Baxter acquires surgical products

Baxter International Inc., a global medical products company, said Monday that it will acquire two hemostat and sealant products from Mallinckrodt.

It will acquire Recothrom Thrombin topical, the first and only stand-alone recombinant thrombin, and Preveleak Surgical Sealant, which is used in vascular reconstruction.

"Uncontrolled intraoperative bleeding can lead to a wide variety of clinical and economic complications for patients and hospitals. As a leading provider of advanced hemostats and sealants, Deerfield-based Baxter is focused on continually identifying solutions to help meet surgeons' varying needs," said Wil Boren, president of Baxter's Advanced Surgery business. "We are excited about the addition of Recothrom to help surgeons address less severe intraoperative bleeding and Preveleak to complement Baxter's existing portfolio of sealants for cardiovascular and other surgical specialties."

Thrombin is a proven blood coagulation agent -- used on its own or in combination with other hemostats -- that has been estimated to be used in more than one million patients per year in the United States to help surgeons address intraoperative bleeding.

Recothrom is a thrombin-based product indicated as an aid to hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and control of bleeding by standard surgical techniques is ineffective or impractical in adults and pediatric populations greater than or equal to one month of age. As the only topical hemostat from recombinant DNA origin approved in the United States and Canada, Recothrom can be used in pediatric and adult patients with or without antibodies to bovine-derived thrombin.

The acquisition also includes Preveleak, a surgical sealant designed to seal suture holes formed during surgical repair of the circulatory system and to reinforce sutured connections between blood vessels. Preveleak augments Baxter's portfolio of complementary hemostats, sealants and tissue products used in cardiovascular and other surgeries, offering surgeons additional clinically differentiated products to address patients' varying needs. Preveleak is approved in the United States and European Union.

Sales of the proposed acquired products totaled approximately $56 million in the twelve months preceding Sept. 29. Upon closing, the deal is expected to be modestly accretive to Baxter's 2018 adjusted earnings and increasingly accretive thereafter. Under the terms of the agreement, Baxter will acquire Recothrom and Preveleak for an upfront payment of approximately $153 million and potential contingent payments in the future.

The transaction is expected to close in the first half of 2018, subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Baxter sues Johnson & Johnson over FloSeal patents

Baxter (NYSE:BAX) accused Johnson & Johnson (NYSE:JNJ) of infringing 6 patents covering its FloSeal line with the Ethicon SurgiFlo line of competing surgical hemostasis products.

In a lawsuit filed last week in the U.S. District Court for Northern Illinois, Baxter said the alleged infringement is willful and asked Judge Sharon Johnson Coleman for triple damages, pre- and post-judgment interest, legal costs and a jury trial.

"Defendants' SurgiFlo products directly compete with Baxter's biosurgery products, including the Floseal family of products, which practice the Patents-in-Suit. On information and belief, defendants are aware of Floseal's established position in the hemostatic products market and carefully track Baxter's marketing and other activities related to the Floseal products in the United States and worldwide. For example, one or more of Defendants have repeatedly communicated with Baxter regarding competitive marketing issues in the United States and abroad pertaining to Floseal and SurgiFlo," Baxter alleged, according to court documents. "Defendants have infringed and will continue to infringe Baxter's intellectual property rights by making, using, selling, offering for sale within the United States and/or importing into the United States delivery products for hemostasis such as the SurgiFlo family of products."

Baxter submits application to FDA for pediatric indication of Rixubis to treat Hemophilia B

Baxter International has filed an application to the US Food and Drug Administration (FDA) for a pediatric indication for Rixubis [Coagulation Factor IX (Recombinant)] to treat hemophilia B.

The submission was based on a Phase II/III clinical trial, designed to assess the efficacy and safety of Rixubis in 23 previously-treated male patients less than 12 years of age with severe or moderately severe hemophilia B.

In 2013, the company had secured FDA approval for Rixubis in the US for adults with hemophilia B and it had filed for marketing approval in Europe in November.

During the trial, patients were treated with a twice-weekly Rixubis prophylaxis regimen (median dose 56 IU/kg) over six months or for a minimum of 50 exposure days (EDs).

The company said that the median annualized bleeding rate (ABR) was 2.0 (0.0 for spontaneous bleeds and joint bleeds).

In the trial nine patients (39.1%) experienced no bleeds and 23 patients (88.5%) were treated with 1-2 infusions.

The company said that out of the 26 bleeds seen in the trial, only two (in two patients) were spontaneous and no reports of inhibitor development, no allergic reactions, and no thrombotic or treatment-related adverse events were observed among the study participants.

Baxter BioScience vice president of global research and development Anders Ullman said the positive results among a pediatric patient population are consistent with those observed in the Rixubis pivotal study among adult patients with hemophilia B.

"We submitted these data as part of our application for a pediatric indication for RIXUBIS to advance effective therapeutic solutions for children with hemophilia B," Ullman said.

