Q3 2019 Earnings Call

October 24, 2019

Thanks, Catherine good morning, and welcome to our third quarter 2019 conference call. Joining me today, our Jami Baxter's, Chairman and Chief Executive Officer, and Jay Saccaro, Baxter's Chief Financial Officer.

With that let me start are prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook, new product development business development and regulatory matters contain forward looking statements that involve risks and uncertainties and of course, our actual results could differ materially from our current expectation. Please refer.

Our investor presentation.

On the call. This morning, we'll be discussing operational sales growth, which adjusts for the impact of foreign exchange and generic competition for cyclophosphamide anyway, now I'd like to turn the call over to Joe So.

Assisted by experienced an outstanding fastest into misstate announcing our previously reported non operating income related to foreign exchange gains and losses.

These mistake knows were partly a result from the company's historical usable foreign exchange rate Convention, there was not consistent with gap. Our board audit Committee is overseeing the investigation with the assistance independent experienced external advisors, we voluntarily advice he has exceeded the.

The investigation is in its early stages, and we cannot predict its duration or outcome as a result, or we do not expect too far quarterly reports on Form 10-Q , four that period ended September Thirtyth 2019 on a timely basis upon completion of the investigation or evaluation of the mature.

Yes, part of any corrections to previously issued finance restatements. After completion of the non operating income investigation Baxter also expects to correct certain operational items. There were immaterial to its previously reported results of operations. These items include the impact of the use of the four.

No deal regarding investigation or we can sure beyond what we have provided in our press release, we therefore ask your questions. During the Q when a portion of this call be focused on our preliminary operating results business progress in innovation efforts with that I'll now turn the call over to John .

Okay.

Oh performance in the quarter in the third quarter global sales of $2.85 billion increased 3% on a reported basis and 5% on both a constant currency and operational basis.

Adjusted operating margin of 19.5% was driven by our solid topline performance and ongoing operational efficiencies.

Now I'll walk you through performance by our geographic segments in global businesses.

Starting first with our three geographic segments.

Moving to performance by global businesses Global sales for renal care were $918 million performance in the quarter was driven by strength in PD therapies globally with patient volumes advancing approximately 7% year over year, representing the highest quarterly patient volume growth.

Sales in medication delivery of $701 million represented the focused commercial execution of our U.S. hospital products team performance in the quarter benefited from strong sales of spectrum I Q infusion system in the U.S.

We're pleased with the ongoing improvement in the business, particularly in the United States.

Partially offsetting these results were lower sales of anesthesia in critical care products as well as rather block due to increased generic competition U.S. cycles, Fossilised sales totaled $41 million Warner.

Moving to nutrition total sales were $219 million driven by improved sales of multi chamber bags and micro nutrients globally.

International demand for automated nutrition compounding also contributed to performance in the quarter.

Third quarter sales reflect the efforts taken to rebuild our us business, coupled with our focus on new product launch execution.

Total it beats surgery sales were $216 million in the quarter performance was driven by strength of Hemostats is feeling which benefited by more than $10 $10 million in sales.

Third quarter sales in our acute therapies business of $130 million were driven by increased global demand for baxter's continuous renal replacement therapy is supported by the launch new products, including prismatic Baxter's next generation see our arty system.

Finally sales in our other category, which primarily includes our contract manufacturing services were $140 million in the quarter.

Moving through the rest of the PNM, our adjusted gross margin of 45.7% benefited from strong topline performance as well as part of the positive manufacturing variances.

Issues associated with our dialyzer supply constrain negatively impacted gross profit by approximately $15 million in the quarter.

Adjusted SG, they totaled $614 million as we strategically reinvest savings in general and me and administrative expenses to support our sales and marketing initiatives, while maintaining our disciplined focus on managing discretionary expenses.

Adjusted R&D spending the quarter was $134 million, we continued to fund our new product development programs to deliver on our innovation pipeline. While also realizing benefits from our ongoing optimization initiatives to optimize our R&D processes and the organization.

Adjusted operating margin in the quarter was 19.5%.

It is strong topline performance manufacturing efficiencies and ongoing efforts to improve operational effectiveness across the company.

Let me conclude by commenting on the sales and adjusted operating margin outlook for the fourth quarter of 2019, we remain confident in the health of our business and then strength of our commercial execution.

Given the ongoing investigation, we are providing limited guidance for the remainder of the year specific to the fourth quarter 2019, we expect sales growth of 3% to 4% on a reported basis and approximately 5% on both a constant currency and operational basis, we expect operating margin.

