Baxter’s Renal Business Continues to Be Key Growth Driver



Renal business

In 1Q17, Baxter’s (BAX) renal segment reported revenues close to $896.0 million, which is an operational growth of around 2.0% on a YoY (year-over-year) basis. This segment is comprised mainly of technologies and therapies such as hemodialysis, peritoneal dialysis, continuous renal replacement therapy, and other dialysis technologies used to treat patients suffering from end-stage renal diseases, kidney injuries, or irreversible kidney diseases.

The above diagram shows the timeline for Baxter International’s new product launches in the renal home therapy space.

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Peritoneal dialysis and acute renal care

Baxter International is a market leader in peritoneal dialysis and acute renal care. Its peritoneal dialysis portfolio witnessed a mid-single-digit YoY revenue growth in 1Q17. It was mainly driven by an increased demand for home dialysis technologies as well as a rapid uptake of the company’s newly launched automatic peritoneal dialysis (or APD) cyclers—Amia in the United States and HomeChoice Claria in Europe. The company also plans to launch its Kaguya APD cycler in Japan in late 2017. The proprietary ShareSource software working on these APDs is also one of the most advanced telemedicine technologies used in this setting. Baxter competes with Fresenius Medical Care (FMS) in the peritoneal dialysis space.

In 1Q17, Baxter reported mid-single-digit YoY revenue growth for its acute renal care business. It includes two of the most commonly deployed therapies—continuous renal replacement therapy (or CRRT) and therapeutic plasma exchange (or TPE).

Baxter has already deployed its next-generation, leading-edge PrisMAX acute care technology at several European locations as part of its initial limited distribution program. Baxter plans a full commercial launch of this technology in Europe in 2018.

These growth drivers could help Baxter compete effectively with other medical device players such as Medtronic (MDT) and Boston Scientific (BSX). They could also have a favorable impact on the stock prices of the Vanguard Value ETF (VTV) since Baxter makes up about 0.25% of VTV’s total portfolio holdings.

In the next part, we’ll look at the challenges Baxter is facing in its renal business.


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