Clinical Papers - Fibrin Sealants, BioGlue, Perclot, HaemoCer, Thrombin

Baxter completes patient enrollment in phase III trial of BAX 855, extended half-life rFVIII to treat haemophilia A

Baxter International Inc. has completed enrollment in its phase III clinical trial of BAX 855, an investigational extended half-life, recombinant factor VIII (rFVIII) treatment for haemophilia A. The ongoing trial is aimed at assessing the efficacy of the compound in reducing annualized bleed rates (ABR) in both prophylaxis and on-demand treatment schedules, and will also evaluate its safety and pharmacokinetic profile.

BAX 855 was designed based on the full-length ADVATE [Antihemophilic Factor (Recombinant) Plasma/Albumin-Free Method] molecule, a product with 10 years of real-world experience. The BAX 855 molecule was modified with PEGylation technology designed to extend its duration of activity in the body.

"The BAX 855 development programme is a priority for Baxter as we evaluate the potential to provide an efficacious and safe treatment with an extended half-life for patients with hemophilia," said Anders Ullman, MD, Ph.D., vice president of global research and development in Baxter's BioScience business. "We are focused first and foremost on strategies to address optimal efficacy and minimize patients' bleeding episodes, while at the same time delivering on the convenience of less frequent dosing for this population with severe disease."

The phase II/III multi-centre, open-label study called PROLONG-ATE is evaluating BAX 855 among 146 adult patients with previously-treated severe haemophilia A. Patients participating in PROLONG-ATE receive treatment twice weekly (45 IU/kg) and are followed for six months. The primary endpoint of the study is the annualized bleed rate (ABR) during the treatment period. The study is also evaluating the safety and immunogenicity of the compound when administered on either prophylaxis and on-demand treatment regimens. Other outcome measures include number of infusions needed to treat bleeding episodes, time intervals between these episodes, pharmacokinetics and patient reported outcomes. To date, no inhibitors or safety issues have been reported in the study.

Based upon the results of the study, the company expects to complete the trial and file for regulatory approval late in 2014. Baxter is also initiating a continuation study for all patients who complete the pivotal phase II/III study, and expects to initiate a study of BAX 855 among pediatric patients in 2014.

The treatment protocol is based on the results of a phase I trial of BAX 855, assessing its safety, tolerability and pharmacokinetics. That trial found that the half-life (measuring the duration of activity of the drug in the body) of the investigational compound was approximately 1.5-fold higher compared to ADVATE. An extended half-life was achieved in all patients in the study using BAX 855, no patients developed inhibitors to either the base molecule, BAX 855 or to PEG, and no patients had allergic reactions. No treatment-related or serious adverse events were reported, and no patients withdrew from the study due to adverse events.

BAX 855 is built from the same native FVIII protein used in the production of ADVATE, and employs proprietary PEGylation technology from Nektar Therapeutics designed to extend the duration of activity of proteins. PEGylation technology has been widely used in various approved treatments.

ADVATE [Antihemophilic Factor (Recombinant) Plasma/Albumin-Free Method] is indicated for the control and prevention of bleeding episodes in adults and children (0-16 years) with haemophilia A. ADVATE is also indicated for routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adults and children (0-16 years) with haemophilia A. ADVATE is not indicated for the treatment of von Willebrand disease.

ADVATE has a demonstrated efficacy profile and a low rate of inhibitor development. ADVATE is a full-length (derived from the complete FVIII gene) recombinant FVIII product that is processed without any blood-based additives. Because no blood-derived components are added at any stage of the manufacturing process, the potential risk of transmitting pathogens that may be carried in blood-based additives is eliminated. There have been no confirmed reports of transmission of HIV, HBV or HCV with rFVIII treatments.

ADVATE is approved in 60 countries worldwide including the United States, Canada, 27 countries in the European Union, Argentina, Australia, Brazil, Chile, China, Colombia, Croatia, Ecuador, Hong Kong, Iceland, Iraq, Japan, Kuwait, Macau, Malaysia, Mexico, New Zealand, Norway, Panama, Puerto Rico, Serbia, Singapore, South Korea, Suriname, Switzerland, Taiwan, Tunisia, Turkey, Ukraine, Uruguay, and Venezuela.

Baxter (BAX) To Expand Access To Recombinant FVIII Hemophilia Treatment In Brazil

Baxter International Inc. (NYSE: BAX) announced an exclusive 20-year partnership with Hemobrás (Empresa Brasileira de Hemoderivados e Biotechnologia) to expand greater access to recombinant factor VIII (rFVIII) therapy for the treatment of hemophilia A in Brazil.

Hemophilia A is a genetic condition in which the body does not produce enough clotting protein factor VIII. It is estimated that more than 10,000 people in Brazil are living with hemophilia A, and today the vast majority are treated with plasma-derived FVIII therapy.

