Baxter Enters into Exclusive Distribution Agreement with Sigma International for Infusion Pumps
Baxter Acquires Minority Stake in SIGMA with an Option to Purchase Remaining Portion of Company
DEERFIELD, Ill. — Baxter International Inc. announced today an exclusive three-year distribution agreement in the United States and international markets with SIGMA International General Medical Apparatus, LLC for infusion pumps. The agreement enables Baxter to immediately provide Spectrum™ large volume infusion pumps to customers and grants Baxter access to SIGMA’s product development pipeline, which will complement Baxter’s current infusion systems portfolio and next generation technologies.
“Baxter is pleased to team with SIGMA to expand our portfolio of infusion pumps, including the U.S.-cleared Spectrum™, which is equipped with advanced safety and clinician-friendly features,” said Kevin McCulloch, general manager of Global Infusion Systems, part of Baxter’s Medication Delivery business. “This agreement enables us to immediately support our U.S. customers and will reinforce our position as a leading global provider of infusion systems products.”
Spectrum™ is one of the latest generation smart pumps. Weighing approximately 2.5 pounds and measuring 1/10 the size of many other large volume pumps, it features a wireless connectivity option and smart pump technology intended to help reduce medication errors through the use of drug libraries that eliminate the need for clinicians to manually enter commonly used drugs and dosage rates. Spectrum™ uses standard, low-cost intravenous administration sets (the tubing that delivers fluid through the infusion pump to the patient) such as those manufactured by Baxter. Launched in the United States in August 2005 and developed and manufactured by SIGMA, the Spectrum™ pump has more than three years of established market performance. There are over 35,000 Spectrum™ pumps in use in the U.S., and with recent large Group Purchasing Organization awards received, adoption of the Spectrum™ pump is rapidly increasing. As the distribution agreement covers international markets, Baxter may seek approval for the Spectrum™ pump in additional geographies.
“We are excited to work with Baxter, a well-established leader in the infusion systems market, to more rapidly introduce and expand Spectrum’s™ presence in hospital and homecare settings,” said Roger Hungerford, founder and chief executive officer of SIGMA International. “This will also allow us to focus further on our research and development work, the very core of SIGMA.”
The agreement includes an upfront cash payment by Baxter of $100 million for exclusive distribution rights in the U.S. and international markets, a 40 percent equity stake for Baxter in SIGMA, and an option to purchase the remaining portion of the company in the future. Baxter may make additional payments of up to $130 million for the exercise of its option to purchase the remaining portion of the company as well as for the achievement of certain R&D, regulatory, and commercial milestones. The agreement is not expected to have a material impact on Baxter’s 2009 financial results.
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