To be between 15.2, and 15.9% on a reported basis and between 18.5% and 19% on an adjusted basis.

Finally, I want to comment on our 2020 outlook. We're currently in the process of completing our annual operating plan and as part of that activity. We're considering several factors and their potential impacts. Some of these items include the proposed advancing American kidney health initiative and the related capital investments to support.

At this along with other government renal policy initiatives.

Capital investments in operational improvements, we are making to enhance our quality in manufacturing capabilities and the finalization of our agreements with various gpos in idea and in our US hospital products business.

As a result, it is premature to comment on 2020 guidance and beyond and beyond but anticipate providing more detail on our next earnings call.

With that I'd like to turn the call back over to Joe.

As James shared our strategic transformation yielded positive performance across all of our business units in regions in the third quarter. The fundamental health of our business remains strong and reflects our growing momentum we're continuing to drive operational excellence is strategically deploy capital to create shareholder value and advanced.

Well in innovation, our core areas, an attractive Ajay census, both through robust internal research and development and strategic business development you renal care. For example, we continue to believed advancing American give me health initiative will offer tremendous benefits to patients with home dialysis embraced as a frontline auction. We also continue to learn.

Sure our innovation pipeline in the space, including advancements in already established acknowledge that could have a transformative impact on the treatment of end stage renal disease, you medication deliver we're building on our leadership in IB infusion systems and solutions with internal innovation that is complemented by our expect acquisition ups you to medical.

Pharmaceuticals were continue to launch a steady stream of new molecules, including the recent introduction mixed redling, our new ready to use instantly phrase the infusion you some our business strategies objectives and kept their allocation philosophy philosophy remains unchanged. We are focused on addressing unmet patient and customer needs beyond.

In our pipeline and successfully launching products across the globe at the same time, we'll continue to actively pursue opportunities to extend our impact through strategic partnerships and business development initiatives. This all supports our goal to accelerate performance and deliver top quarter results for all stakeholders no open the call.

For Q and they keeping in mind that will be limit in our ability to comment beyond the details we shared this morning.

[noise].

Thank you.

Question and answer his question. If you have a question. Please press star one when you touched on telecom.

Okay, if you're using the speakerphone, please lift and said to ask your question.

So that we may be respectful of everyone's time. Please limit your comments to one question with one follow up question if necessary.

We'll pause a moment Wow the list is being compiled.

I'd like to remind participants that the call is being recorded.

Our first question comes from David Lewis with Morgan Stanley . Your question. Please.

Good morning.

When I get the fundamentals.

David as we said before Andy investigation is in early stages beyond what we shared in our press release I cannot provide additional information about investigation is ongoing so less let's move to but that business fundamentals.

Okay. So look given those effects to name a show obviously its clouding the reporting structure, but obviously underlying constant currency growth. This quarter was solid. So just first question is can you just give us a sense of your underlying business trends this quarter.

So David let me start with our medication delivery business. This is one that our investments have so many questions and paying a lot of attention that business was able to perform.

Slightly exceeded my expectations and I will say that.

Our version nine of our pump is doing very well extremely or it's a matter of fact, we finish our first full integration of bad debt bump in a choice system.

The hospital system in the southwest.

We have closed many many deals that I'm very excited about it.

We also are seen our.

Very stable business in our Ivy solutions is small and large volume retros with recovery.

Now in on its way in good contracts being signed some of them surprisingly.

Us be.

Mark.

And I feel the innovation of the company is running start to to bear fruit. So I'm excited about when we when we talk to you about 2020 above impact of new product sales into our into into into next year also when we talk about the regions themselves you know.

We see.

Full recovery now in Europe , Europe was a real lagger for us and is coming up to be.

Be driving well our performance and great performance in Asia Pacific as well.

Led by China, and I want to close by just saying the fundamentals of our PD business and is one of the business. When it first started a here that we really were a big concern about because we we had issues.

With contracts than we had issues with the ability to supply product in seemed products seem to be Asian growth on a global basis be so high in the US nearly 10% gives me tremendous confidence then when we hear back on the rule on aka shy.

Puts me quite Eightys.

In how we are doing in the marketplace. The shared that we are.

We are expanding in our ability to really compete so.

This is this is a different baxter.

Thanks, Joe just to two quick follow ups. One is just I know, it's challenging to talk about forward guidance just given the dynamics that are going on but can you talk at all about you've had building accelerating momentum in the business and 2019, how you're thinking about that momentum into 2020, and then for Jay margins always tick down in the fourth quarter can you just bridges to fourth quarter any onetime.

