Baxter International Inc. (BAX) Earnings Call Transcript & Summary

Great. Good morning, and welcome to our next session here at the UBS Virtual Healthcare Conference. In the med tech track, we have management from Baxter International. I'm really pleased to be joined by Jay Saccaro, the CFO of the company; and also Clare Trachtman, VP of Investor Relations. And today, we'll go over a number of topics on the different businesses and COVID. Just one word of orientation for the session. If you have any questions, you can always e-mail me or send your questions in through the webcast. There'll be about a 40-minute Q&A. So to start, I just want to thank Jay and Clare for joining us.

And Jay, maybe I'll kick it off to you with kind of a higher-level question. Talking about some of the shifting sands that we're seeing here. Baxter has actually seen a lot of its businesses have increased demand because of the requirements for managing COVID patients, whether it be with the fluids or dialysis products, et cetera. So I was hoping you could give us just kind of a broader overview of what you're seeing, and what you've had to do to really jump-start the organization and try to meet some of that demand as things have been moving so quickly.

Yes, Matt, thank you very much. Thanks for the invitation to the conference. Of course, we appreciate it and perhaps hope to join you in person next year. Yes, it's been a very interesting time, obviously, for our health care system, but also for our company because it sits so centrally in terms of supporting health care systems around the world. What I will tell you is from our hurricane experience a couple of years ago, we were able to respond very quickly in terms of mobilizing our supply chain to address a lot of the incremental demand we've seen in the first quarter and some here into the second quarter, things like air bridges, things like increasing the number of shifts, ramping up hiring, as we've discussed. So the rapid response that the company put in place, I think, is emblematic of our commitment. Now you're right, as we look at the first quarter, there were a number of areas where we saw very strong demand. There were a few areas that had normal levels of demand. And then, while we didn't see declines in certain businesses in the first quarter, of significance, we do expect that to occur throughout the remaining part of the year or at least, in the second and third quarters. And so just a word on that. Our acute business is one that really has been in the spotlight. Patients who have COVID, 15% to 30% of them that go to the ICU have acute kidney injury. This is a very severe condition, and one that is designed to be addressed by our continuous renal replacement therapy. So we've seen incredible demand for this. And we've been working around the clock to get the right level of supply to those markets that require it. In addition to that, our medication delivery business has seen some benefit in the first quarter as well related to incremental fluid demands and perhaps some advanced purchases. In addition, we've seen some purchases of pumps, as hospitals have looked to really prepare for a potential crush of patients. So we saw a very strong performance in our medication delivery business, likewise, our pharma business, things like dexmedetomidine, which is used for patients -- with patients who are on respirators, that's one of the drugs that may be used for those patients. We've seen some good demand there. So we have a whole class of businesses that are benefiting in the short term, I would say. We have businesses that are neutral in the short term. That's our renal business. And patients who are on -- have end-stage renal disease, really, they stay on this therapy, and it's something that in the short term, we haven't seen any real changes to this dynamic. Although in Asia, we did see some advanced buys, but generally speaking, this is a steady performer for us. And then the less class of business, I would say, are the advanced surgery and inhaled anesthesia business. These are more related to discretionary procedures in hospitals, and I do expect that these will see a significant impact in the second quarter. And then we'll see how this returns to normalcy in the third or -- and fourth quarter. So those are the -- that's a bit of an overview in terms of the different businesses that we have that are impacted by COVID.

That's great. Yes. I want to get into some of those a little bit later. For now, maybe I'll just ask more of a higher-level question, which is on the first quarter call, you didn't provide guidance for the year. You chose to pull that versus putting out maybe a wider range or something else. But just trying to understand, what are the key things that you're tracking to try and forecast and plan for investment in the business for the remainder of the year? At what point do you think you might be able to give some more directional guidance?

