News Release

BAXTER ANNOUNCES PLANS FOR NEW FACILITY FOR PRODUCTION OF RECOMBINANT AND CELL-CULTURE DERIVED VACCINES

Production Expansion Sets the Stage for Significant Growth in Vaccines Business

Baxter Expects to Achieve 2001 Earnings Growth in Mid-Teens, Sales Growth in Low Double Digits


DEERFIELD, Ill., March 7, 2001 - Baxter International Inc. (NYSE:BAX) announced plans today to grow its vaccines business with the addition of a new, US$170 million state-of-the-art facility for production of several recombinant and cell-culture derived vaccines.

"The vaccines market represents a significant growth opportunity for Baxter," said Thomas Glanzmann, corporate vice president and president of Baxter's BioScience business . "This $7 billion worldwide market is expected to grow 13 percent a year over the next five years. We believe our experience with recombinant therapies, together with the investments we have made in acquisitions and production expansion, position us extremely well to capitalize on this growth."

The company is evaluating several options outside the United States for location of the facility, and is expecting to finalize its plans later this year. Baxter anticipates starting construction of the vaccines facility in the 4th quarter of 2001, and is projecting to start commercial production in 2005. The proposed 65,000-square-foot (6,000-square-meter) facility is expected to employ approximately 250 people when it goes into commercial production, with more than 75 percent of those positions scientific or technical in nature.

When it is completed, Baxter's new vaccines facility is expected to be the only facility capable of producing both recombinant and cell-culture derived vaccines, as well as the largest facility capable of producing vaccines in a serum- and protein-free environment. The vaccines will be produced using Baxter's propriety production process, which excludes any added proteins or raw materials derived from human or animal sources in the manufacture, purification and formulation of the final product.

The facility will feature four manufacturing suites, which will produce up to ten different vaccines using Baxter's proprietary technology. Pending regulatory clearance, Baxter expects to produce what is anticipated to be the first continuous cell-culture derived influenza vaccine, as well as vaccines for Japanese encephalitis, Hepatitis A, Ross River and West Nile.

"We believe that growth initiatives such as this opportunity in vaccines, together with the strategic investments we have made and continue to make in manufacturing capacity, collaborations and acquisitions position us extremely well for 2001 and beyond," said Harry M. Jansen Kraemer, Jr., chairman and chief executive officer. "With our continued progress and the currency hedges we have in place, we expect to achieve earnings growth in the mid-teens in 2001. Specifically, we expect to grow earnings in the high single digits in the first half of 2001, and in the mid- to high-teens in the second half of the year."

In addition to achieving earnings growth in the mid-teens in 2001, Baxter expects to accelerate its sales growth to the low double digits and generate a minimum of $500 million in operational cash flow after investing more than $1 billion in research and development and capital expenditures.

Baxter International Inc. is a global medical products and services company that provides critical therapies for people with life-threatening conditions. Baxter's products and services in bioscience (biopharmaceuticals, vaccines, biosurgery products and blood therapies), medication delivery and renal therapy are used by health-care providers and their patients in more than 100 countries.

This news release contains forward-looking statements that involve risks and uncertainties, including technological advances in the medical field, product demand and market acceptance, the effect of economic conditions, actions of regulatory bodies, the impact of competitive products and pricing and other risks detailed in the company's filings with the Securities and Exchange Commission. These forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements.

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	Media Contacts: Deborah Spak, (847) 948-2349   Investor Contacts: Neville Jeharajah, (847) 948-2875 Mary Kay Ladone, (847) 948-3371