Benefits in the third the headwinds into the fourth.

And how March analogous tracking relative to plan any comments you can make on pension, which was sort of inter quarter announcement that we haven't yet got clarity on thanks, so much so David.

Our ability to grow our business.

In the in that in the future.

Why is that.

Baxter.

Large tenders outside the us in we see we see steady.

Positioning of our products through contracts that gives me comfort.

Relax the Mig gives me comfort that we were hitting the right places the innovation coming through.

Our new pump platform coming on next year, usually tremendous optimism in terms, how we're going to be able to face.

New opportunities in the US we also launching.

No we launched the three chamber bag in Europe for nutrition, there has been very well outposts Maria recovery in attrition, which was very low in the beginning we starting to see some momentum. So I don't have any reasons to date discounted debt.

Concern about the ability of Baxter to grow its top line.

Great David in relation to your question on margin versus expectation in sequential.

Internal expectations now as we move from Q3. The Q4, you'll note that the margin does deteriorate, which as you pointed out is largely attributable to normal seasonality in the case of this fourth quarter gross margin will come down in large part or shutdowns occur in Q4 and that has a period.

Spends impact in the fourth quarter, but then secondly, R&D in the third quarter I believe was a little bit below 5% of sales. We will expect it to go a little bit above 5% of sales in the fourth quarter related to the timing of certain milestone payments attributable to advancing the pipeline. So that's that's really the story on the.

Overall margin evolution.

The overall goal of the pension approach is to really reduce volatility I'm as part of the transaction that we engaged in we have reduced the liability by approximately $2.4 billion that has very substantial long term benefits to us on in terms of mass.

Managing the predictability of future financial results, but as it relates to commenting on the 2020 impact in particular, because this is in other income line item I'll refrain from talking about whether this is a benefit or headwind or tailwind I'll start my comments, there and stick to the fact that this is more about.

Which is why we pursued this transaction.

Thanks for the question risks.

So much.

Thank you.

Robbie Marcus from JP Morgan is on line. Please state your question.

Got any comments you could add to maybe where you're seeing pluses or minuses versus your internal plan or or any delta as we should be expecting after third quarter results here.

Sure Ravi just just for as a matter of clarification.

The reason that we have not provided sales growth by segment or by region is that as part of any correction to previously issued financial statements. After we complete this investigation, we do expect to correct certain items that were that are immaterial to our previously reported results of API.

Operations, which include the impact of translating our foreign operations back to US dollars in the exchange rate use like I said. This is an immaterial impact but you can you can imagine how sensitive we are to any minor changes in growth rates that may emerge as a result of comparisons.

And this kind of situation. So I think I think Joe So thats why for your information we haven't shared anything in relation to growth by segment by region, but I think Joe said it well look we had we had strength across the portfolio our real care business continues with great momentum Medicaid.

The launch of mix, Redland, which becomes an important driver for our long term growth. So I would say generally speaking we sit here very pleased with the business momentum across the board.

Our Alco I Echo Jay and I guess.

I just want to point to do really it's really the acceleration of PD business no debt the depletion growth has been.

Yes.

And not surprising because the therapy is a desirable therapy for the home, but this is one of the leverage that we have and the other lever that we have itself. So the momentum in our us.

The fruits of our change in in sales forces structure and organization.

Great and then no.

So at this point robbing we can't comment on any we're limiting our comments today to operating income we have an investigation ongoing upon the conclusion of that we'll be prepared to share further comments, but for purposes of adult our discussion here, we're not commenting on anything below operating income.

So you're looking for that might be most appropriate for Baxter here. Thanks.

Great question, we don't comment on any M&A activity that we are.

Capital allocation as we've mentioned M&A remains unchanged.

We are we always prefer a strategic deployment of capital.

Into acquisitions, we said before that adjacent spaces are more reasonably priced and easier to integrate them. We are very very open to dose.

We also.

Have not changed our our view on dividends at all.

And how known at the end of the day, we're not going to be affording cash so if we.

Find ourselves with excess cash in our balance sheet, we make a decision to appropriately.

Buy shares back so I just want to say to you enter the folks on the call no change has been.

That's a great somebody the only thing to add as year end Ravi of course, we have very ample liquidity with significant cash on hand to fund business development or any other activities. We are interested in pursuing.

Thanks, a lot.

Thank you.

