Baxter International ($BAX) is working to scale up its dialysis product manufacturing because it's been unable to meet demand. In September 2013, Baxter acquired Gambro for $4 billion, which is slated to be part of the core of the new medical products focus for Baxter, while a new company, Baxalta, will hold all the biopharma assets of the current company.
A recall that's just been disclosed by the FDA is working at cross-purposes to Baxter's dialysis expansion. The agency has published a Class 2 recall notice for 4.4 million of the company's MiniCap with Povidone-Iodine Solution that were distributed throughout the U.S. and in other countries including Canada, Austria, Norway, Portugal, Saudi Arabia and Spain.
"Baxter voluntarily recalled eight lots of MiniCap with Povidone-Iodine Solution, due to the sponge on the MiniCap in those lots separating from the cap, partially protruding from the cap, or missing. Customers may still order this product code, as other lots of the product code are available," commented Baxter spokesperson Jill Carey-Hargrave via email.
MiniCap is a plastic cap containing povidone-iodine, designed to isolate the connector of the solution transfer set used during peritoneal dialysis, which--unlike the more common hemodialysis--is typically used by the patient in an at-home setting to filter the blood of impurities without its removal from the body. During peritoneal dialysis, blood vessels in the abdominal lining, or peritoneum, substitute for the kidneys with the help of a fluid, or dialysate, that flows into and out of the peritoneal space.
The open recall is due to the possibility of separating or protruding sponges and the company first contacted its customers about it on Jan. 22. Baxter is urging its customers to return all of the involved MiniCap for a credit.
Baxter has already said it is working to ramp-up dialysis manufacturing because it's unable to meet existing demand. In August, Baxter said it would invest almost $300 million and hiring 200 people to expand its hemodialysis manufacturing in Opelika, AL. The newly expanded facility isn't slated to be complete until 2016. It's is also investing in Asia and North Cove, NC, to expand its dialysis and intravenous production.
"To address strong demand across our hospital products and renal portfolio, we announced plans to invest approximately $600 million to expand capacity and enhance production capabilities in several key markets and product areas, representing some of the greatest opportunities for future growth," Baxter Chairman, President and CEO Robert Parkinson said on a January earnings call.
He continued, "These include investments in Asia and at our North Carolina facility to support production of peritoneal dialysis and intravenous solutions. We're also executing on expansion plans at our state-of-the-art manufacturing facility in Opelika, Alabama to meet the growing global demand for dialyzers."
Baxter disclosed at least 9 recalls last year--mostly of various intravenous or injectable solutions with actions that were due to contamination. It has had quite costly infusion pump recalls that have unfolded over almost a decade; the company has taken about $1.5 billion in charges and adjustments related to recalls of its Colleague and Syndeo infusion pumps stretching back to 2005, according to the company's latest annual report.
The company's Medical Product sales were $10 billion in 2014, a gain of 15%, or 2% excluding the Gambro contribution.
Editor's note: Although the FDA recall notice classifies this product as a dialyzer, Baxter noted that the cap is used in conjunction with a connector during peritoneal dialysis. An earlier version of this story incorrectly referred to the cap as a dialyzer.
- here is the FDA recall notice