NxStage Medical jumps on Baxter’s exit from the home hemodialysis market

Share prices for NxStage Medical (NSDQ:NXTM) jumped this week after Baxter (NYSE:BAX) CEO Joe Almeida said the company is pulling the plug on its Vivia home hemodialysis device. Almeida, speaking at the Goldman Sachs investor conference June 7, said he evaluated the home dialysis market after he took over the corner office in October 2015. “That is a very high hurdle, technologically speaking, because it’s a very difficult thing to achieve on an assisted basis,” Almeida said. In evaluating the market, Almeida said he looked at 2 companies in the home dialysis arena: San Jose, Calif.-based Outset Medical and Lawrence, Mass.-based NxStage. Outset “gave up in the home and and now is in very innovative and interesting things, [the] incentive to create self-service clinics,” he said, and NxStage has “good growth, but the cost for them to operate in the home is so high that they make no money.” “I looked at those 2 and said, ‘How much more money will Baxter have to put in this technology to be able to achieve a penetration rate that compensates the company for the amount of money that it needs to be put in to the technology, to finish the development, notwithstanding the fact that it’s a significant amount of capital that needs to be put in or cash for the clinicals and the reimbursement?'” Almeida said, noting that Baxter’s projections show negative cash flow for Vivia for the next decade. “Looking a...
Source: Mass Device - Category: Medical Equipment Authors: Tags: Dialysis Wall Street Beat Baxter International NxStage Medical Inc. Source Type: news