Recently, Baxter highlighted the importance of developing innovative business models, including public and private partnerships, aimed at improving the quality of and access to care in both developed and emerging markets.

Through this innovative partnership, Baxter will be the exclusive provider of Brazil's recombinant FVIII treatment over the next 10 years while the companies work together on the technology transfer to support development of local manufacturing capacity by Hemobrás.

Baxter will receive cash payments for product it supplies to Hemobrás and, following completion of the technology transfer, royalties on recombinant FVIII produced by Hemobrás. The company expects peak annual sales to exceed $200 million.

''Our unique collaboration with Hemobrás is a demonstration of Baxter's leadership in hemophilia, reflects our expertise and commitment to the community, and positions us as an attractive partner that can make a significant impact on expanding access to quality care to patients around the world,'' said Robert Parkinson Jr., chief executive of Baxter.

Baxter Submits Application for FDA Approval of Recombinant Factor IX for the Treatment of Hemophilia B

DEERFIELD, Ill. - Baxter International Inc. (NYSE:BAX) today announced that the company has submitted a biologics license application (BLA) to the United States (U.S.) Food and Drug Administration (FDA) for approval of BAX 326, a recombinant factor IX (rFIX) protein being investigated for the treatment and prophylaxis of bleeding episodes for patients over 12 years of age with hemophilia B.

Hemophilia B, also known as Christmas disease, is the second most common type of hemophilia and results from insufficient amounts of clotting factor IX, a naturally occurring protein in blood that helps to control bleeding. 1 Approximately 25,000 people worldwide, including more than 4,000 in the U.S., have been diagnosed with hemophilia B. 2

The BLA filing is based on results from a global Phase III study conducted in 10 countries around the world. The prospective, controlled, multicenter study evaluated the pharmacokinetics, efficacy, safety and immunogenicity of BAX 326 in 73 patients with severe or moderately severe hemophilia B previously treated with other factor IX therapy. The study met its primary objectives and the company plans to present the complete data from the study in late 2012. Baxter expects to file its application for BAX 326 in Europe in 2013.

"Hemophilia B patients have relatively limited options for their treatment today, with only one commercially available recombinant (genetically engineered) protein. As part of our long-standing commitment to the hemophilia community, we continue to pursue new potential treatment options like BAX 326 to support patients with this debilitating disease," said Prof. Hartmut J. Ehrlich, M.D., vice president of global research and development in Baxter's BioScience business.

In select countries, Baxter currently offers a plasma-derived factor IX treatment, Immunine [Factor IX Concentrate (Human)], for patients with hemophilia B, which has more than 16 years of patient experience in Europe and Latin America. In addition, Baxter recently announced a partnership with Chatham Therapeutics, LLC to develop a gene therapy based treatment for hemophilia B. Gene therapy could represent another important first for the community as an innovative potential therapy for hemophilia B treatment.

Baxter Announces ADVATE Approval in China for the Treatment of Hemophilia A

Baxter International Inc. announced the approval of ADVATE[Recombinant Human Coagulation Factor VIII for injection] for the control and prophylaxis of bleeding episodes in individuals with hemophilia A (congenital factor VIII deficiency) in China by the State Food and Drug Administration (SFDA). It is estimated that more than 50,000 people in China are living with hemophilia A.

''The introduction of recombinant FVIII therapies in China offers new treatment options for hemophilia patients. The launch of ADVATE is another step in advancing hemophilia care in China,'' said Professor Yang Renchi, Institute of Hematology and Blood Diseases Hospital, Chinese Academy of Medical Sciences and Peking Union Medical College, the leading professional hematological institution providing basic medical research with clinical services in China.

''Great strides have been made in managing hemophilia, allowing people with this serious condition to live longer, more active and fulfilling lives than ever before,'' said Guan Tao, Secretary General of Hemophilia Home, the hemophilia patient organization in China. ''The availability of ADVATE will be an important milestone for people with hemophilia in China.''

ADVATE is infused directly into the bloodstream and works by temporarily raising the level of factor VIII in the bloodstream, allowing the body's blood clotting process to properly function. Extensive global use and multiple clinical trials demonstrate clinical evidence for ADVATE. With SFDA's action, ADVATE is now approved in 54 countries worldwide.

''The approval of ADVATE in China marks an important milestone for Baxter and supports our ongoing commitment to treating individuals living with hemophilia,'' said Ludwig Hantson, Ph.D., president of Baxter's BioScience business.

Baxter continues to work closely with the Chinese hemophilia community, including both patients and treaters, to provide access to care for this life-saving, life-sustaining therapy. In 2010, Baxter cooperated with the Ministry of Health to set up a ''Hemophilia Disease Management System,'' China's first nationwide hemophilia patient registration and management system integrating diagnosis and treatment information. In recent years, Baxter has donated more than five million IUs of hemophilia products to Chinese patients and has provided a number of resources to raise awareness of the disease.

