Baxter CEO sees no financial impact from heparin recall

Speaking at the company's annual shareholder meeting in Chicago, Parkinson reiterated his contention that the heparin, which Baxter recalled earlier this year, was deliberately tainted by suppliers in China. He added that the contamination is an issue that has an impact on multiple companies worldwide.

Much of the global supply of heparin, which is made from pig intestines, originates from China due to the country's large supply of the animals.

The Food and Drug Administration has linked Baxter's heparin to 19 deaths and hundreds of allergic reactions. The company is also facing lawsuits from patients who took the product. In the first quarter, Baxter took a charge of $19 million related to the recall.

Baxter spokeswoman Deborah Spak said that the company has not set aside any reserves for heparin lawsuits as the company believes that any cases lack merit. She added that the company discontinued its product liability insurance effective May 1, 2007, due to market conditions at that time. The company has no plans to resume coverage, she said.

William Blair & Co. analyst Ben Andrew said that he does not believe Baxter's liability in the cases will translate into a material impact, noting that the liability is "relatively contained."

He added that the company's earnings guidance is realistic as Baxter has tended to give conservative estimates.

Andrew has an "Outperform" rating on shares.

Also at the meeting, shareholders re-elected five members of the board of directors including Parkinson, and approved PricewaterhouseCoopers as the company's accounting firm.

Shares of Baxter fell 39 cents to close at $62.72.