Baxter at TD Cowen Conference: Strategic Shifts and Growth Ambitions

On Wednesday, 05 March 2025, Baxter International Inc. (NYSE: BAX) presented its strategic vision at the TD Cowen 45th Annual Healthcare Conference. The discussion, led by CFO Joel Grade and SVP Claire Trackman, focused on Baxter’s post-Kidney Care sale trajectory, CEO search, and ambitions for growth and innovation. While Baxter is navigating leadership changes, it remains committed to operational consistency and capital discipline.

Key Takeaways

• Baxter aims for a 4% to 5% organic growth rate and a 16.5% adjusted operating margin by 2025.
• The company plans to reduce its net debt to EBITDA ratio to three times by the end of 2025.
• Strategic acquisitions will be smaller, ranging from $250 million to $1 billion.
• Baxter is expanding its Novum IQ platform and focusing on its Advanced Surgery business.
• CEO search is underway, with both internal and external candidates being considered.

Financial Results

• Debt Reduction: Post-Kidney Care sale, Baxter paid down $3 billion in debt, aiming for a net debt to EBITDA ratio of three times by 2025.
• Capital Allocation: A buyback program is planned once debt targets are met.
• Growth Rate: Anticipated organic growth of 4% to 5%.
• Free Cash Flow: Targeting 80% conversion.
• Revenue: Q4 sales reached $2.75 billion, up 1% reported and 2% constant currency; full-year sales were $10.64 billion, a 3% increase.
• Adjusted EPS: Reported $0.58 for Q4 and $1.89 for the full year, exceeding guidance.

Operational Updates

• CEO Search: Both internal and external candidates are being evaluated to lead Baxter’s innovation and operational goals.
• Portfolio Management: Focus on smaller acquisitions and exiting underperforming assets, like the solutions business in China.
• Tariff Impact: Minimal due to localized manufacturing aligning production with sales regions.
• Hurricane Recovery: MPT plant fully operational post-Hurricane Helene, with no long-term share loss expected.
• GPO Contracts: Positive pricing momentum from contract renewals, contributing 100 basis points to pricing.

Future Outlook

• Long-Term Targets: Pending new CEO, Baxter suggests a 4% to 5% baseline growth and margin expansion.
• Capital Markets Day: Planned post-CEO appointment for strategic updates.
• Growth Drivers: New products, mix improvements, and Advanced Surgery growth are key.
• Novum Platform: Expansion with PCA and ambulatory pumps, plus geographic growth beyond North America.
• 2025 Sales Growth: Expected 5% to 6% increase, with adjusted EPS guidance of $2.45 to $2.55.

For a detailed review, refer to the full transcript below.

Full transcript - TD Cowen 45th Annual Healthcare Conference:

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: falling off the back of the stage on this thing.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Oh, yeah. Yeah, I know. I think we’re good. All right. We’re going to get started here in the last afternoon session of the forty fifth annual TD Cowen Healthcare Conference.

I’m Josh Jennings from the TD Cowen Medical Device Research Team, and we are lucky to have executives from Baxter joining us this year in Boston. We have Joel Grade, Executive Vice President and Chief Financial Officer and Claire Trackman, Senior Vice President and Chief Investor Relations Officer. Joel, Claire, thanks so much for joining us today and spending time in Boston.

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: Thank you for having us.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes, great to be here.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Absolutely. A lot’s going on in Baxter. It has been going on and is going on. And, one of the big changes is at the top of the top seat and the CEO search is ongoing. Maybe just help share kind of what you’re looking for in the next CEO and what they need to bring to the table that may be different than what Joe did for years.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes. So I guess I’d first of all say a couple of things on that. I mean, obviously, Joe has been around for nine point five years and certainly had a big impact on the company, led us through a lot of transformational work. And so do we, I think all view this is now here is our next opportunity as we head into a new Baxter future. And I think what I would say is the following.

