Dive Brief:
- Baxter International on Tuesday said it agreed to acquire Cheetah Medical, the developer of a noninvasive fluid management monitoring system called the Starling SV for up to $230 million.
- The device’s sensor pads are applied to the chest, enabling clinicians to assess heart function and fluid responsiveness to determine the amount needed for the individual patient to maintain optimal organ and tissue perfusion. The technology is designed for use in critical care, operating room and emergency department settings.
- Baxter agreed to pay $190 million in cash for Cheetah, plus an additional $40 million to be paid upon achievement of clinical and commercial milestones.
Dive Insight:
Deerfield, Illinois-based Baxter signaled its interest in accelerating growth through acquisitions at the beginning of the year. CEO José Almeida, on the company’s fourth-quarter earnings call in January, said Baxter was "very aggressively" looking for takeover targets to drive long-term growth in areas adjacent to its current business lines.
Cheetah fits the bill. Baxter called the company a "natural adjacency" complementing its leadership in infusion systems and intravenous solutions, deep knowledge of fluid management and strong presence in critical care and IV therapy.
Too much or too little fluid can increase the risk of mortality and complications for patients. Cheetah points to results from a University of Kansas Medical Center study presented in 2017 that showed effective fluid management reduced stays in the hospital intensive care unit by 2.89 days on average and lowered risks for mechanical ventilation and initiation of acute dialysis.
Baxter said it intends to incorporate Cheetah’s technology, alongside its IV infusion pumps, IV fluids and medications, into a new integrated platform for specialized patient monitoring now in development. The technology will enable better management of patients with sepsis, acute kidney injury and other critical conditions, as well as patients undergoing surgery, the company said.
Medication delivery is Baxter’s second-largest business unit, after renal care. The company has been projecting full-year sales growth of about 6% for the business, which is ahead of its forecast for total company sales growth of about 4%. The medication delivery business last year struggled to regain momentum after Hurricane Maria disrupted production at its company plants in Puerto Rico in 2017 but appears to be back on track.
The acquisition of Cheetah is expected to close in the fourth quarter. Baxter expects the deal to be immaterial to earnings in 2019 and 2020.
