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Baxter's Spain Plant FDA-Approved for Saline Production - Analyst Blog

Zacks Equity Research
Updated

Baxter international Inc. BAX recently announced that the FDA has approved one of its facilities as an additional manufacturing site for Sodium Chloride Injection, more commonly known as saline.

The company had submitted a supplemental drug application to establish its Sabinanigo, Spain, facility as an approved manufacturing site for 0.9% Sodium Chloride Injection, USP, for the U.S. market.

We note that the additional site approval comes amid increased industry demand for sterile Intravenous (IV) solutions, which are very critical for treatment in a health care setting. These solutions have a wide range of applications which include regulation of blood pressure, hydration, electrolyte balance, medication and nutrition delivery.

Over the past two years, the U.S. has been facing a serious shortage of certain IV fluids, mainly normal saline. This market in the US is primarily served by Baxter, Hospira Inc. HSP and Germany-based B. Braun.

According to the FDA, the dearth of saline solution was particularly triggered by a surge in demand owing to escalating flu cases. Moreover, the temporary shutdown of Baxter’s manufacturing plant last December worsened the situation.

In order to address the critical shortage, the FDA has been working in collaboration with several saline solution producers to ramp up the supply of this drug. The agency’s latest approval includes Baxter’s product presentations in 250 mL, 500 mL and 1000 mL bags, all three of which have been listed in drug shortage databases maintained by the FDA and the American Society of Health-System Pharmacists over the past two years.

In addition, FDA is temporarily exercising its discretion regarding the distribution of B. Braun’s saline product from Germany and Fresenius Kabi’s saline product from Norway, to help restore the supply of normal saline to U.S. hospitals and health clinics.

We believe that the FDA’s latest authorization will provide Baxter with greater flexibility to respond to market demand fluctuations for this critical product and meet important healthcare needs.

Stocks to Consider

Currently, Baxter carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the medical products industry are Bio-Rad Laboratories Inc. BIO and Vascular Solutions Inc. VASC. Both the stocks sport a Zacks Rank #1 (Strong Buy).

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HOSPIRA INC (HSP): Free Stock Analysis Report
 
BAXTER INTL (BAX): Free Stock Analysis Report
 
BIO-RAD LABS -A (BIO): Free Stock Analysis Report
 
VASCULAR SOLUTN (VASC): Free Stock Analysis Report
 
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