About ADVATE

ADVATE [Antihemophilic Factor (Recombinant) Plasma/Albumin-Free Method] was initially approved by the FDA in July 2003 for control and prevention of bleeding episodes in adults and children (0-16 years) with hemophilia A. ADVATE is a full-length (derived from the complete FVIII gene) recombinant FVIII product that is processed without any blood-based additives. Because no blood derived components are added at any stage of the manufacturing process, the potential risk of transmitting pathogens that may be carried in blood-based additives is eliminated. There have been no confirmed reports of transmission of HIV, HBV or HCV with rFVIII therapies.

ADVATE is approved in the United States, Canada, 27 countries in the European Union, Argentina, Australia, Brazil, Chile, China, Colombia, Croatia, Hong Kong, Iceland, Iraq, Japan, Macau, Malaysia, New Zealand, Norway, Panama, Puerto Rico, Serbia, Singapore, South Korea, Suriname, Switzerland, Taiwan, Uruguay and Venezuela.

In the United States, ADVATE [Antihemophilic Factor (Recombinant) Plasma/AlbuminFree Method] is also indicated for routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adults and children (0-16 years) with hemophilia A. ADVATE is the only antihemophilic factor approved in the United States for prophylactic use in both adults and children. ADVATE is not indicated for the treatment of von Willebrand disease.

DuraSeal™ Sealants vs. Tisseel™ Fibrin Sealant

Baxter Announces FDA Approval of Expanded Indication for TISSEEL

DEERFIELD, Ill., Jan 30, 2012 (BUSINESS WIRE) -- Baxter International Inc. announced today that the U.S. Food and Drug Administration (FDA) has approved TISSEEL [Fibrin Sealant] to include general hemostasis in surgery when control of bleeding by standard surgical techniques is ineffective or impractical. TISSEEL is effective in heparinized patients. TISSEEL mimics the final stages of the body's own blood clotting cascade, creating a clot that adheres to the wound surface and helps achieve hemostasis.

"The expanded indication for TISSEEL offers more surgeons an effective tool for controlling bleeding across a wider variety of surgical procedures," said Sibu Saha, M.D., Professor of Surgery, University of Kentucky. "This includes patients who have been treated with heparin who may have unique treatment challenges, which was the case for some of the patients involved in Baxter's clinical trials."
A Phase III clinical study assessed the safety and efficacy of TISSEEL in peripheral vascular surgery compared with manual compression, a standard of care, in 140 evaluable patients (70 patients per treatment arm). In the study, TISSEEL was shown to be statistically significantly better than manual compression in achieving hemostasis. These study results complement a clinical data package showing the safety and effectiveness of the use of TISSEEL as an adjunct to hemostasis.
"TISSEEL and its multiple application devices make it well-suited for a variety of surgical situations, such as open and laparoscopic procedures, reinforcing Baxter's commitment to supporting solutions to the surgical community," said Prof. Hartmut J. Ehrlich, M.D., vice president of global research and development in Baxter's BioScience busines

Important Risk Information

For Topical Use Only. Do not inject TISSEEL directly into the circulatory system or into highly vascularized tissue. Intravascular application of TISSEEL can lead to intravascular coagulation, may result in life-threatening thromboembolic events and may increase the likelihood of acute hypersensitivity reactions in susceptible patients. Exercise caution to minimize the risk of intravascular application when using TISSEEL in surgery.

Do not use TISSEEL in individuals with a known hypersensitivity to aprotinin.

Do not use TISSEEL for the treatment of severe or brisk arterial or venous bleeding. In these situations, TISSEEL will be washed away in the flow of blood before hemostasis can be attained.

Hypersensitivity or allergic/anaphylactoid reactions may occur with the use of TISSEEL. Such reactions may especially be seen if TISSEEL is applied repeatedly over time or in the same setting, or if systemic aprotinin has been administered previously.

Aprotonin is known to be associated with anaphylactic reactions. Even in the case of strict local application of aprotinin, there is a risk of anaphylactic reactions to aprotinin, particularly in the case of previous exposure.

Discontinue administration of TISSEEL in the event of hypersensitivity reactions. Remove remaining product from the application site.

Air or gas embolism has occurred when fibrin sealant was administered using pressurized gas. This may occur if a spray device is used at higher than recommended pressures and in close proximity to the tissue surface.

When using the EASYSPRAY device, or an equivalent spray device for open surgical procedures cleared by FDA, TISSEEL must not be sprayed in enclosed body areas and must be sprayed onto only visible application sites.

TISSEEL is denatured when exposing to solutions containing alcohol, iodine or heavy metals. If any of these substances have been used to clean the wound area, the area must be thoroughly rinsed before the application of TISSEEL.

Apply TISSEEL as a thin layer by dripping or spraying using cannula or spray set. Excess clot thickness may negatively interfere with wound healing.

