americas: in 2018, it was about $5.97 billion, which is 4% higher than the previous year's revenue. In the EMEA (Europe, Middle East, Africa) market, revenues rose by 8% (to $2.96 billion), in the Asia-Pacific region - by 5%.

Baxter completed 2018 with a net profit of $1.62 billion, which is 125% more than in 2017.^[6]

2017

Revenue growth by 4% to $10.6 billion

In 2017, Baxter International's revenue amounted to $10.6 billion, an increase of 4% compared to the previous year. Net profit decreased from $5 billion to $717 million. The high profit in 2016 was due to a one-time earnings of $4.4 billion received from the sale of shares.

In addition, in 2017, the company had expenses of $461 million related to business optimization, amortization of intangible assets, the merger of Claris and the deconsolidation of Venezuelan business.

International activities brought Baxter about $6.1 billion in revenue in 2017. Compared to 2016, there was an increase of 2%. In the United States, turnover increased by 6%, reaching $4.5 billion.

The Hospital Products division registered annual revenue of $6.6 billion, which is 5% more than a year ago. In the direction responsible for the production of equipment for the treatment of kidney diseases, sales increased by 2% and exceeded $3.9 billion, which was facilitated by high global indicators for products for renal therapy in acute and chronic diseases.

The manufacturer also noted a high demand for infusion pumps and systems for intravenous administration of drugs, as well as injectable drugs. The latter brought Baxter an additional $30 million from the acquisition of Claris.

In addition, the company reported growing sales of advanced surgical products and contract production services for cytotoxic drugs. Hospital Products lost about $70 million due to production damage caused by Hurricane Maria. Baxter's pharmaceutical business jumped 9% in 2017 (to $1.89 billion), and this rise was the largest among all the company's business areas.^[7]

Fine of $18 million for mold at the plant

On January 12, 2017, it became known that Baxter International would pay more than $18 million in fines for violations in the production of pharmaceutical products. This was reported by the Reuters news agency with reference to the US Department of Justice.

According to the agency, from July 2011 to November 2012, Baxter manufactured drugs in violation of the Federal Food, Drug, and Cosmetic Act, FFDCA, without following the GMP, Good Manufacturing Practice.

It turned out that the production of sterile solutions for intravenous administration at the North Carolina plant was carried out in the conditions of mold-contaminated HEPA (High Efficiency Particle Absorption) filters. An employee of the enterprise warned management about the existence of the problem, but the company continued to produce products in violation of sanitary standards.

Food and Drug Administration (FDA) inspectors confirmed the violation and ordered it addressed.

At the same time, the US Department of Justice did not find evidence that mold in air cleaners could affect the quality of intravenous solutions.

Baxter's press office told Reuters that the mould problems "do not meet the company's standards" and the manufacturer has taken action to fix them. In particular, several managers of the enterprise were dismissed, the process of training specialists and control over compliance with the requirements at the plant were strengthened.

As a result, Baxter entered into an agreement to postpone the prosecution and pay a fine totaling $16 million. The company will also pay $2.16 million as part of an amicable agreement with the federal authorities and the False Claims Act (FCA).

2016

Profit growth 5 times to $5 billion

In 2016, Baxter International's profit increased fivefold and revenue grew by 2%. The company is helped by growing sales in the American market.

The report, which Baxter provided to the US Securities and Exchange Commission (SEC), said that in 2016 Baxter's sales amounted to $10.16 billion against $9.9 billion a year earlier. Net profit reached almost $5 billion, while in 2015 it was measured at $968 million.

This inflow of profits occurred as a result of a one-time sale of shares in the amount of $4.4 billion. Part of this money ($817 million) went to the implementation of the so-called special items of expenses (among them - initiatives to optimize costs, amortization of intangible assets, repayment of debt, impairment of assets and costs of asset separation).

In the United States, the company's revenues rose 6% to $4.3 billion, while in the rest of the countries combined there was a decline of 1% (to $5.9 billion). Excluding currency fluctuations and the impact on revenue of competition in the cyclophosphamide market, the American and international revenues of the medical device manufacturer increased by 9% and 5%, respectively.

Annual sales of products for hospitals increased by 2%, reaching $6.3 billion. The high demand for infusion pumps and intravenous drug systems in the United States, as well as anesthetics and emergency care solutions at the global level, affected here.

At the same time, the company noted the falling sales of intravenous products in the world, the impact of optimizing the product portfolio and a decrease in production orders from Shire, which in 2015 acquired Baxter's subsidiary, Baxalta.

The sale of devices for the treatment of kidney diseases in Baxter in 2016 amounted to $3.9 billion, an increase of 2% on an annualized basis.^[8]

Purchase of Claris Injectables

In December 2016, Baxter International announced the purchase of the pharmaceutical company Claris Injectables for $625 million, taking into account the debts of the company being absorbed. It is planned to close the deal in the second half of 2017, first regulators must approve it. Read more here.