First question I, just wanted to clarify something in your 8-K and make sure I'm reading it correctly because it to the FX gains for 14 to 18 at least those out should we view those is representing the magnitude of the misstatement or could those misstatements b. I guess in the end larger or smaller.

The misstatements couldn't be larger or smaller than what was reported as.

Things on any in the AK that we issued.

Just one of the other things in the account was on Claris.

Bob.

When the FDA will come in and respect the plant, we haven't not being respected yet.

We're coming towards the end of 2019, we have done everything that weve committed to do to date.

We can't predict so we'd better off just not counting on something and if you come spine. If it doesn't at least we were upfront telling your by what you need to just think about is that we are committed for a backup plan and we investing money to have most of these products on the CRL basis.

If we ever need to activates euros. So our pharmaceutical group not only is very busy right now with significant amount of new opportunity pipeline, there reformulating assemblies mix, rather link but they also.

Okay sounds like a potential for disruption is low there.

That's it from me thank you.

Oh I just I just wanted to rephrase I incorrectly use the.

Thanks, Good morning.

I was hoping you could comment on the PV dynamics in do you think you're seeing a pickup in the patient volumes because of technology because of the initiatives at the government has talked about or some combination thereof.

No.

I think.

That the therapy. The therapists benefits was always very clear, but I think I think that are.

There is an acceptance of the therapy, probably more widely today that was before but I have to say that our partners does viewed as being one of them have been working very closely with us in a very collaborative manner and and debt has created the opportunity for us to cool.

Thank you to deploy.

Our resources to trained nurses and patients I also underscore that Baxter have made significant operational changes in making products, where we make how much capacity would put in place giving confidence to our partners that we can.

Actually supply the market versus perhaps.

Back in 2013, 14, 15, when we had some constraints and allocation of resources. So weve now the clinics and their doctors and our partners feel more confident in depth plays a role, but all I also think the move into the home use becoming.

This is a good result, and we'll be working very hard to make sure that we continue on with this partnerships.

Thanks, Joe and then just to follow up on that Delta. The U.S. number was very strong, but Oh U.S. was a little below what the consensus was expecting can you talk a little bit about the dynamics of us if that growth could improve and then when you think will start to see more inflection from the new launches.

So I think there was some timing on the on on the on the performance outside the us.

Also we have we have focused tremendously in making sure that we have launched our new.

Our new pump you feel like Q whats outside the U.S., we have this low launch off dep product in the UK.

Numbers more so you should feel comfortable that in the US we got this being addressed and we've got the numbers right and.

And we don't talk about comparison.

At the moment, we're not going to be talk about this quarter over quarter or year over year, but I can tell you that based on my in my expectations. My expectations. This business is doing well he is doing well and I'm very happy with the performance that we have demonstrated that one point in time was being quite quite cheap.

Alan by all their constituents, we are on track on that.

Great. Thanks, Jeff.

Thank you and our next.

Question is peto tinkering with Deutsche Bank.

Please state your question.

Good morning, guys. Thanks for taking my questions two Quickies for me what does the process for getting fair Nova approved for the Medicare transitional add on payment.

Conversation. This is a 2021 conversation okay, because it's going to take US time by this time, we get to the product approved and get this.

The reimbursement.

Okay, and then from a manufacturing capacity of the Dialyzers. It sounds like there's some capacity constraints. This quarter you talk about what investments you're making in those facilities. How fast you think those facilities can get ramped up.

Two lines within our plant in.

Alabama, Delaware there were no operational within not enabled them to start operating because the capacity versus demand was balanced as we start getting more successful in the dialyzer business and start selling more product. We activate those lines those are complex lines than we had issues and.

Enabling.

Great. Thank you so much.

Okay.

On line. Please state your question.

Maybe talk a moment about the strategy for the medication delivery business. Obviously, you did the cheetah medical deal, which which is interesting but.

As we get past this year.

Well.

No I had a great discussion with the ahead of that business David Ferguson, the other day in and for US the vision of that business is preventable harm.

How do we create a system to integrate bumps in fluids that you continue to treat the most critical patients in the way that they can recover and exit the critically stage faster either in aseptic stage or any acute or this stage. So we well.

We find that.

Therapy RCR to therapy, because that plays a role also not only feeding by also helping diagnosed in determining when we start because depletion when it gets to the point that you check in the hemodynamic balance you check and quality of debt off that treatment is also a patient that sometimes.

Yes.

Acute kidney injury in is incapable off of two weeks the kittens not operating anymore. So all of this together how do we create a business for critical care patients dead prefunds harm any boost the ability of debt patient.