It's a great question. And obviously, we don't -- we didn't take that decision lightly. I've been the CFO, I think, for 5 years, involved in financial planning before that. And we always gave guidance. And we did so because our business is a steady, durable business, one which we believe we can reliably predict. We think that's part of the value of the portfolio that we have. And so giving guidance is kind of part and parcel to our overall approach and philosophy. So you can imagine, there's a lot of debate and discussion. And what it came down to is just the dispersion of potential outcomes was so wide that it became impossible to give a range that was useful for investors. And so for that reason, we suspended guidance. Now what we're doing is we have done a lot of work in terms of analyzing different scenarios, but really, that work is principally about 2 things. One is ensuring that under every scenario that we can imagine, the company has adequate liquidity on hand to avoid any disruption. And second, to understand how our supply chain can best support our patients amidst a whole host of different scenarios, many of which will likely not materialize. In all likelihood, hopefully, our base case moves forward, and it's kind of business as usual towards the end of the year. But frankly, there are outcomes that could be far worse than that. We could see a wave 2. We could see a major macroeconomic recession that's sustained as a result of this impact in hospitals and Ministry of Healths around the world. So for these reasons, there's a wide range of outcomes. And at this point, there's no -- we don't really have confidence that any one outcome is much more likely than any other. And so when do I think we'll have line of sight? Perhaps later on in the year when we have an understanding of how wave 1 concludes in the U.S. and whether or not there is a wave 2 that's emerging. I think, at that point, we will have better confidence in future projections. But at this stage, Matt, it really is hard to say. We've also embarked on the first time, our forecasting is principally done bottoms-up and then with some regression analysis, which works well for our business because oftentimes, there are real trends that you can see over time. But in this case, we've started to enhance our forecasting methodology. We're actually trying to build in some simulation -- Monte Carlo simulation, along with some artificial intelligence assessments. We get a better handle on the range of outcomes. And like I said, I think at this point, it's kind of premature to get the guidance. I'm hopeful that perhaps in the fall, we can, but we'll do it as soon as we can.

Got it. That's really helpful feedback there. So going back to the dynamics here. I guess I was wondering if you could just comment on any recent trends and talk about the things that you're seeing in hospitals as some of the states start to open up, some of the countries around the world start to open up. Are the trends similar to what you saw in Q1? What can you say is the same and what's different?

It's hard to say at this stage. What I would say is, we've started to see China return to normal but our business in China is not a great proxy for the rest of the world. Our business in China is primarily a renal business, and we have very little business related to discretionary procedures in China. So it's a little difficult for us to say. But what I can say is China has kind of moved along according to our expectations, which implied some level of recovery in Q2. In the United States, it is simply too early to tell. We had anticipated that the second quarter would be the worst of the year for our BioSurgery business -- our Advance Surgery business , I should say, and that April and May would be really significant declines, and June might see some less of a decline or stabilization, but I don't have yet line of sight to say that, that is good and that the second quarter will be the worst of the year. It all depends on how states progress with their reopenings and what happens to infection rates in the coming months and we simply don't have enough data at this point to reliably predict or estimate what's going to happen.

Got you. Got you. Okay. Well, let me go back to some of the businesses where you saw increased demand. I want to ask about each of them separately and talk a little bit about how much of that demand is going to be ongoing, and also some of the underlying trends that are evolving, partially as a result of COVID. So with that preamble, let's talk first about the renal care business. That's a big business for you. You're a leader in peritoneal dialysis, which is delivered at home. We've definitely seen a lot of patients that have COVID, suffering kidney injury or acceleration of the disease. And clearly, with the risk of going into facilities, this could be another motivator for people to seek care at home. So I guess, I was wondering how you think this will play out in terms of whether they'll be, a, a bolus of patients moving into end-stage renal care? And b, if this further pushes people into the home and would actually increase demand for your therapy?

Yes. It's a great comment, Matt. What I will say is that longer term, I believe there will be a significant trend to the home for end-stage renal disease patients. I believe that because first, you're thinking -- you're talking about a very vulnerable patient group today. These are patients with a serious and life-threatening disease and it's something that it is absolutely crucial that they stay safe in whatever environment they're in. And now what we're seeing is simple exposure to other people increases risk. And so I think as these patients have a choice to make and clinicians have a choice to make, do I treat this patient in the home or do I treat this patient in a clinic? They're going to seriously think twice about sending patients to clinics. And so I do believe that there will be a long-term macro trend moving patients to the home. Now as it relates to the short term, and is there a bolus, you're right because patients who have acute kidney injury oftentimes end up on some sort of chronic dialysis treatment. So there is -- and there is a shift from one to the other, but we haven't seen large numbers of that at this stage. And like I say, I think that from our perspective, the bigger and more important macro trend will relate to this desire to stay safe and isolated when you're conducting critical therapy. This is the same thing with telemedicine. I do believe that telemedicine will play a much larger role in the future as people look to avoid places like doctors' offices, which carry a fair amount of risks associated with them. And so I think with renal and the fact, by the way, that we have the Sharesource platform, which really serves like a telemedicine element for end-stage renal disease patients. I believe that situates us very nicely to support patients' desires in the future.

