News Release

BAXTER DELIVERS STRONG THIRD QUARTER PERFORMANCE, WITH SALES INCREASING 13 PERCENT, EARNINGS UP 18 PERCENT

Baxter Expects to Meet Full-Year Financial Commitments for 2001

Company Establishes 2002 Commitments of Accelerated Sales Growth
in the Low-teens and Mid-teens EPS Growth

Baxter to Significantly Increase Investments in R&D and Manufacturing Capacity in 2002

DEERFIELD, Ill., October 18, 2001 -- Baxter International Inc. (NYSE:BAX) continued its strong momentum, reporting third quarter results today with solid gains in sales and earnings.

Baxter's sales in the third quarter rose 13 percent to $1.90 billion, up from the $1.69 billion in sales posted last year. Excluding the impact of foreign exchange, Baxter's sales grew 16 percent in the third quarter. Domestic sales grew 27 percent, while international sales were flat (or up 7 percent excluding the impact of foreign exchange).

Sales of the company's BioScience products advanced 25 percent in the third quarter to $680 million, reflecting the continued strong demand for Baxter's Recombinate Antihemophilic Factor (rAHF) and plasma-derived clotting factors used in the treatment of hemophilia, immune globulins used for the treatment of certain immune disorders, and leukoreduction systems used to remove white blood cells from whole blood or blood components. Medication Delivery sales totaled $716 million in the third quarter, an increase of 5 percent. Renal sales increased 10 percent to $504 million. Baxter's earnings and earnings-per-share grew 18 percent in the quarter to $272 million, or $0.45 per diluted share. This compares to the $231 million, or $0.38 per diluted share reported for the same period last year.

Nine-Month Results
Baxter's sales grew 11 percent year-to-date, or 16 percent excluding the impact of foreign exchange, to $5.53 billion. Domestic sales rose 23 percent during this period, while international sales increased 2 percent (or 10 percent excluding the impact of foreign exchange). BioScience sales rose 20 percent to $2.0 billion. Medication Delivery sales grew 6 percent to $2.1 billion, and Renal sales increased 8 percent to $1.4 billion.

The company's earnings in the first nine months of this year rose 15 percent to $739 million, up from the $645 million reported last year. Earnings per diluted share advanced 13 percent to $1.22, from the $1.08 reported last year. Earnings for the first nine months of 2001 exclude the one-time, non-cash impact of adoption of new accounting rules, as detailed in the company's first quarter results, and the 2000 results exclude a charge for in-process research and development and acquisition-related costs.

Financial Commitments for 2001
"Given our strong operational performance in the third quarter and the positive momentum we've generated during the last several years, we are well positioned to achieve our financial commitments for full-year 2001," said Harry M. Jansen Kraemer, Jr., chairman and chief executive officer. Baxter's financial commitments for 2001 are sales growth in the low double-digits, earnings growth in the mid-teens and operational cash flow of more than $500 million.

Financial Commitments for 2002
"We will continue to build on our strong momentum with continued focus on operational excellence while significantly increasing our sales and earnings growth rates over time. In order to achieve these goals, we will increase our investments in research and development and capital expenditures," commented Kraemer.

Baxter plans to significantly increase its investments in research and development and capital expenditures in 2002, with both increasing by more than 20 percent.

"We are well positioned to not only deliver solid growth in 2002, but also to substantially increase our investment in a number of growth initiatives, including development of new recombinant proteins, vaccines, drug delivery platforms, oncology products and renal dialysis solutions, as well as continued expansion of our BioScience production capacity," Kraemer added.

Specifically, Baxter has established the following financial commitments for 2002:

• Accelerate sales growth to the low-teens (at current foreign exchange rates).
  
  
• Grow earnings-per-share in the mid-teens.
  
  
• Generate operational cash flow of at least $500 million.

Recent Highlights

• In July, the European Medicines Evaluation Agency granted Baxter licensure for the company's Ceprotin, protein C concentrate, for use as a replacement therapy for people suffering from life-threatening blood clotting complications related to severe congenital protein C deficiency. Protein C is a component in human plasma that regulates the coagulation system and prevents abnormal clot formation (thrombosis).
  