Great.

Net the safety net that can bring to patient to look better.

Better outcome faster.

That is fair demonstrate remember we have a very large and stable business within medication delivery, which are fluids in for data. We're working very hard to have worked very hard to stabilize good contracts in place get the supply chain in place. So this was phase one because without that isn't nineish target.

The whole restructure of the sales force.

Moving through the in investigation here.

The matter incredibly seriously the management team audit Committee of the board. There is an ongoing investigation and we intend to move through it expeditiously.

As far as capital deployment.

On the M&A side, our principles have not changed and we have ample cash to deploy.

And so that's that's what I would say in terms of in terms of our current deployment of capital that would be the priority focus.

Okay. Thank you.

Danielle Antalffy, let's SVB Leerink is on the line. Please state your question.

Hey, good morning, guys. Thanks for taking the question Jay Gentleman, Jack I know, you're not going to provide 2020 guidance I'm not asking you to but just for at a high level as I look out or 2020. It feels like you have a lot of tailwinds in place new product launches that you had here in 2019 across most of the businesses.

And you know and and I know some of the headwinds I. Appreciate some of those back half met delivery comps will get tougher you also had in the acute surgery business that supply disruption from I can that competitor just at a high level can you help frame for us the tailwinds and headwinds from a top line perspective, as we head into.

So 2020, especially as you're exiting the year here at what seems like it would be a 5% organic growth rate.

Thanks for the question Daniel I think over overall, what I will say is we're pleased with the momentum and the progress that we're seeing as I said earlier really across the portfolio on the third quarter from sales perspective hit on a lot of different cylinders and Furthermore, as we looked at the performance of the pipeline innovation and new product that those were all.

As far as 2020 goes as we always do this time of year, we really do hold off on specific guidance for 2020 and specific headwinds and Tailwinds and the reason is we're literally in the process of completing our annual operating plan in the coming weeks and months will review with our board of directors on them.

Them through it as we prepare for the new year on at which point, what's your guidance and then as we think about this year in particular, there are a number of different items that are that are that could have interesting impact on our financials things like the America advancing American kidney Health initiative, which is a is an important potential driver for us we.

Also have to ensure that we have the right capital investments and operational investments in our manufacturing and quality systems. That's another critical area. We are spending a lot of time assessing that and then finally one of the key areas to our long term success relates to agreements with Gpos.

I'd and other major customers and so that's another area that we are working our US teams are working very hard on that and so until we have full line of sight to the completed operating plan along with some further information on these numerous critical drivers, it's a little too early to get into on specifics on 2020.

No. That's that's helpful. In just one quick follow up as it relates to capital deployment, we touched on your ability to do M&A Wow. A this investigation is ongoing what about your ability to continue to buy back shares can you do that before you file the 10-Q or you limited in what you.

And do there.

Yes, we don't we sold so generally speaking we don't comment on share repurchases for a lot of different reasons well. We typically do is after having repurchased shares we make comments on how many shares we repurchased and there are a number of different reasons for that.

I think represent good practice.

And so as it relates to going forward you know stay tuned we'll talk about share repurchases on an upcoming call.

Thank you so much.

Thank you Daniel.

BJ Kumar with Evercore ISI, it's on the line. Please state your question.

Hey, guys.

Thanks for taking my question.

Hello.

Yes, Hey, Hey, sorry about that I can you hear me now we can we're going to.

On.

The 5% operational for acute Q4.

And it looks like sequentially, what change, but what changes I guess in the model because you do have a tougher comp Q4.

Yes, I mean, as we as we always anticipated there was an acceleration in Q4 in medication delivery on that represents an important driver the team's hard at work in terms of identifying new customers doing a tremendous job on the pump side and also the large volume solution side, so that may.

Medication delivery does represent an important component as we look to close out the year successfully and then we'll also see some improvement sequentially in nutrition again, thats, an important business for us.

Team has been hard at work recapturing some of the loss business in the U.S., but along with also successfully launching products. So those would be a two to a couple of things that I would point out I don't know Joe if you would adding on to I would say VJ that compounding has has had an effect on the sequential basis, we had would be very successful comp.

But compelling as a business that varies a lot based on what kind of drugs going into bio similars mineral compounding business outside the west So biostim as a very successful side the west so defensive when they go on on Biosimilars, we have not a reduction in profit, but we have a reduction in in the in them in sales just.

