Baxter Collaborates With Mayo Clinic to Open Renal Care Center

In a bid to develop a renal care center in the United States, Baxter International Inc.BAX and Mayo Clinic have inked a collaboration agreement. The companies will form an outpatient clinic for chronic kidney disease management, home dialysis and in-center dialysis services.

Baxter has accelerated the pace of acquisitions and strategic collaborations to enhance portfolio. Earlier this month,the company announced collaboration with the University of Southern California Center for Body Computing ("USC CBC") to develop innovative digital solutions to save and sustain lives.

Baxter has a Zacks Rank #2 (Buy).

More About the Renal Care Center

The renal care center will be established at the Mayo Clinic Dialysis Center in Jacksonville, FL.

The collaboration will integrate Baxter Renal Care Services' proven clinical service model and CKD management program with Mayo Clinic's recognized excellence in care.

Five-Year Agreement Between Baxter & Mayo

For investors' notice, the collaboration is the first initiative from the Baxter and Mayo Clinic five-year agreement that was announced earlier in 2017.

Per the agreement, researchers and clinicians of the companies will work toward the treatment of kidney diseases, with additional projects planned in other areas.The collaboration focuses on new research and developments to bring innovation across different therapeutic areas.

The agreement has been signed for a five-year period, with a five-year renewal option.

Baxter: Leading Player in Renal Care Space

Baxter provides renal care services across Asia, Europe and Latin America. Global sales in the renal care segment were $931 million in the last reported quarter, up 4% on a constant-currency basis (cc). Performance was driven by solid growth in peritoneal dialysis ("PD") therapies globally as well as improved international sales for the hemodialysis ("HD") business.

For more than 60 years, Baxter has been a leading provider for HD and PD. New therapies like expanded hemodialysis (HDx) and remote patient management has fortified the company's position in the renal care space.

The renal care products include AMIA Automated PD System with SHARESOURCE Remote Patient Management System, SHARESOURCE Remote Patient Management System, BICART Cartridge, Cartridge Blood Set, DIACLEAR Ultrafilter, DIASCAN Monitoring System, EXELTRA Dialyzer High-Flux, Single-Use Dialyzers, PD Simple Paks, POLYFLUX 6H Dialyzer and others. All these products enjoy high demand and have been significantly contributing to the company's top line in the past two quarters.

Baxter expects strong growth in global demand for continuous renal replacement therapies. Coming to guidance, Baxter continues to expect growth of around 3% to 4% at cc in the renal care segment in 2018.

Market Prospects

A research report by BusinessWire suggests that the global renal dialysis market is expected to witness a CAGR of 4.7% during the 2017-2021 periods.

Stock Performance

Baxter has underperformed its industry in a year's time. The company's shares have rallied 23.4% compared with the industry's rise of roughly 25%. Nevertheless, the current level is higher than the S&P 500's return of 15.9%.

In spite of strength in the renal care business, sluggishness in the Medication Delivery and Clinical Nutrition units are headwinds. Additionally, persistent pricing pressures are concerns.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Surmodics, Inc SRDX , Masimo Corporation MASI and Veeva Systems VEEV .

Surmodics has a long-term expected earnings growth rate of 10%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Masimo's long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.

Veeva Systems' long-term earnings growth rate is estimated at 19.3%. The stock sports a Zacks Rank #1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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