Baxter International Inc. (BAX) has found more problems with its long-troubled "Colleague" intravenous fluid pumps, including software glitches the company needs to fix and user problems it has advised customers to avoid.

The Deerfield, Ill., company sent a letter to customers on Jan. 23, a day after its fourth-quarter earnings call, to highlight the newfound issues with its entire roster of 275,000 Colleague pumps around the world, including pumps the company issued during remediation efforts to fix other problems. Colleague pumps were first pulled in 2005 amid a host of problems and defects linked to some deaths.

The latest problems came under the spotlight Wednesday when Baxter said the U.S. Food and Drug Administration had assigned a "Class 1" recall status to the matter. That is the agency's most serious recall classification.

Baxter said it doesn't need to pull its pumps from customers, however, and believes it should be able to fix glitches in the field. Chief Financial Officer Robert Davis added that the problems, which involve devices that have recently made a minimal contribution to sales, won't have a financial impact on the company. He spoke at a Barclays health-care conference.

Nevertheless, Baxter shares sank $2.77, or 5.4%, to close at $48.57 on Wednesday.

Colleague pumps are on sale internationally but remain off the large U.S. market amid a remediation effort that has dragged on longer than expected. The company left Colleague U.S. sales out of its 2009 guidance, indicating no expected return this year. Davis said the latest news doesn't affect the timeline for fixing the pumps or getting them back on the domestic market.

The pumps posted sales of $170 million in 2004, the last full year of sales before they were shelved.

At issue currently are three main problems, including a device-related glitch that prompts failure codes and causes the pumps to stop delivering medicine and fluids to patients. Baxter is working on a repair, spokeswoman Erin Gardiner said. The January letter to customers advised them to use another replacement pump from inventory if these problems emerge and also included detailed operating instructions in case a back-up isn't immediately available.

Two people died after their pumps failed, although the hospitals in both cases said "they did not believe the subsequent patient deaths had to do with the pumps," Gardiner said.

Baxter also highlighted two other issues, including the potential for damaged batteries and for cleaning fluid to cause short-circuiting and overheating. Both of these are user-related problems, Baxter determined, that can also be addressed in the field.

The pumps have batteries for use when patients are being transported, or during a hospital power outage, but they should be plugged into an outlet whenever possible. Because the pumps are electronic devices, they are sensitive to cleaning fluids. In one case, four health-care workers suffered smoke inhalation from an improperly cleaned machine, Baxter said.

Though the Colleague pumps are an ongoing issue, they would at best represent a small portion of sales at Baxter, which also makes products to address serious problems like immune-system disorders and kidney failure, and is expected by analysts to post total sales of about $12.4 billion this year. The recession-induced slowdown in hospital capital spending may be helping Baxter by keeping hospitals from seeking out other pump suppliers such as Cardinal Health Inc. (CAH) and Hospira Inc (HSP).

Cardinal has had its own problems with infusion systems, and it issued a voluntary safety alert on Tuesday regarding the potential for improper dosing with certain equipment. The company last month announced an amended consent decree with the FDA - it has operated under the decree since early 2007 - that set plans for a detailed review of infusion pump products.

The new issue involves the "Alaris PC" unit and "Alaris PCA" module, and not other devices, Cardinal said.

Leerink Swann analyst Rick Wise said in a note that "there are no easy alternatives for hospitals" despite Baxter's Colleague issues. He doesn't see any financial impact from the latest problems and said Wednesday's stock-price slide created a buying opportunity.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

(Dinah Wisenberg Brin contributed to this article.)