Thursday, July 16, 2009

Baxter Q2 - Edited

In the second quarter, BioScience revenues totaled $1.4 billion, which represents a 2 percent increase over the prior-year period. Excluding foreign currency, BioScience sales advanced 13 percent, reflecting strong double-digit gains across several core franchises, which offset weak sales of the company's FSME vaccine, primarily in Germany. Key drivers of this performance include robust growth of antibody therapies and other specialty plasma therapeutics, strong sales of recombinant therapies, including ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] for the treatment of hemophilia, as well as biosurgery products.....
Advancing Innovation and Expanding Product Offering -
Initiation of a Phase III study following successful completion of a Phase II study evaluating TISSEEL fibrin sealant as a hemostatic agent in vascular surgery. These studies are being conducted for submission to the Food and Drug Administration (FDA) to support a broad hemostasis indication for this product in the United States.

Robert L. Parkinson, Jr.

Without getting into some specific rates, let me say this. In most developed markets around the world there continues to be some opportunity to convert from plasma-derived Factor VIII to recombinant forms. A great example would be Japan, which still has a fairly high—I believe it's around 30% of their usage is still in plasma-derived Factor VIII but that is converting fairly rapidly to recombinant forms, which is one of the reasons why our ADVATE is doing so well in Japan.

In other developed markets, Western Europe and the U.S., you know, we're getting in the areas of diminishing returns, I think, in terms of use of plasma-derived Factor VIII and the opportunity to upgrade to recombinant forms. Although there does seem to continue to be some residual buying. Germany is a good example in Europe, which still uses quite a bit of plasma-derived Factor VIII.

I think the real opportunity that you alluded to in your question is what we call rest of world. Okay? And first of all, in emerging developing markets around the world, for the first time hemophilia is being treated to some meaningful degree, obviously with plasma-derived Factor VIII, so the first opportunity is just patients that previously weren't treated are not being treated with plasma-derived as those economies develop and as they allocate more of their national budgets to health care spending.

All of that plasma-derived adoption, of course, represents opportunity longer term to upgrade to recombinant forms, which is why we're re registering products like RECOMBINATE and ADVATE in China and so on. Most usage in China today is plasma-derived Factor VIII and there are many patients in China that aren't being treated.

So those are examples of the long-term opportunity, frankly, that are quite exciting. First of all, adopting plasma-derived Factor VIII and then over time setting the stage for upgrade conversions to recombinant forms.

So the big opportunity is really the rest of the world. There are selective residual opportunities—I mentioned Japan, Germany, and some of the other developed markets—for continued conversion from plasma-derived to recombinant forms.

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