The safety and effectiveness of TISSEEL used alone or in combination with biocompatible carriers in neurosurgical procedures or other surgeries involving confined spaces have not been evaluated; its use in this setting is not FDA approved.

TISSEEL is made from human plasma. It may carry a risk of transmitting infectious agents, e.g., viruses, and theoretically, the Creutzfeldt-Jakob disease (CJD) agent.

Baxter International's CEO Discusses Q4 2011 - and the International Markets

Robert L. Parkinson
...In our regenerative medicine business, we achieved a number of milestones, including the approval and U.S. launch of ARTISS Fibrin Sealant for use in facial surgery and the U.S. regulatory filing for TISSEEL Fibrin Sealant for vascular surgery providing a broad hemostasis label. As we've previously mentioned, we're very pleased with the publication of data from Baxter's Phase II chronic myocardial ischemia adult stem cell program, which was published in the scientific journal Circulation Research....
Third, we recently announced the definitive agreement to acquire Synovis, an acquisition that complements and expands Baxter's regenerative medicine and biosurgery franchise, including a number of devices and biological products for hemostasis, tissue sealing and adherence.

Robert J. Hombach

Yes. And so net-net, not much of an impact to speak of on the base of $4.31 of earnings. But as we move into 2012, clearly, we're projecting a much more pronounced impact. And maybe I'll just take a minute here and kind of walk everyone through the drivers because I think this is important. As we've talked about, regularly, Baxter has about 60% of our revenues outside the U.S. We've increasingly highlighted for investors that now slightly more than 20% of our revenues come from emerging markets. And in fact, emerging markets have been growing 2 to 3 times the rate of developed markets over the last 5 years. So the mix of our business certainly has shifted towards emerging markets to a much greater degree. As we've highlighted in the past, for developed markets, we have the ability through natural hedges given our manufacturing footprint, which we have in places like Europe and Canada and Japan, Australia and so on. We have some natural hedges there, but also we utilize financial hedges in those developed markets. Now I would pause here to say, as we've talked about in the past, our pipe policy, we hedge 80% of our projected exposures. And by the nature of hedging, when you're looking 12 to 18 to 24 months out, you have to be careful in your projections to ensure that you don't get yourself in an overhead situation, hence, the 80% with a 20% buffer. But what that does mean is we do have some residual exposure muted but some residual exposure in the developed markets. As we said in the past, with emerging markets, we do not hedge. We do not utilize financial hedges, and we have modest natural hedges in some manufacturing facilities in Latin America, Eastern Europe and so on but nothing near the degree we have in the developed markets. And so our bottom line drop to exposure on the emerging markets is much more leveraged. So to frame that exposure for you then, looking at it by region, so within Latin America, from an operating profit perspective that would be exposed to foreign currency, think of that in terms of $300 million to $400 million of annual profit. And that's primarily Brazil, Colombia and Mexico. For Eastern Europe, which is primarily Russia, Poland and Turkey, again, about $300 million of operating profit on an annual basis. And then in Asia Pacific, and there we would exclude Japan, Australia, New Zealand and China because of the stability of the currency, so all of Asia excluding those 3 is another roughly $300 million of operating profit on an annual basis. So you add that up. That's $900 million to $1 billion of profit exposed to currency in emerging markets. And as you've seen, there's been quite a bit of volatility, and given where we're sitting today and where rates are today relative to where they were on average in 2011, if you assume an 8% to 10% weakening across that basket of emerging market currencies, that's $80 million to $100 million of incremental exposure that we're factoring in here. And you add to that the slight 20% residual impact from the developed markets that goes unhedged, and that's how we get into this kind of $0.15 to $0.18 range of FX exposure. Now, as you would imagine, given the volatility, we've assumed somewhat conservative rates relative to where market rates are today. There's been of bit of a run-up here in the last few days, but given the volatility, I hesitate to call it very conservative. And so that's the picture. But if I step back and think about as a large U.S. multinational corporation in thinking about the long run, being along the emerging markets, whether it's from a growth perspective or currency perspective, is exactly where we want to be. We continue to see great opportunities there, but in times of financial crisis like this, where the correlation between those currencies and the U.S. dollar is all going one way, it creates this kind of outsized exposure that we're having to factor into our guidance here for 2012. So thanks for bearing with me, but I think it's important that people understand the breadth of the issue for us.

David R. Lewis - Morgan Stanley, Research Division

I will -- just maybe one more quick one for Bob Parkinson. And Bob, there's been a lot of concerns here in the quarter regarding European austerity. You've talked a lot about old Europe pressures. I guess we've been surprised about where that pressure's coming from. I think it's a little different than where the investor sees within your plasma business versus your injectable and your nutritional business. Can you just sort of talk to us in the way you're see the pressure and which businesses for Baxter are proving to be more robust? And then where -- which businesses are seeing sort of more pharmaceutical-like pressure?

