Hurricane Helene Updates

2024-10-3

Baxter's North Cove manufacturing site was significantly impacted by the rain and storm surge from Hurricane Helene, which was unprecedented in Western North Carolina and resulted in water permeating the facility. Supporting our employees in the impacted communities, bringing the North Cove facility back online and helping to ensure ongoing supply to patients are our top priorities.

Site Status: We are encouraged by the progress made since the storm and humbled by the work of the dedicated team on the ground. We know that many are eager for a specific date for when North Cove operations will resume. While we look forward to returning to full operations in the future, there are many components to the recovery process given the nature of sterile drug manufacturing. We are working with the greatest urgency, but we do not yet have a timeline for when operations will be back up and running. As our CEO, Joe Almeida, indicated in our press release, we will spare no resource - human or financial - to restart operations and help ensure patients and providers have the products they need. We are committed to North Cove and thank our employees, customers, suppliers and other partners for their patience and support during this incredibly difficult situation. We are also grateful for the ongoing help and collaboration of local, state and federal officials in our recovery efforts.

We're tracking our progress and providing periodic updates in the following areas:

Employees: Like many in the community, our employees have experienced devastating personal impact from the storm. Please keep them in your thoughts. While we are grateful to have established contact with the vast majority of our more than 2,500 colleagues, we are actively working to confirm the well-being of the remaining employees. Cell phone access continues to be an issue in the area, which is challenging these efforts. We have established an employee assistance center a few miles from our plant where we are offering employees access to generators, laundry machines, showers and basic supplies, including food, water and toiletries. We are also offering onsite counseling and financial assistance options, including Baxter's Employee Disaster Relief Fund to help with personal property damage and emergency expenses.

Facilities and Infrastructure: While we continue to assess the full extent of the damage to the site, remediation efforts have begun in parallel. We have best-in-class remediation firms already on site with ~500 hundred workers in action. We expect this number to double in the week ahead. As shared in our press release, bridges to our site were damaged in the storm. One access point requires re-establishing the County-maintained bridge. This will allow us to both transport remediation equipment to the site and get some finished goods that were stored in trailers and not impacted by the storm to our customers and patients. Our team has worked diligently to establish a temporary bridge to support limited transfers and, with tremendous support from state and local officials, ASPR and FEMA, we expect a permanent bridge will be installed by the Army Corps of Engineers and North Carolina Department of Transportation in the coming weeks.

Supply Continuity: We have implemented allocations to help ensure we are appropriately managing our inventory and minimizing disruption to patient care. That means that after review and consideration of available inventory and the medical necessity of the impacted products, a specific limit on what a customer can order has been implemented. This allocation helps limit stockpiling and increases the likelihood of equitable access to available products. The current allocation includes saline, dextrose and PD solution products manufactured in all sizes. Working with FDA, we will also leverage Baxter's global manufacturing network to help mitigate potential supply impact as we continue efforts to restore North Cove's manufacturing operations. Additional information on product availability is being communicated directly to our customers, distributors and the Group Purchasing Organizations (GPOs). While healthcare practitioners should use their professional judgment in assessing the needs and resources of their individual organizations and patients, our Medical Affairs team is also offering support and resources to assist in product management and conservation actions.

We are appreciative of and grateful for the ongoing support and patience of our customers and partners as we work diligently to fulfill our Mission to Save and Sustain Lives for our employees, patients and communities.