I think that you, the CEO that we’ve been looking for is going to be, I think, reflective of sort of the way we view this company strategically moving forward. And that to me that really starts with how do we become an even more innovative company that is consistently rolling out new products, consistently going to market and in doing so accelerating our growth. I think the as we sold kidney, it allows us from a capital allocation perspective to really be even more focused on those high return projects that ultimately drive innovation and growth. And I think there’s an element of that, that we’d certainly love to see from a CEO. I think the I’d say operational consistency in terms of how we operate being a company that becomes more predictable, that becomes more consistent in terms of how we execute and drive operations.

And so I think on a macro level, taking take a strategy like this, kind of drive it through the company and really embedded in the DNA, the culture of the organization would

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: be

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: the way I would say is what the what we’re looking for in the CO. And I think just from the process standpoint, again, obviously, internal candidates as well as external candidates, I think the Board is doing a fulsome review of both.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Okay, great. And you kind of wanted to move into some portfolio management questions. And since the Hill Rom acquisition, Baxter sold the BPS business and VanTiv, where is Baxter in terms of completion of major portfolio management moves?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes. So I guess though, my answer to that is that on a kind of on a material level, I think we’ve settled into a place that I think we like and meaning to say what you should not expect is a certainly large scale acquisition or large scale, some disposition, if you will. That doesn’t mean that over time, we won’t continue to critically think about our portfolio and more tweaks than kind of large scale moves. Over time, I think we’d love to earn the right to be able to do some fold and tuck in deals that would supplement product areas that are adjacencies and things that could look to accelerate our both our WAM years and our growth in our markets. I think on the pruning side, if you will, I think continue to find opportunities whether it’s in products, whether it’s in geographies, certain things where we make sure we’re optimizing ourselves.

I think an example would be, we’ve talked a little bit about on our last earnings call, we’re looking to exit our solutions business in China. And that’s an area that was, I’ll call marginally profitable for us. And those are the types of things that we’ll continue to do over time. But I think again nothing of a material nature.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Okay. And just on the balance sheet, Baxter paid down $3,000,000,000 of debt following the Van Eps sale and the plan is to get to roughly three times net debt to EBITDA by the end of twenty twenty five. Can you just review some of the milestones to get to that target at the end of twenty twenty five? Anything we should be looking out for as over the quarter?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes, I would say, first of all, to start with, I feel good about our ability to progress towards that target. So maybe start with that. And I think obviously the couple of key milestones that have already happened is post separation of Vantiv. We had about $3,400,000,000 of after tax cash proceeds, $3,000,000,000 of which has already been used to pay down debt. We paid down our delayed draw term loan of $1,800,000,000 We paid down $1,000,000,000 off our twenty twenty six term loan and we paid off some commercial paper.

So key milestones there. I think the other part of that really obviously is the business that as we ultimately generate EBITDA and then free cash flow that until such time as we get to that point, we’ll be really primarily focused on paying down debt. But I don’t know what I call necessarily key milestones, but certainly our progress on our forecasted results and our ability to convert our earnings into cash. So the key elements of this

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: action is three times kind of the longer term target as well? How do you think about that?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yeah. Look, it’s obviously, it’s something that I think is a target level that allows our company to be both solidly in the middle of kind of investment grade land from a ratings perspective and at the same time allows for a very balanced capital allocation as a company, meaning the ability to invest in our business in the way that we should be investing in our business and the ability to return value to shareholders. We’ve certainly committed to a dividend. Obviously, we downsized it some related to the sale of Phantom and we look forward to reinstating our buyback program and as part of again a comprehensive and balanced capital allocation program. So I think three times leverage allows us to do that to not let our balance sheet be lazy, so to speak, but at the same time, comfortably in an investment grade space.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: And just thinking about your earlier comments just on maybe some tuck ins. I mean, have you guys kind of put a ceiling just in terms of size of an M and A transaction that would be fit in within the strategy or is that getting too deep?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: I guess my view of the world on that is and again, this is just a broad range, but I look at that as $250,000,000 to $1,000,000,000 deals, I think is probably a reasonable view of what I consider a whole market space.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Sure. The tariff question has come up. We kind of back to it as a global business. But any just wanted to see if there is any major changes or issues arising just from the formal announcements earlier this week with Canada and Mexico and China tariff issuances.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes. I heard about some of that. Okay. And actually, if I answer this question and you asked me five minutes from now,