2012: Purchase of Swedish Gambro for $4 billion

In December 2012, Baxter International announced the acquisition of a Swedish dialysis equipment manufacturer, Gambro, a private company. The transaction amount is $4 billion. The deal is aimed at expanding Baxter's activities in the field of kidney disease therapy.

Gambro, headquartered in Lund, manufactures renal and hepatic dialysis equipment. The company was founded in 1964. In 2011, sales amounted to $1.6 billion. It has 7.5 thousand employees. Gambro at this time owned 13 manufacturing facilities in 9 countries.

According to Baxter, the financing of the transaction will be carried out at the expense of its own and raised funds^[9].

The 2000th

The creation of Ipump - a pain management system - a new infusion pump to reduce pain in the postoperative period.

A physioneal solution for peritoneal dialysis containing bicarbonate has been introduced into medical practice. This made it less annoying for many patients, which greatly improved the effectiveness of the procedure.

Neis Vac-C is approved - a new vaccine against one of the most dangerous varieties of meningitis.

Doctors and patients received a new hemofiltration system "Accura."

A new anti-hemophilic factor ADVATE has been developed and implemented - the only Factor VIII Recombinant in the world, created without albumin, human or animal plasma proteins. This eliminates the risk of infection with viruses that may be contained in these proteins.

New effective safe influenza vaccines are being developed.

Together with four other largest companies in the world working in the field, health care Baxter creates the World Health Exchange - an Internet company that promotes the exchange of information about the purchase, sale and distribution of medical devices, equipment, drugs, healthcare products and related products around the world. This allows both doctors and specialists and patients to quickly receive the information they need in a more complete amount, which ultimately contributes to the treatment and rescue of many people.

The 1990th

Clinical trials of Anti-SD45, a drug to prevent rejection of transplanted organs, were conducted, and a hemoglobin-based blood substitute was tested.

Doctors began to use those created at Baxter:

• an automatic system for peritoneal dialysis;
• Interlink system to reduce needle consumption;
• Intervoven, OffSite and Infusion systems;
• artificial ventricle of the heart "Novakor," allowing a patient who is at death to wait for a donor heart;
• laparoscopic chamber "Opsis";
• biogenerated anti-hemophilic Factor VIII Recombinant;
• Ultra system for outpatient peritoneal dialysis;
• Univox membrane oxygenator and heparinized systems for artificial circulation;
• Vigilance monitor for continuous cardiac output recording;
• endovascular prostheses;
• leukocyte filters for blood and its components;
• Amicus new generation blood cell separator and Ami-Print system;
• Isolex 300I Magnetic Blood Cell Separator;
• Opti-I and Opti-II optisystems, Optilink computer system;
• new modern anticoagulant solutions;
• meningitis vaccine.

The 1980th

The following has been introduced into medical practice:

• an immuno-reagent for rapid diagnosis of heart attacks;
• Klintek nutrition;
• automatic blood cell separators "С S -3000" and "С S -3000 Plus";
• anti-hemophilic Factor VIII: Hemophil M (monoclonal);
• portable infusion dosing systems;
• MicroScan microbiological system;
• ready-made frozen intravenous preparations;
• immunochemical analyzer Stratus and Paramax for blood.

1970s: First system for continuous outpatient peritoneal dialysis

The first system for continuous outpatient peritoneal dialysis has been developed.

Physicians and patients received:

• membrane oxygenator;
• Mini Bag container for intravenous drugs;
• Swan-Gantz catheters;
• biological prostheses of heart valves;
• Viaflex container for intravenous solutions;
• fibrin glue Thissucol.
• Baxter has established a system of effective ordering and delivery of products, which helps save and prolong the lives of thousands of seriously ill patients.

1960s: First prosthetic heart valve

• A bubble oxygenator has been created, making open heart surgery possible.
• The first prosthetic heart valve.
• Cardiac and surgical catheters of new designs and new materials, new types of disposable products for operating rooms: gloves, syringes, treatment kits.
• The production of Factor VIII anti-hemophilic concentrate was mastered.
• A plasmapheresis system for blood banks has been developed.

1950s: Artificial kidney created

• An artificial kidney was created, which saved the lives of many hopeless patients.
• New biocompatible types of plastics and containers have been released.
• A closed system for separating blood components has been developed.
• For the first time, the widespread use of human plasma began.
• The production of equipment and reagents for diagnostic laboratories has been established.
• Synthetic drugs for the treatment of thyroid diseases have been introduced.

1940s: Dialysis method used for the first time to treat kidneys

• "Baxter" intravenous solutions became the only ones approved for use in the U.S. Army during World War II.
• Single-use IV drips have been put into practice.
• The vacuum plasma container allowed it to be stored for further use.
• For the first time, a dialysis method was used to treat the kidneys.
• New reliable unbreakable plastic blood storage containers have been developed.

1930s: Blood collection and storage devices developed

For the first time in medical practice, devices have been developed for the collection and transfusion of donated blood, as well as sterile solutions for intravenous infusions.

For the first time, a sterile Baxter vacuum blood collection container allowed doctors to create blood banks. If before that the blood could be stored for only a few hours, then the new container provided storage of donated blood for 21 days.

Notes