Robert L. Parkinson

Yes. I mean, so the negative impact of the austerity measures, first of all, is just kind of what I call general softness, David, and underlying demand. But these are the kind of things we see globally. So surgical procedures and things of that nature are somewhat softer than what's been reflected historically. So now we'd run across virtually all our businesses, certainly even our IV business and so on and so forth. But the other pressure that's probably more pronounced and is more associated with our BioScience business would be pricing pressures with governments who clearly are under the gun to implement austerity measures. And given healthcare spend and well-large item that represents on national budgets and so on, we continue to see governments virtually unilaterally implementing various pricing actions, and that impact is more pronounced in things like, say, biosurgery where people are making trade-off decisions in terms of clinical options that they have but also, most of our BioScience products, which are more expensive. So as an example, countries like France implement actions in terms of taking prices down. It's a haircut, David. So it's not as pronounced as what you would see with some of the tender actions, I would say, on hemophilia because encouragingly, we haven't seen the expansion beyond the Anglo markets of the tender activity for hemophilia. But -- so we think we've captured in our guidance for next year those known pricing actions that will be taken on a country-by-country basis. We also think we've reflected kind of the underlying softness of demand. But I think we have to be cognizant of the fact that given the extreme austerity measures and pressures that exist that unlike the U.S. governments in Europe, most notably, really have a history of implementing unilateral actions for which there's not a lot of control. We think we've captured it, but like I say, given the environment, I think, we have to be cognizant that there could be more there. And by the way, this is an ongoing thing. I mean, this is -- it's why I talk about dealing with the new environment in our company, in our culture and so on. This isn't something that's going to pass through this year in -- or through the end of 2012. It's going to be with us....

David H. Roman - Goldman Sachs Group Inc., Research Division

Okay. And then as I look at the Plasma Protein business, the issues about timing of imports in China, I think you had talked about that last quarter, as well a new product, the delay on a large tender for PD Factor VIII in Brazil. Are those issues that we should think about as being ongoing for the next several quarters? Or will those normalize at some point, whereby that business gets back to sort of stable underlying growth on a reported basis?

Robert J. Hombach

Yes. Certainly, Brazil for sure is a timing issue, and we're hoping to continue to accelerate into China. Without them it becomes -- it is a great growth opportunity. So yes, you should see normalized growth rates here in 2012 for that category.

Mary Kay Ladone

Although I would mention, David, that tenders tend to be volatile, and we can see shifts from quarter-to-quarter, so just to highlight that.

Robert L. Parkinson

David, the one thing I would add to the China situation, there's been local action by the Chinese government to further scale back some of their local plasma collection operations in the country. So this importation of albumin in China would appear to be something that is going to be sustainable for the near future, certainly over the next few years, I think, given some of the local issues they manage through.

BAX Q3 2011

In terms of individual business performance and beginning with BioScience, global BioScience sales of $1.5 billion increased 9% in the third quarter. Excluding foreign currency, BioScience sales increased 4%. Within the product categories, recombinant sales of $552 million grew 5%. Excluding foreign currency, sales declined 1% as growth of 4% in the U.S. was offset by the expected impact from recent tenders and somewhat slower demand across Europe, given strong performance in the previous quarter. On a year-to-date basis, excluding the impact of tenders we discussed, global recombinant sales growth, excluding currency, is in mid single digits consistent with global market demand.

Moving on to Plasma Proteins. Sales in the quarter were $372 million and advanced 8%. Excluding the impact of foreign currency, sales grew 4%. Growth across the various Plasma Proteins was significantly offset by lower albumin sales as a result of temporary supply constraints and delays in the clearance of shipments in China as a result of new testing guidelines that were implemented there late last year. Combined, these 2 items impacted sales in the quarter by approximately $20 million.

Sales in the U.S. improved sequentially across multiple products in the portfolio, including FEIBA, PD Factor VIII and ARALAST, but were down 8% year-over-year driven primarily by the supply constraints of albumin, whereas, international sales climbed 10% driven by strong demand for FEIBA and PD Factor VIII despite certain tender delays in Eastern Europe.

In Antibody Therapy, sales of $380 million increased 13%. Excluding foreign currency, sales were up 11%, driven by a robust demand for GAMMAGARD LIQUID and the launch of SubQ. Growth in this category of 11% also reflects some ongoing benefits related to Octapharma of at least $20 million in the third quarter.

Sales in regenerative medicine, which includes our BioSurgery products, totaled $143 million and increased 10%. Excluding foreign currency, sales increased 5% driven by high single-digit growth of Fibrin Sealants. This performance was offset by lower ACTIFUSE revenues triggered by the temporary disruption in the U.S. channel resulting from the planned transition to a direct sales model from ApaTech's former distributor model that we mentioned last quarter....