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: we might have a different answer.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: But in all seriousness, I’ll maybe start with, you know, Canada and and China. Those are areas for us that actually, I call have very, very small, exposure for us. In terms of, you know, both both from a sales standpoint in China, we only got a couple percent at the most of our sales across all of China and Mainland China is even less than that. Our manufacturing exposure in China and Canada is is small. And, and so I I kinda look at those areas, as, again, really just up almost an completely insignificant risk.

From Mexico standpoint, we do have two plants from HST in Mexico. But again, having said that, I it’s for as an organization broadly, it’s fairly modest exposure. One of the things Baxter has done a good job of just broadly is where we sell where we manufacture in a lot of cases like even when we talk about the Canadian exposure. We have a high fairly high share in that country, and the majority of everything we do there is manufactured in Canada. I know there’s been some talk about tariffs even in The EU at some point.

And, but back to this point I’m making, significant amount of what is sold in The EU is actually manufactured in The EU. And so and likewise, we have a lot of, you know, our US business is is manufactured in, in The United States. So I guess I would just say broadly, certainly it’s an impact again from a company perspective. It’s not a again, it’s not a highly material impact for us, but certainly something to keep an eye on. And obviously, look at it’s still pretty early to tell.

We haven’t we’ve decided purposely not to come out with some quantification of this just based on what seems to be a kind of an ongoing moving target. Yeah.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Got it.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: A little bit there and we’ll see where it goes. Great.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: And I know there’s been a plan to host a Capital Markets Day and Investor Day and, but the CEO search is going to kind of determine that foundation, that price will determine when that when it happens. But I think previously, the expectation was maybe management would issue longer term targets, post eventive. So, but, how but it may it might be tough, you know, this new CEO and, until they get their arms around.

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: Exactly. I mean, I think that we had previously plans to do it. But in light of kind of the search for the CEO, I think that we’re just kind of pausing and we’ll give that candidate a chance to get familiar with the business and then determine when the capital we will do one. It’s just the timing obviously is highly dependent on whether it’s an internal candidate, external candidate, and where we go from there then.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Understandable. Should we think in 2026 maybe just as hard to know?

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: Yeah. I mean, ideally, but, you know, I’m not gonna, you know, put a time frame on it right now.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: I think the one thing I would just encourage, though, all, you all to think about is on that is, you know, we’ve talked about this four to 5% growth rate as something that I’d consider a really solid sort of baseline in terms of how to think about our company. And, you know, obviously, we certainly looked at, you know, to do things that would hopefully, you know, over time be able to accelerate that. But I think it’s really that 4% to 5% is something that, you know, as you’re thinking about long term target, I think it’s a reasonable way to baseline our company. And then we’ve also said that, you know, with the 16.5% that we talked about for 2025, percent. Over time that would be something we would continue to look to continue to expand as well.

So just I know that’s not a official long term guidance of any sort, but those are kind of things that

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: I would Yes.

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: And the free cash flow, we’ve targeted the free cash flow as well, 80% free cash flow conversion. So, yes.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: That’s helpful. Thanks. Wanted to talk about MPT business and North Cove remarkable recovery process from Hurricane Helane and production is back to pre hurricane levels. Some customers you’ve relayed almost uniformly committed to supply from Baxter despite potentially having taken on another supplier. But maybe just address those dynamics and your comments on what the recovery process is hold and want to be a permanent impact to the IV Solutions business.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes, sure. So I think number one, just as I always get a chance to shout out to the team in terms of how that recovery process has gone. I think there is a, understandably, a lot of anxiety around what that might look like over the long term. You know, our our plant at this point is now actually back up to 100% of its capacity. And and so, that is just a huge tribute to a lot of work that was done, and I’m not sure there’s a lot of companies that could have pulled that off in this way.