Because the purchase price the other one was anniversary index met remember this is a 80 plus million dollar business that were anniversary right now mixed Revlimid has just started to pick up momentum.

We are we're picking up percentto to see sales go up on that insulin right to use insulin products, but by the mix revenue I'm sure, but the ducks mad anniversaries and that so there are some puts and takes in their full quarter, but he is not no I don't see anything terribly different there would alter the.

Thanks, Joe and Jay just on the 2020 commentary that you made on on.

I think if I heard you correctly, you were talking with Capex investments so.

I just want to put that into context, just given not mean, a free cash has been growing healthily.

Are we looking at a step up in Capex is what's that was that the genesis of the common done now and then just on the topic of free cash when you look at deploying the free cash.

Between now and the until the investigation that gets resolved I can you buy back stock right I guess is and I apologize. If this has been asked what up with that I'll stop.

Hello, So, yes, sorry, sorry VJ.

Initiative is an important long term growth driver for us we have not reflected on that particular initiative in our long term plan, but also in terms of our short term capital plans, so that would be above and beyond our prior expectations in terms of Capex investment.

As it relates to manage manufacturing quality one of the things we are intensely focused on ensuring.

The demand high quality manufacturing and that we have the right investments in quality and that comes in two forms.

Certainly and also some capex. So thats another feature that we're looking at as we think about our 2020 planning.

So those are those are a couple of highlights and I just chosen a few things to highlight as you think about our on 2020, and which is why really we don't want to get into more detail on what our expectations are at this stage.

Thanks.

What I am NJ was that was there is there can you Oh you allow to buy back I guess I wasn't asking on.

Sorry, so VJ told a totally understood but in conjunction with my comment regarding we don't comment on share buyback. Furthermore, we don't comment on our ability to buy back shares on that should the and we've done that's how we do it DJ This has been a policy must be here.

No matter that's helpful. Joe. Thank you guys BJ thanks for the questions.

Thank you.

Larry Biegelsen with Wells Fargo. It's on the line. Please state your question.

Good morning, Thanks for taking the questions I want to Reno, one on nutrition.

Just a joe on the renal care initiative what are the next steps there when do you think you'll be in a position to.

Tell us more about the impact not just from a capital standpoint, but you know in terms of how the impact on your PD business.

Larry we all the common sorry hours and a bunch of well over 100 comments that went into this system.

I think the government regional.

Prediction was in November we would hear from the HHS you can be January .

We hope as soon as possible. So as soon as we hear from that we earned during the prepared in several different scenarios in terms of growth rates and investments, that's where we announced $500 million investment, but there's some stuff that we can doing them in the meantime to increase capacity, but we're going to have to invest money. So we are looking we have all this in their planned ready.

To go we're just waiting to hear what is going to be the rule itself uses a mandatory or voluntary.

Your question the point of care point of care, we are continuing with the clinical trial have more patients enrolled and Thats a great thing for us to understand how to mix.

That's very helpful. Just quickly for me on nutrition, what's the outlook. There you talked about new products in the U.S. and you're up to new products up but you talked about a three chamber bag I think outside the U.S. do you need that in the U.S. to accelerate your growth. Thanks for taking the questions.

That will have multi channel versus.

Opportunities other parts of the World and we we're also developing and fuel really really good about a new multichannel technologies that are folks in Belgium, our locally in developing so.

We will continue to compete well as you know we're market leaders in the west in Parenteral nutrition, and we will continue to two from our position by launching either multichannel bags, either with with was fish oil olive oil whatever we think is the best combination for the patients here.

Thank you for taking the questions.

Thank you are.

We had time to one more question Kathryn.

Okay. We have one from Matt Miksic with credit Suisse. Your line is open.

A lot of the topics but.

I've been hopping back and forth begin to call. So apologize if this was answered but oddly topic is FX, but not the investigation just just.

Quantify maybe the.

Back to what looked like worse FX.

On some of your businesses if they showed up more in one place than another during the corner just in terms of dollar terms I know a that's all netted out organic growth, but any color you could provide just because it's been delivering it stepped up.

It stepped up during the quarter at least relative to our estimates.

Matt I think you can appreciate our sensitivity with respect to discussions of FX on a business aligned for regional basis on today, So I'll refrain from answering that question.

Perhaps at a future day, we can get into more detail.

By line by business and so on.

Ken I think we can wrap the call now.

Ladies and gentlemen, this concludes today's conference call with baskets with Baxter International. Thank you for participating and have a nice day.

Q3 2019 Earnings Call

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