Baxter Announces FDA Approval of ARTISS Fibrin Sealant for Use in Face-Lift (Facial Rhytidectomy) Procedures

DEERFIELD, Ill., Aug 31, 2011 (BUSINESS WIRE) -- Baxter International Inc. announced today that the U.S. Food and Drug Administration (FDA) has expanded the indication of ARTISS [Fibrin Sealant (Human)] to include adhering tissue flaps during facial rhytidectomy surgery (face-lift). ARTISS is the only premixed, ready-to-use fibrin sealant specifically indicated for tissue adherence in facial rhytidectomy (face-lift) and burn surgeries. It was first approved by the FDA in 2008 to adhere autologous skin grafts to surgically prepared wound beds resulting from burns in adult and pediatric populations one year of age or older.

Baxter Acquires Ostene

August 17, 2011
Ceremed, Inc. (Los Angeles) announced today that it has entered into a definitive agreement to sell its Ostene® brand bone hemostasis product line to Baxter International Inc. The agreement provides for Baxter to acquire all rights to the Ostene® brand, including manufacturing.
Founded in 2002, Ceremed is a privately held medical device company focusing on the design and development of medical materials, utilizing their proprietary AOC PolymerBlend™ technology. Ceremed has successfully commercialized applications ranging from coatings and carriers to bone hemostasis. Based on the proven safety, efficacy and versatility of the AOC PolymerBlend™ technology, Ceremed looks forward to the continued development and innovation of products that meet the needs of today’s surgeons.
“We are very pleased that Baxter has agreed to acquire the Ostene® brand.” said Tadeusz Wellisz, M.D., chairman of Ceremed.
With the divestiture of both the marketing and manufacturing of Ostene®, Ceremed will free up assets needed to focus on bringing new products to market that will meet the demands of patients and device manufacturers alike. “This is a great opportunity for Ceremed to take the next step to becoming a major player in the biomaterials market,” noted Bill Lamm, president of Ceremed.

Baxter Q2

Sales in regenerative medicine, which includes our BioSurgery products, totaled $147 million and increased 11%. Excluding foreign currency, sales increased 6%, driven by double-digit growth of surgical sealants and hemostats.....

Robert Parkinson

Yes, I would -- this is Bob Parkinson, David. A number of pieces to that. The reality is the European markets continue to be challenging, particularly the more developed Western markets. But having said that, we continue to benefit significantly by emerging developing markets, China, Brazil and so on. Also, generally speaking, the plasma proteins across the board, including developed Europe, were very strong in the second quarter. So it's tough to generalize regarding all markets outside the U.S. We are pleased by the overall strength and growth of our sales outside the U.S., but it is really -- the dynamics are very different between developed Europe, which continues, and we anticipate it's going to continue to be challenging versus our expanding investment and presence in emerging and developing markets, which consistently has been a growth priority for us...

Jury Rules Against Baxter In Contaminated Chinese Heparin Case - "The Cheap Stuff"

An Illinois jury on Thursday awarded $625,000 to the estate of a Chicago-area man who was administered a blood-thinning drug that contained a contaminated ingredient medical-products company Baxter International Inc. (BAX) manufactured in China.
It was the first of hundreds of pending lawsuits against Baxter to go to trial.
The cases are related to a 2008 finding by the Food and Drug Administration, which discovered a link between contaminated heparin marketed by Baxter to Chinese suppliers of the active ingredient used in heparin. In the U.S., the contaminated heparin was linked to dozens of deaths and hundreds of allergic reactions.
Plaintiffs contended 63-year-old Steve Johansen received low doses of contaminated heparin during dialysis and a bolus dose during a subsequent hospitalization at Palos Community Hospital in late 2007.
The active pharmaceutical ingredient in the contaminated heparin received by Mr. Johansen and other Americans was obtained from Baxter/SPL's Chinese supplier, Changzhou SPL (a joint venture with SPL).  This crude heparin was referred to in the companies' own internal records as "the cheap stuff."  Baxter and SPL knew that the plant had never been inspected by the U.S. FDA (which the FDA later attributed to clerical error) or Chinese regulatory officials.  When the Chinese plant was finally inspected by the FDA after the heparin contamination crisis, multiple violations were found resulting in an import ban.  Additional evidence also brought to light during the trial established that Baxter and SPL failed to establish and comport with quality/purity specifications, including an impurity profile, and failed to trace and control their supply chain.  At trial, the Court granted partial directed verdict in favor of Mr. Johansen holding that the product sold by Baxter and SPL was defective as a matter of law.

According to the verdict, the award of compensation was for pain and suffering and was found against Baxter and the Chinese supplier, Scientific Protein Laboratories LLC.
Baxter spokeswoman Deborah Spak said the company is taking responsibility for legitimate cases of harm related to the contamination seriously, adding that Baxter will "vigorously defend claims that are not consistent with the definition established by public health authorities."
Baxter's therapies treat serious medical problems such as cancer, immune disorders and trauma. The company is coming off a challenging year due to economic weakness, costs pegged to the U.S. health-care overhaul and some product-quality and regulatory challenges.