So just maybe start with a start with a shout out there. I think, you know, in terms of kind of where we are on from a customer and a production standpoint, I’d say a couple of things. Number one, maybe I hit a punch line. We don’t anticipate a long term share loss as a result of this impact that happened. Certainly, in the immediate term that followed, there certainly was replacements that needed to happen.

But I could tell you, I think we have come out of this. At the time, we said, hey, this could be our finest hour when all this happened. And I think we came out of it in a way that our customers have been very, very pleased with the way we reacted to this. And so the confidence I have in their level of commitment to us as a company in that product space, again, over the long term, I think we feel really good about. Couple of other things I’d say.

Certainly, there was some conservation that happened along the way and then obviously I think is still to some degree building back. I think the when I talk about being at 100% production right now, we’re essentially selling every case we produce, whatever bag we produce. What we’re still doing though is working to continue to reestablish what customer may have had on hand that is at the moment less than what they may have on hand today. And so I think that process of somewhat building back some of those stocks is something that is continuing to happen. That’s over the certainly I think we see that continuing over the first half of the year.

And we head into the second half of the year, I think getting back to a little bit more normalized state as it relates to that. And then entering the fourth quarter with obviously an ability to have a pretty strong comparison to the impact that we had in the fourth quarter of twenty twenty four.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Great. Great. And just on GPO contracts, you’ve shared that two major U. S. Contracts starting January 1 and February 1 reflected favorable commitment levels to Baxter and some positive pricing momentum.

Maybe can you quantify the pricing comment and maybe sense of magnitude and timing of the positive price premium?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes. So what we’ve talked about on that is that the we anticipate about 100 basis points on an enterprise level from a pricing perspective. And as a result of this work on the GPO is that that is, I’d say, primarily kicking in, if you will, around February 1 for the majority of that impact. So the but the negotiation itself, these are now complete. This is another really important part of the work.

And again, you think about the work that was done, this this happened during the the aftermath of a hurricane. And and so, you know, there was, again, a lot of I think there’s some anxiety around what that would look like. We came through that very well. I think, and again, we’re now past that point. And again, that pricing should start to kick in February 1.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Are there any upcoming GPO contract renewals of note this year or

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: that

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: could impact pricing positively?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: So, yes, so not this year. So we’ve so two out of the main three were negotiated in 2024 for this 2025 impact. The next the third one of significance is in, will be negotiated in 2026 to have a 2027 impact. Outside of that, I think what we continue to believe is we’ll we’ll have, I’ll call, modestly positive pricing in our normal years. So say 2026, for example.

But the third GPO won’t happen for a couple of years.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: And maybe leading into the margin improvement trajectory, pricing is a nice driver, but especially the 2025 can help to get you guys to that 16.5 target. But maybe how big of a component is pricing in terms of driving that margin uplift versus you know, some of the core business dynamics and operational efficiency programs that you guys are working on?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yeah. I mean, I think I’d call out a few things that are that are important components to this. Certainly, pricing is a significant one, but there’s a few others I’d call out. Number one is the continued impact of some of our new product launches that we’ve had across the organization. Even our for example, our Novum pump does have a come at a price premium to spectrum.

So there’s an element to that. The new product introductions across pharma are areas that ultimately are driving positive margin impact. So sort of categorizing it as generally new product introductions. The second is around what I’m going to call mix. So we had a headwind in 2024 from a business mix perspective that we actually anticipate being a contributor to margins in 2025 and beyond by the way.

Some of the recovery of HST as we head into 2025 is a margin accretive from a mix perspective. The transition of some of the in the last year in 2024, we had a fairly big dichotomy between our growth in injectables and pharma and compounding. Our anticipation in this upcoming year, we talked about 5% to 6% growth in pharma balanced between those areas. That’s a positive mix impact from injectables. Our things like our advanced surgery and MPT has been has had some good growth.

We anticipate that to continue and again margin accretive. So mix is another component of this as well. The third thing I would call out is our ISC. We continue to have our margin improvement programs at ISC that both are impactful of both absorption of increasing costs, but also our as the name suggests, improvement of our margin programs there as well. And I think finally, I would just say is that we, from a G and A perspective, look to continue to gain leverage on our growth.

