Baxter acquires minority stake in infusion pump maker.

Baxter International Inc. paid $100 million for a 40 percent stake in and a distribution agreement with privately held infusion pump maker Sigma International General Medical Apparatus LLC, based in Medina, N.Y.

Baxter has experienced longstanding problems with its line of medical infusion pumps. Most recently in early March, the U.S. Food and Drug Administration issued a Class I recall--the agency's most serious recall level--for the company's Colleague infusion pump. The Deerfield, Ill.-based firm hasn't sold Colleague infusion pumps in the United States in more than four years. The device has been plagued with battery failures, problems with false alarms, alarm failures and inadequate infusion. Some pumps, however, remain in service with hospitals and clinics. Baxter continues to monitor the existing inventory.

As part of the deal, Baxter also may make payments of up to $130 million for "milestone" achievements Sigma reaches in R&D or regulatory matters, as well as acquiring the outstanding 60 percent stake in Sigma.

The agreement will allow Baxter to provide Sigma's Spectrum brand of large-volume infusion pumps. Baxter also will have a stake in Sigma's product development pipeline. According to Baxter officials, the deal will complement the company's current infusion systems portfolio and next-generation technologies.

"Baxter is pleased to team with Sigma to expand our portfolio of infusion pumps, including the U.S.-cleared Spectrum, which is equipped with advanced safety and clinician-friendly features," said Kevin McCulloch, general manager of Global Infusion Systems, part of Baxter's Medication Delivery business. "This agreement enables us to immediately support our U.S. customers and will reinforce our position as a leading global provider of infusion systems products."

The Spectrum pump was launched in the United States in August 2005 and is developed and manufactured by Sigma. According to the company, there are more than 35,000 Spectrum pumps currently in use domestically. As the distribution agreement covers international markets, Baxter may seek approval for the Spectrum pump in additional geographies.

Roger Hungerford, founder and CEO of Sigma, said the deal with Baxter would allow the company to "focus further on our research and development work, the very core of Sigma."