Baxter International Inc. (BAX Quick QuoteBAX - Free Report) recently announced a long-term strategic partnership with Digital Diagnostics to advance diabetic retinopathy detection. The tie-up is aimed at helping front-line care providers deliver better quality of care and improve care outcomes.

It is worth mentioning that Baxter’s latest tie-up with the pioneering autonomous artificial intelligence (“AI”) diagnostics company includes plans to offer Digital Diagnostics’ IDx-DR autonomous AI software as a diagnostic service combined with the Welch Allyn RetinaVue 700 Imager (currently available for use in the United States). Notably, the agreement between Baxter and Digital Diagnostics is exclusive in the United States and non-exclusive outside.

The Welch Allyn product family became a part of Baxter's global medical technology portfolio following the latter’s acquisition of Hill-Rom in late 2021. The FDA clearance of IDx-DR with the RetinaVue 700 Imager is expected by early 2023.

The latest partnership is expected to significantly solidify Baxter’s global foothold in the connected care diagnostics portfolio.

Rationale Behind the Collaboration

Per current estimates (as mentioned in the press release), only around 15% of the diabetic patient pool receive the recommended annual diabetic eye exam. Also, access to effective diagnostic services is a hindrance, particularly in rural or underserved areas. This, in turn, leaves many with undiagnosed and untreated levels of disease, and a higher risk of consequent visual loss and blindness, as is recognized by the HEDIS/MIPS requirements for the diabetic eye exam. Hence, Digital Diagnostics created the autonomous AI diagnostic system — IDx-DR — for the detection of diabetic retinopathy (including diabetic macular edema) at the point of care.

Per Baxter’s management, the integration of AI within its devices is expected to provide a clear view of patient status to the primary care givers, thereby detecting information critical for treatment plans. The company believes that the partnership with Digital Diagnostics is integral in expanding its connected care diagnostics portfolio.

Digital Diagnostics’ management believes that the partnership with Baxter has the potential to significantly increase the number of patients benefiting from point-of-care diagnosis.

Industry Prospects

Per a report by Market Data Forecast, the global diabetic retinopathy market was valued at $7.45 billion in 2021 and is anticipated to reach $10.4 billion by 2026 at a CAGR of 6.9%. Factors like growing incidence of diabetes, increasing technological advancements in diabetic retinopathy surgical instruments and availability of favorable reimbursement for ophthalmologic surgeries are likely to drive the market.

Given the market potential, the latest collaboration is expected to significantly boost Baxter’s business worldwide.

Recent Developments

This month, Baxter announced new data indicating that the use of its Sharesource remote patient management platform with an automated peritoneal dialysis cycler may improve the clinical effectiveness of home kidney patients’ care by extending their time on therapy by 3.4 months.

Last month, Baxter received authorization from the Common Vulnerability and Exposures (“CVE”) program to be a CVE Numbering Authority. As a CVE Numbering Authority, Baxter is responsible for the assignment of CVE identifiers to cyber vulnerabilities for its own as well as Hill-Rom’s commercially available products, and for publicly disclosing information about the vulnerabilities in the associated CVE Record.

Also in February, Baxter announced its fourth-quarter 2021 financial results, wherein it registered a robust uptick in worldwide sales. The company also recorded solid performances across its three geographic segments, along with strong growth among its legacy businesses led by BioPharma Solutions.

Price Performance

Shares of the company have lost 2.3% in the past year compared with the industry’s 20% fall. The S&P 500 has risen 6.1% in the same time frame.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Currently, Baxter carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space include Henry Schein, Inc. (HSIC Quick QuoteHSIC - Free Report) , Allscripts Healthcare Solutions, Inc. (MDRX Quick QuoteMDRX - Free Report) and AMN Healthcare Services, Inc. (AMN Quick QuoteAMN - Free Report) .

Henry Schein, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average beat being 25.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Henry Schein has gained 23.4% compared with the industry’s 1.6% growth over the past year.

Allscripts has an estimated long-term growth rate of 16.3%. MDRX’s earnings surpassed estimates in the trailing four quarters, the average beat being 64.8%. It currently flaunts a Zacks Rank #1.

Allscripts has gained 33.3% against the industry’s 54.3% fall over the past year.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average beat being 20%. It currently sports a Zacks Rank #1.

AMN Healthcare has gained 22.1% against the industry’s 61.3% fall over the past year.