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Hurricane-related IV fluid shortage could hurt medical device makers (Oct 17)
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Hurricane-related IV fluid shortage could hurt medical device makers (Oct 17)
Oct 18, 2024 9:28 AM

Oct 17 (Reuters) - A shortage of intravenous (IV) saline

fluids due to Hurricane Helene is forcing hospitals to defer

non-urgent surgeries, and could hurt companies that make medical

devices for elective procedures if the supply crunch persists,

analysts said.

Baxter International's ( BAX ) North Carolina plant, which

makes 60% of the nation's supply of IV fluids and some key

dialysis solutions, was closed for production late last month

due to hurricane-related flooding.

Since then, hospitals have postponed elective surgeries even

as the U.S. government, Baxter and other suppliers have rushed

to bring in supplies from other facilities, including from

overseas. Baxter has said it aimed to return to 90% to 100%

allocation of certain IV solutions by the end of 2024.

The big question for medical device makers is how soon the

shortage can be resolved, said Barclays analyst Matt Miksic in

an interview.

If resolved soon, "whatever gets pushed out of this quarter

will likely get picked up the following quarter in terms of

delayed surgeries," said Miksic. "We wouldn't expect at this

point (a) significant.. sustaining impact on the stocks."

J&J became the first medical device company to flag a

potential hit on Tuesday, when it warned that the IV saline

shortages could impact surgical procedures across its portfolio

if they persist.

During a surgery, patients are administered a normal saline

solution or a type of IV fluid called Lactated Ringer's to

replenish lost fluids.

Germany's Fresenius and medtech company B. Braun Medical

said last week they were ramping up production of IV fluids to

mitigate the shortage.

Device makers including Boston Scientific ( BSX ), Edwards

Lifesciences ( EW ), Medtronic ( MDT ) and Stryker, and

hospital operators such as HCA Healthcare ( HCA ) and Tenet

Healthcare ( THC ) are likely to face questions about the

potential impact from the shortage when they report earnings in

the coming weeks.

Baxter is expected to report its quarterly earnings on Nov.

8.

Given that the shortage is not expected to last too long,

the impact on hospital operators and other providers should be

modest in the fourth quarter, Jefferies analyst Brian Tanquilut

said in a Wednesday research note.

Morningstar analyst Julie Utterback said the recent storms

could be a "short-term concern" for HCA, and do not typically

change the long-term outlook for such hospital operators.

(Reporting by Manas Mishra and Christy Santhosh in Bengaluru;

Editing by Shinjini Ganguli)

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