By Christy Santhosh and Kashish Tandon
(Reuters) -Baxter International is bringing its hurricane-hit IV manufacturing facility in North Carolina back online in stages, with a goal of restoring 90% to 100% of customer needs by the end of the year, the company said on Wednesday.
The outage of Baxter (NYSE:BAX)'s Marion, North Carolina plant, due to flooding from Hurricane Helene, could continue to limit the supply of intravenous fluids in the U.S., the U.S. Department of Health and Human Services warned on Wednesday.
The site makes 60% of the nation's supply of IV fluids and peritoneal dialysis solutions, or 1.5 million bags daily, according to the American Hospital Association.
The IV fluids are used to provide nutrients to the body or replenish fluids lost due to injury or illness.
Hospitals are beginning to curtail elective procedures and are reporting that they are managing closely the solution they give intravenously to each patient, Jefferies analyst Matthew Taylor wrote in a note. Managing solution includes controls on dosage, duration and flow rate.
Baxter, one of the four main U.S. suppliers of IV fluids, also supplies the product globally. It said it was increasing the U.S. allocation of its highest demand IV fluids for direct customers to 60% from 40% and for distributors to 60% from 10%, effective Oct. 9.
Germany's Fresenius said on Tuesday it was checking options to start new infusion-solution production lines faster than planned at a North Carolina facility to help mitigate the potential shortages.
The U.S. health department said it was working with other domestic IV solutions manufacturers to combat the supply crunch.
HOSPITAL OPERATORS
Virginia-based UVA Health University Medical Center said it was postponing some elective surgeries for the upcoming days because of the IV fluid shortage.
Los Angeles-based Cedars-Sinai Medical Center said in a statement that as a result of the interruption, "to actively conserve IV fluids, we have implemented contingency plans and are reviewing our IV needs" as they look for other ways to source IV fluids.
Hospital operator HCA Healthcare (NYSE:HCA) told Reuters it currently had adequate IV fluids and had contingency plans to maintain supply. Boston-based Mass General Brigham said earlier this week that it was only receiving about 40% of its usual supply of IV fluid from Baxter.
Earlier this week, the American Hospital Association wrote a letter to President Joseph Biden, urging his government to take action to address the supply shortage.
Evercore analyst Vijay Kumar said Baxter's fourth-quarter revenue could take a 1% hit due to the site damage, but should not affect its fiscal 2025 revenue if the majority of its production was resumed by year-end.
The U.S. health agency said Hurricane Milton, expected to make landfall in Florida on Wednesday, could also disrupt the IV fluid supply chain.
Two doses of Baxter's Dextrose solutions for low blood sugar and a saline solution were already in shortage, according to the U.S. Food and Drug Administration's website.
Hurricane Helene caused extensive damage across several states, killing more than 200 people in the deadliest named storm to hit the mainland United States since Katrina in 2005.