The coverage got worse yesterday since Baxter announced that it was recalling all the remaining lots of heparin and its related Hep-Lock product in a better-safe-than-sorry move by the FDA. The company isn't sure where the contamination that's causing the adverse reactions in some patients is coming from.
There may be a lot of media hype, but from an investment standpoint, this is much ado about nothing.
The recall shouldn't have much of a financial impact on Baxter. Sales of heparin are a minor fraction of the $11.3 billion in revenue that the company racked up last year, and the product has pretty low margins, so it'll affect the bottom line even less. APP Pharmaceuticals
The only potential problem for Baxter is that the company's reputation at hospitals might be on the decline. Combining yesterday's recall with the multiple recalls of its infusion pumps last year, one has to wonder if its sales reps are going to have trouble hocking other products.
Overall though, unlike Merck's