So as we continue to grow and notice I didn’t say SG and A, there’s going to be continued investments in sales and marketing and certainly in R and D as well. But from a G and A perspective, some of the work we’re doing on stranded cost and those type of cost impacts over the course of the year will continue to drive leverage at March for improvement as well.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Awesome. The recovery of the HST franchise has become a focal point, but you guys have called it out and talked about some recent stabilization within the primary care market. There were some challenges last year, just declines in construction and shift away from retail primary care. But can you help us understand what your view is of the stability in the primary care channel? And are you seeing this new growth?

Or is it just headwinds subsiding a little bit? Or are you’re anniversarying the headwinds off of a softer comp?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes. I never consider this my most strategic comment, but it is a headwind subsiding where we have some better comparisons versus some of the significant headwinds we had in 2024 that we’re not anticipating in the same way in 2025. And I want to be clear, we’re not this doesn’t while we do see some level of recovery in the primary care markets, we’re not projecting some substantial growth vector change in that way. And again, stability, yes. But again, this is really as much as anything a recovery against some of the things that we saw in 2024 that we are not anticipating as significantly in 2025.

The other thing I would just maybe add as a and then part of your other your question, as part of HST overall, the other part though I would continue to call out as a positive is in the CCS part of that business. We’ve talked about now for a while in the last number of months about the size of the order book and some of the impacts that we’ve seen there. And in fact, in our U. S. PSS business, we had the latter part of the year some double digit growth in that area.

That was an area you’ll also recall was challenged in the beginning of 2024. We certainly see some of that continued momentum heading into 2025. And so I think when you combine some of that positive work, particularly again in USPSS and some of the recovery we talked about in FLC, we are looking to see some recovery in that business this year. And to be candid, we’re off to a decent start here,

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Start the year. Great. And you mentioned Connected Care Solutions and just wanted to maybe get a better handle on the recent evolution and where you are now currently in terms of realizing the vision tied to the combination of Hill Rom and Baxter during that acquisition process?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yes. Well, I would say so for CCS, part of again, some of the challenges we had in the early part of last year were really around there’s a couple of operational things we called out. But I would just say in general, there’s been a lot of work done to improve the mechanisms and the visibility to the way our orders come in and ultimately translate into sales. I think the you’ll recall we headed in the last January in 2024 with a very, I’ll call meager sized book of orders that actually came in very late in Q1. Okay.

This year, again, some of the improvements that have been made in terms of how we drive outcomes in that business, how we, again, focus on competitive wins. This has been part of the incentive change that we’ve made with some of our sales teams in that space as well. But driving competitive wins, focusing on really having, again, specificity and visibility to when these to the order book itself, but also then the timing of when they ultimately translate into revenues. That’s just kind of what I call operational sales work that’s significantly improved over the course of the year. And you can see some of the results of that as we head into this.

We have had some challenges OUS that, that we’ve worked through particularly in countries like France and and in in China to some degree with some anticipated government stimulus payments that have been slower than expected to come through. But again, we do expect that to stabilize over time as well.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Okay. You also mentioned OMI Q earlier in one of your answers and that launch has gone well as your team has described. Real strong growth in 2024. Maybe just help us think through whether that growth was driven by replacements versus winning share or combination of both and same continued momentum in the 2025, I think is the expectation.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: It is. And it is also both. Back to your point, Don, is this are these replacements of existing customers or these competitive wins? I think that the launch itself is something as a company we’re really proud of and has actually gone really well. And I, the product’s been extremely well received.

The demand level is high. We’re certainly in a replacement cycle for pumps. And so there’s a lot of people selling pumps right now. And we’re certainly one of them participating in that. We expect that to can replacement cycle to continue here for the next year, year and a half to two years.

But I think the the key part back to your original ask is, this is something that as we sold our spectrum pumps, we were we were taking share at a rate of about a point a year. We actually believe now that with Novum, we’ve actually doubled that. We’re taking a couple of points a share a year here. And the great thing for us is we got about a half a year out of that growth last year. And obviously, we’ll now get a full year of it here in 2025.