And just a follow-up on this. I was wondering, you mentioned the desire to stay home, which I think we all understand. It's obvious. Have you seen existing patients switching to the home yet? Or do you think that's more going to come with new patients choosing that over in-center therapy?

I think it's more about new patients. I think if a patient is on a particular modality or therapy, I think they're going to choose -- it's very difficult to switch because doctors will not want to change patients that are stable on a particular therapy. So maybe once the dust settles on all of this, there will be some people that choose to switch. But I think for the time being and in the meantime, it's more about new patients that will be confronted with this decision.

Right, right. And obviously, there are other home modalities. There's home hemo. You once had a program in that space that you shut down. Maybe talk about why you think you have sort of the right to win there in terms of the home modalities, and compare the value proposition of PD versus home?

We think -- look, we think there's room for multiple therapies to win in the home. I don't -- I think we've got a great one in peritoneal dialysis. I think it's a cost-effective therapy. I think it's supported by good data, which indicates excellent outcomes relative to alternatives. I think it's -- again, I think we've got the right technology with our Sharesource platform. I think the therapy is simple and easy to administer in the home. And so for those reasons, a few years ago, we had a program for home hemodialysis. We concluded that the program could not meet the target cost profile. We could not generate the adoption rates because, frankly, there are some concerns for patients. It's one thing to inject fluid into the body. It's quite another to remove blood, filter it and put it back in the body in a home setting without supervision. And so for us, we always struggled with that barrier to adoption, along with the cost profile relative to reimbursement levels. And for those reasons, we selected our PD is the right therapy to bet on. And by the way, it's gone incredibly well. I'm not saying that there won't be home HD offerings but, like I say, I think there's room for multiple players. Because as I look at it, with the desire for patients to move to the home, it should substantially expand this market.

And maybe you could also update us on some of the other renal catalysts here. Do you have any insight on what could happen with the U.S. Advancing American Kidney Health Initiative? And could you also touch on THERANOVA and on-demand PD?

Sure. With respect to AAKHI, I think the administration is still very interested in advancing AAKHI. We've had very good discussions with various governmental individuals and agencies. And so there's a real desire. And frankly, in light of COVID, I think that desire may even be increased. But getting things done today is really challenging in the government, given all of the focus, energy and effort on containing and managing the coronavirus situation. And so I think we expect something to occur here. But even in the absence of it, we've seen very good patient growth in the U.S. that will continue to grow. But like I said, we do expect something to occur at some point in 2020, but we're waiting cautiously on this one. As it relates to THERANOVA, we have previously expected that in the second half of this year, we'll get approval and reimbursement shortly thereafter. And I think we're holding to those time lines at this stage. But we're respecting the uncertainty that exists in the government and FDA today. Look, it's a really challenging environment for anybody to get business done right now. And so we're hopeful, optimistic, and we expect. But we also respect the challenges that folks have today with regard to remote work and the ability to process, which may be hampered relative to prior expectations. So nothing specific more to point out there.

Got it. Got it. THERANOVA has been approved with CE Mark for a couple of years. Maybe could you speak to how it's doing in some of those countries, and why the U.S. launch will be different potentially.

Sure. Maybe, Clare, you could comment on that?

Sure. Matt, I would tell you that with respect to THERANOVA, we've launched it in several markets outside the U.S., in Europe and Asia Pacific. And within those markets, where we have seen acceptance, we have a very high reorder rate, meaning the clinics that have adopted THERANOVA do reorder that and actually continue to expand it. But given that this is a premium product relative to other dialyzers within those markets, it has seen somewhat limited adoption, which we always knew, and which is why we've invested $25 million and continuing to gather evidence to support the utilization of THERANOVA because we do believe that THERANOVA will deliver the best clinical outcomes for patients and will result in economic outcomes, benefits for providers and also the systems as well. So that's the reason we've really invested all this money into continuing to gather this evidence. Now why we think this will be different in the U.S. is because we are looking for a differentiated reimbursement pathway. We've applied for an add-on payment, which we should expect to hear by the end of the year as part of the ESRD proposed rule. So that's why we do believe it will be slightly different because part of the reason we think we've seen the limited adoption is because of the fact that this isn't a premium product, where in many of these markets, there's a capitated reimbursement, which is likely limiting the adoption within those markets. But the key is where patients are using it, we've had anecdotal evidence that patients really enjoy it. They're feeling much better. It's almost a night and day difference from when they were doing the conventional dialysis with a conventional dialyzer. So we know it's there. We just have to continue to build a body of evidence to support the greater utilization of the product.