  
• During the third quarter, Baxter announced that it is investing an additional $70 million to further expand and upgrade several of its BioScience facilities. The expansions will provide greater flexibility in manufacturing and will increase production capacity for the company's plasma-derived therapeutic proteins.
  
  
• In August, Baxter announced an agreement with Düsseldorf-based Degussa AG to acquire the company's ASTA Medica Oncology subsidiary, ASTA Medica Onkologie GmbH & CoKG, for approximately 525 million Euros (U.S. $470 million). ASTA Medica Oncology develops, produces and markets oncology products worldwide. The company's products are marketed in more than 100 countries, and have a significant market presence in Europe, North America and Latin America. The company's leading products include Endoxan (cyclophosphamide), Holoxan and Ifex (ifosfamide), and Uromitexan and Mesnex (mesna). The acquisition complements Baxter's existing oncology portfolio, bringing solid relationships with medical oncologists throughout the world, strong market presence, near- and long-term drug development opportunities and world-class production facilities. Baxter expects to allocate a significant portion of the purchase price to in-process research and development upon completion of the transaction in the fourth quarter of 2001.
  
  
• The Cardiovascular and Renal Drugs Advisory Committee to the US Food and Drug Administration (FDA) unanimously recommended approval of Extraneal (7.5% icodextrin), a peritoneal dialysis (PD) solution. If approved by the FDA, Extraneal would be the first solution with a new osmotic agent introduced for PD patients in the United States since 1978.
  
  
• Also in August, Baxter completed its acquisition of Cook Pharmaceutical Solutions, a unit of Cook Group Incorporated. Cook Pharmaceutical Solutions provides a complete line of pharmaceutical contract manufacturing services that includes a number of sterile product dosage forms such as solutions, suspensions and freeze-dried (lyophilized) powders in a variety of delivery systems including vials and pre-filled syringes. This broadens the range of delivery options Baxter is able to offer its pharmaceutical partners and enhances Baxter's position as a full-line drug delivery service provider.
  
  
• Baxter and Cerus Corporation continue to make progress on their collaboration to develop pathogen inactivation systems for blood components. The INTERCEPT Blood Systems are designed to inactivate viruses, bacteria, other pathogens and white blood cells from donated platelets, red blood cells and plasma prior to transfusion. The companies reported that the primary endpoints have been met in their US Phase III trials of the INTERCEPT Platelet System and INTERCEPT Plasma System. They anticipate starting a US Phase III clinical study of the INTERCEPT Red Blood Cell System later this year.
  
  
• In September, Baxter received FDA approval for the third production suite at its BioScience facility in Thousand Oaks, California. This facility is the manufacturing site for Baxter's recombinant Factor VIII therapy, Recombinate Antihemophilic Factor (rAHF), which is a clotting factor produced by recombinant DNA technology as a therapy for people with hemophilia.
  
  
• Recently, Baxter submitted a 510(k) application to the US Food and Drug Administration for the company's new ALYX automated blood component collection system. The ALYX system combines the collection of whole blood and its separation into components into one automated process, which will enable blood centers to optimize the contribution of each donor and help better match blood component supply with demand.
  

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

A webcast of Baxter's third quarter conference call for investors can be accessed live from a link on Baxter's website at www.baxter.com beginning at 10:00 a.m. CST on October 18, 2001. Please visit Baxter's website for additional information.

(ALYX, Baxter, Ceprotin, INTERCEPT Blood System, INTERCEPT Platelet System, INTERCEPT Plasma System, INTERCEPT Red Blood Cell System and Recombinate are trademarks of Baxter International Inc. and its affiliates. Endoxan, Holoxan, Ifex, Uromitexan and Mesnex are trademarks of ASTA Medica.)

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, foreign currency exchange rates 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.

FOR ADDITIONAL INFORMATION:

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

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