So feel good about that momentum. And then of course, the good news of that is, you know, the pumps themselves are not necessarily margin accretive by themselves, but the sets and the other things that go with that has been something we’ve seen a lot of success in as well and feeling really good about where we stand there.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: And the NovoIQ platform is going to continue to evolve. Maybe walk us through that and how that can add kind of additional layer of growth for the franchise.

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: And before I go there, I also wanted to say with Nova MyQ, a lot of the digital capabilities that we have with that platform really then leverage kind of you were asking earlier about the thesis behind HST and Baxter. And that’s what we’re able to do with Novum particularly is really leverage these digital capabilities across the portfolio and across both our HST, across our pharmaceuticals and across kind of the MPT. So that’s the promise and that was unlocked really with the Novum gateway. In terms of the platform, so we have the syringe and the LVP. Those have been launched in The US and in Canada.

And we’ll be focused on a PCA pump, which will kind of be on that same Novum. And then we’re also looking in an ambulatory pump as well. And then beyond that, we’ll look at to which markets outside The US and Canada that will further expand. So looking at targeted geographic expansion for the Novum platform going forward.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: And any just

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: help thinking about the growth in 2025 off of a tough comp? And I mean, it sounds like momentum is continuing, you’re going to outpace the market, but by a couple of points maybe.

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: Yes. I mean, I think that we’re expecting, again, solid growth out of our infusion systems business in 2025. I think to Joel’s point, we have the benefit of having now a full year launch of Novum there. But I think it will definitely be a contributor. We’ve called for MPT to grow approximately 5% this year.

And that does reflect some to Joel’s comments earlier, just some conservatism earlier in the year as we think of conservation kind of potentially impacting some IV utilization. But then the ramp of Novum really in the first half of the year and then through the remainder of 2025.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: And Advanced Surgery was touched on earlier, but just to build on that, mid single digit growth this year in 2025, I mean, to help us think about volume versus pricing and is why I’m really tracking a surgical procedure volumes where there’s some competitive dynamics that are helping or maybe turning into a headwind, mild headwind or how are the competitive dynamics shaping up, I should say.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Yeah. I’ll start and then Claire can add anything she wants to add to this too. I think, first of all, back to your kind of pricing and volume quota. One of the things that actually was a driver of growth in that area in 2024 was some OUS pricing, in particular in that space. That actually was one of the key drivers of our margin growth and pricing impact in 2024.

And so I think when you combine that with the fact that, again, we also continue to experience volume growth really across the global portfolio. So there’s good demand for that product both in and outside of The U. S. And we’re expecting that momentum to continue in terms of and again, in terms of surgical procedures and again, the sort of some of the key kind of drivers behind that. Again, it’s been favorable and obviously, we’ve had some new and interesting products as part of that as well.

Anything you’d add to that?

Claire Trackman, Senior Vice President and Chief Investor Relations Officer, Baxter: No, that’s exactly right.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Maybe just a last touch on that last answer part of your answer just maybe the pipeline in advanced surgery, how is that going to contribute to sustained mid single digit growth or even driving a little bit higher?

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: So certainly, we look at advanced surgery broadly as one of those areas where when we talk about, mix improvements, it’s an area that again has some growth potential and obviously at a higher margin. And I think over the longer term, the pipeline for that certainly has both organic and potentially inorganic opportunities. And so when you talk about some of the fold in, tuck in type opportunities that are get some adjacencies along the areas that could even further accelerate that, we certainly do see that as one of those areas that, from an overall focus on growth standpoint, we could have again in both cases, helping accelerate that.

Josh Jennings, TD Cowen Medical Device Research Team, TD Cowen: Outstanding. Joel and Claire, thanks so much for letting us host the fireside chat and thanks so much for covering so much ground. Appreciate it.

Joel Grade, Executive Vice President and Chief Financial Officer, Baxter: Absolutely. Thanks, everyone. Appreciate

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