Great. Okay, maybe we could transition and talk a little bit about the Med Del business. In the beginning, you've mentioned that there were some prebuying or stocking of fluids. These are obviously needed to help manage COVID patients, along with pumps, which are essential in the ICU. So my first question will be just to try and understand how much of that influx of demand that you saw, according to Beck and continue to see probably in April. How much of that do you think will be more ongoing versus onetime, is kind of the core question. Can you parse that out? Do you think hospitals and governments are going to have to think about kind of permanently carrying more stock of fluids and capacity for ICU management?

So I think that there are a few different elements in this business. There's our pumps and sets, there are our large volume bags of fluids, and then there are small volume bags, which are used for premixing drugs. I think as -- look, as I think about the opportunity, each of them has a different dynamic. We did see some incremental pump purchases in the first quarter and expect a little bit in the second quarter as hospitals want to ensure that they have the right number of pumps in place to support surging patient demand. Now is that a long term trend? It's -- we don't expect it to be. But I do think that there is going to be a broad set of questions that hospitals and governments will have to ask in the future around what level of safety stock, what level of inventory do they want of critical life-saving devices, things like pumps, things like respirators, things like CRRT machines. All of these things are crucial to the effective functioning of a health care system amidst the crisis. And so I think that there will be some questions around stockpiling of these orders, but we haven't really seen a lot of that yet, but that might be more of a latter 2020, 2021 item. As it relates to the rest of the year, frankly, I'm not expecting further stockpile orders. And as it relates to pumps, there will be some questions around the second half of the year. We have expectations internally around how many pumps we're going to sell of our new pump platform, which is an awesome innovation. But at the same time, we have to understand what kind of pressure a hospital is going to be under in the second half of the year with respect to their CapEx budgets. And so that's going to be a variable that factors into pump sales in the second half of the year that we'll have to understand. As it relates to fluids, in the first quarter, large volume bags, we did see some incremental purchasing. Some was used in the first quarter, some was pre-buying in advance of the second quarter surge. And so this will be another area. Again, a lot of this will be dependent on whether or not a wave 2 materializes. We always pencil this business in for low single-digit growth that should be fairly steady. It wasn't that in the first quarter. And frankly, we had a big Q4 as well. So we'll have to watch this as we move forward. Again, this is another area that relates to the same question. In the future, will hospitals or governments say, hey, we need some stockpile. We've had some discussions around stockpiling, but haven't really had any significant orders to date in large volume parenterals. So this will be another area. Though, as you think about strategically preparing a health care system for a crisis, clearly having ample IV bags on hand will be an important component to that. The final piece to this business is our small volume parenteral SVPs, and this one will have a structural benefit. Because if you think about it, we lost a lot of business to syringes in 2018. The benefit of a syringe is that the administration takes place bedside. And so a nurse will stand next to a patient for a number of minutes, administering the drug through the syringe. Now interestingly enough, that was great because it would -- led to higher satisfaction scores. But as we sit here today, the notion of standing bedside next to a critically ill patient is something that hospitals aren't necessarily interested in. So we've seen a perhaps a big pickup in this particular business, and it's one that could be, and I expect may be, sustainable. We'll want to see more data in terms of how this progresses over time. But conceptually, I understand how less patient contact may be better when it's unnecessary contact. So those are the 3 components of the Medication Delivery business.

Right, right. And I'm glad you referenced the pump launches that you have upcoming. I guess, I was wondering how this disruption could impact the time lines of those. Obviously, you talked about the fact that some of the hospitals may not be ready to install or train everybody on new pumps, but are the launch time lines themselves still on track?

So, so far, we haven't materially changed launch time lines. We're expecting launch in the second half of the year upon successfully working with the FDA. And so we have no signs to change that at this stage. We're really excited about this pump platform because for the first time, we will have multiple pumps, same interface, same design, stackable simple format. So it really is an advanced offering that we're bringing to the market. Now the question though becomes, what happens in the second half of the year with respect to hospital budgets, access to hospitals, and a lot of this will come down to what happens with respect to wave 2 and the depths of a recession that take place. So these are a couple of questions that we're watching carefully. I mean the good news for us is we only have a few percent as a company that is exposed to the hospital capital cycle. It just is that this is an important component for us that we're really excited about that is representative of those 2% or 3% that we have related to the hospital capital cycle. So I think we're optimistic. No change to date. But when I think about wildcards that could impact the second half of the year, this is clearly one. Are we able to get through and get FDA approval along our original time lines? Are hospitals able to open up to welcome in sales personnel and teams to train? And then how crunched are hospital capital budgets? Those are all 3 variables that could impact the pace of adoption of the new pump.

