By Manas Mishra and Christy Santhosh
Bengaluru: 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 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 expects to meet 90% of customer needs by year end.
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, Edwards Lifesciences, Medtronic and Stryker, and hospital operators such as HCA Healthcare and Tenet Healthcare 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)