Right. Right. No, fair enough. And maybe you could just speak to one more point on that. You talked about how excited you are about the offering. Could you just remind us how this really differentiated and progresses your large volume offering? And also speak to now, you're wrapping around that, a number of these other pumps that are in the peripheral markets that you haven't been in? And what does that mean for your overall ability to pull-through business?

Great. So it's interesting because for the longest time, we've been selling a large volume pump to our hospital customers. And we sold that alone, that was it. But hospitals, when they buy a large volume pump, oftentimes, they also purchase a syringe pump and a PCA pump, patient controlled analgesia pump. So they have 3 pumps, we sell one of them. And so if you're to choose Baxter as a pump, you necessarily have to work with at least one other vendor for a syringe pump and perhaps another for a PCA, and that means that you have to train your nurses on 3 different user interfaces, 3 different mechanisms of programming volumes, it's a complicated endeavor. And so I believe for that reason alone, it's been a challenge for us. But one, because of the quality of the Spectrum pump, we've been able to surmount in many cases. And so now, we take the best of Baxter in terms of the simple user interface, the master drug library that underlies the Spectrum pump, which is one of the best in the market, incredibly safe, enforces incredibly safe administration of drugs. And we leverage that into 3 pumps on the same platform and then a fourth pump, an ambulatory pump, which comes later. And so we're really excited about now being able to say, not only are the syringe and the PCA markets totally new markets for us. So they are a blue ocean. They also will, by having 3 on the same platform, make our large volume pump more attractive as a customer offering. So I would say this is a real area of excitement for us. I think it's a symbol of all the progress that we've made on innovation. And I think it's going to be an important component for us for the coming years, and it will lead to growth for years to come. So we're really excited about this improvement. I think it -- the second half launch is, I said, on track. And then in the short term, there could be some bumpiness, who knows, with respect to adoption given pressures hospitals are under and perhaps a wave 2. But long term, we're convinced this is a tremendous opportunity for the company.

Got it, got it. Okay. And one of the other new areas that you've been talking about more, especially with your acquisition of Cheetah, is monitoring. And so I was wondering if you could speak to Baxter's current capabilities in monitoring and how that might be an area where you would look to expand?

So this is a logical area for us to participate in. Because if you think about it, in the ICU setting today, we are -- we have a nice footprint. We have the pump, which is just such a central device to everything that occurs in the ICU. And then, of course, for certain patients, we have our CRRT machines, our PrisMax device and Prismaflex, which are wonderful devices to support a certain segment in the ICU setting. But the question that we started to ask ourselves is, what else? What can we add to this because it's not simply about the administration of drugs that we're interested in. It's about supporting a patient all the way through their recovery. And so getting more information from the patient is something that is really a critical component to this aim of supporting patients all the way through their recovery. And so we acquired Cheetah, which is a wonderful device, and it's about hemodynamic monitoring. We have now our PIVA program, which is underway, and it's something that we're working through with clinical trials. The excitement there relates to we have IV set today. And in the future, what we will have is we'll gather information from that IV set. Remember, the IV set is proprietary real estate to Baxter or whomever the set belongs to. But to the extent, today, there is nothing that is special about information captured from that set. But now PIVA starts to say, okay, what is the hydration level of a patient? And can we measure it? These are a few of the innovations that we're looking at. Admittedly, these are both early days in the sense that the Cheetah business is a small one, and PIVA, we've sold none. But as I think about 10 years down the road, this idea of linking our infusion systems devices to monitoring devices, ideally adding analytics to that to enhance outcomes, this becomes an incredibly important long-term vision for us, and one where we're really excited about. But in the meantime, you have to make multiple bets to get to the right spot and so we're working through that.

Got it. Got it. Okay. And then related to that, I guess, would be M&A. And I guess, I was hoping you could talk a little bit more about your capital allocation strategy more broadly. You've got a lot of dry powder. How are you thinking about M&A? And when would you be ready to do deals? And maybe talk about how you're prioritizing that versus other options at this particular point in time.

So I think, our overall capital allocation philosophy today is caution because we have been modeling numerous different scenarios. We've been looking at lots of different ways things could evolve. And we just have to ensure that we have ample dry powder to support Baxter under all of these conditions. And so we did the rare -- so Matt, you know of all people, we never talk about our share buyback program. We don't. Because we always say you can judge our share buyback program on the quarterly call when we tell you how many shares we've purchased. But we took the very rare step and in fact, unprecedented, I think, at least, in my time, to say, we are out of the market not purchasing shares, we have suspended our program because we -- of all of the uncertainty that exists in the marketplace. And, by the way, you're talking to a company that has over $4 billion of cash on the balance sheet and a relatively durable portfolio. But for us, we just don't know how this is going to turn out, so we wanted to be very cautious with respect to deployment of capital. For that reason, we suspended the program. But on the M&A front, we will continue to do M&A to supplement, things like Cheetah, our great acquisitions for us. We've done some acquisitions in the Advanced Surgery space that are wonderful ROI deals from a pro forma standpoint. And what I will tell you is during this time, we will continue to do M&A, I expect, and -- but we will be cautious about deploying the capital. So it's more likely that we will do smaller tuck-in deals that leverage the competencies and the capabilities that we have, those are the kinds of deals that we'll do, versus larger third-leg deals, which under the environment today, it's hard to make those economics work, but it's even harder to be -- put yourself into that risk profile. And so I think M&A will continue to be an important part of what we do, but we'll be sort of very careful and cautious with high bars until we see signs of stabilization. Because frankly, while I would have told you a few -- like maybe 1.5 months ago, that there were great buys out there, that story has changed quite a bit. And I think now most folks are looking past the current situation, assuming a recovery in 2020 and then solid performance in 2021 as they put together their valuations of these companies and as these companies trade on the open market. So it's not clear to me that there are great deals out there at this point. And so in that context, we're just going to be cautious and do more of the tuck-ins that really give Baxter proprietary returns.

That makes a lot of sense. All right, last one I want to ask you about -- I know this is a personal mission for you, the cost structure. And I think I'll start by saying it may have surprised some people that you talked about the extra $150 million in expenses related to COVID. So maybe you could talk about what that's for, how much of that lingers? And then what additional opportunities are you seeing on the margin side as a result of what's happening today and what could change going forward?

Sure. On the incremental cost, we did identify $150 million of incremental costs that we highlighted in our first quarter call. And what this was about is extra pay for manufacturing workers who perhaps needed home care or extra employees that we had to hire as a result of incremental shifts to get production levels, up or because of higher levels of absenteeism. In addition, we had extra investment in PPE equipment for our employees because we have to ensure that our employees are safe. We have to minimize the risk of having outbreaks in facilities. So we had to invest, reconfigure and ensure that our employees are safe in that regard. And then finally, the last piece is we have expedited freight everywhere. We had an air bridge going from Europe to the U.S. to support incremental supplies to the U.S. of critical products, and that's highly -- that's very expensive. And so for these reasons, we did delineate this $150 million. I will tell you that the majority of this, and perhaps a significant majority of this, will subside as COVID subsides or following COVID subsiding. So I think we'll get back to the normal levels of cost, and much of this will be sort of onetime or at least temporary in nature, as opposed to a step function change in the cost structure. But we'll only back off these costs once we see that the virus has indeed subsided. So that's -- could be gone this year, could be gone next year, we'll watch and see. But interestingly, as we think about the new world, there are a lot of changes that will take place as a result of the learnings from this. Remote work. We have -- right now, our office space is probably 5% utilized globally. And I'm not saying that's the right number, but I think this has caused us to rethink our real estate footprint, and maybe 100% of what we have today is not the right number either. And so maybe there's an opportunity there. Perhaps there's an opportunity with travel, which I believe. I think also, as we think about calling on hospitals from using remote technology, I think that's a great opportunity for us. So this has caused us to rethink a lot, including digital and how we automate many of our workflows, all of these things are now coming squarely into focus. And I think we've taken the time to take a step back to ask ourselves, what are the sustainable opportunities and learnings that we can have as a result of this and clearly, there are a number of them in the cost structure.

Okay. Great. Great. Well, I think we'll probably have to end there. We've covered a lot, and so I just want to thank you for all the time and your insights. I know investors appreciate it when there's so much uncertainty going on now, and you're a busy guy. So we appreciate you spending time with us and wish you all at Baxter the best of luck as you continue to manage through this and do so much good work for the health care system.

Excellent. Thanks so much. We appreciate it and appreciate the invitation to the conference.

Great. Thanks, Jay. Thanks Clare.