Baxter Q1 Edited

Robert Parkinson

.......I'd like to take a moment just to update you on a few key programs and some recent highlights. First, during the quarter, we submitted a Biologics License Application or BLA to the FDA [Food and Drug Administration] for the U.S. approval of TISSEEL Fibrin Sealant as a hemostatic agent in vascular surgery. This is an expansion beyond the current marketed indications and completes the necessary clinical requirements for a broad hemostasis label, which represents a very significant opportunity for our Regenerative Medicine business.

Robert Hombach

.....Sales in Regenerative Medicine, which includes our BioSurgery products totaled $140 million and increased 18% on both the reported basis and after adjusting for foreign currency. These results reflect solid growth, particularly for FLOSEAL, and a benefit of just over $10 million in incremental sales related to the Apatech [ApaTech Inc.] acquisition, which was completed at the end of the first quarter last year. Excluding ApaTech, sales gross for the category was in high single digits.

Baxter Q4 Edited

In our Regenerative Medicine business, we completed a Phase III study evaluating TISSEEL Fibrin Sealant as a hemostatic agent in vascular surgery, and filed for regulatory approval of our TISSEEL Fibrin Sealant for use in facial surgery in the U.S.....
And as you know, there were a number of factors negatively affecting sales in the quarter, which collectively totaled $80 million, or two percentage points of growth. These items include the impact of healthcare reform, the U.K. recombinant Factor VIII tender loss and a difficult comparison in vaccines related to pandemic revenues reported in the fourth quarter of 2009.
For the full year, sales increased 4% to $13.1 billion. And excluding foreign currency, sales growth was 3%, in line with our guidance. In terms of the individual businesses and beginning with BioScience, in the fourth quarter, global BioScience sales of $1.5 billion increased 1%. Excluding foreign currency, BioScience sales increased 4%, reflecting accelerated growth versus the prior three quarters.
As previously mentioned, BioScience sales were adversely impacted by five percentage points due to the impact of healthcare reform, the U.K. tender loss and the difficult vaccine comparison. Excluding these items, BioScience sales advanced 9% on a constant-currency basis. For the full year, global BioScience sales exceeded $5.6 billion and increased 1% on both a reported basis and after adjusting for foreign currency.
Within the product categories, recombinant sales of $534 million declined 5% as expected. Excluding foreign currency, sales declined 3%, primarily due to the U.K. tender and a reduction of inventory levels in the U.S. channel.....

Matthew Miksic - Piper Jaffray Companies
And then finally, this TISSEEL product that you mentioned for hemostasis, anything you can tell us about -- just the size of that opportunity, what that could mean, whether it comes this year or late this year would be helpful?

Robert Parkinson
We have quantified that and communicated, I know we've quantified and communicated that.

Mary Ladone
We have. But we have several indications that are already approving. Clearly, the competition in this area, Matt, has the broad hemostasis indication. So we are a little bit put at a compromised position. So it would help in terms of share gains to have this particular indication.

Robert Hombach
And TISSEEL is a meaningfully sized product for us. So returning to growth with this new indication would be helpful.

Matthew Miksic - Piper Jaffray Companies
So it's incremental, not a game changer necessarily?

Mary Ladone
Correct.

Baxter buying hemophilia business for up to $285M

Baxter International Inc. said Friday that it will pay as much as $285 million to buy a hemophilia drug candidate and other assets from privately held biotechnology company Archemix.Baxter currently sells the hemophilia drug Advate. The new deal gives the company all of Archemix's hemophilia assets, including an early-stage drug candidate called ARC19499. ARC19499 is a subcutaneous hemophilia therapy that is intended to improve blood clotting. An early clinical trial is being performed in the U.K.Baxter said the value of the deal could rise to $285 million including milestone payments. The drug and medical device maker said it will take a $30 million charge in the fourth quarter for the value of the hemophilia unit's research and development activities. Baxter expects the purchase to close by the end of 2010.

Baxter International raises outlook after third-quarter earnings beat expectations

Baxter International Inc.’s third-quarter earnings beat Wall Street expectations Thursday, propelled by a jump in sales in the company’s IV solutions business. After the company’s earnings release, Baxter’s stock price rose by more than 3 percent.
The Deerfield-based medical supply and pharmaceutical company posted earnings of $594 million, or $1.01 per diluted share, in the quarter ended Sept. 30, besting Wall Street’s consensus projections of 97 cents.  Net income rose 12 percent from the same quarter in 2009, when the company earned $532 million, or 87 cents per diluted share.
In the 2009 quarter, the company incurred a one-time charge of $27 million for the retirement of a syringe pump.  Without that cost, 2010 third-quarter earnings would have been 1 percent lower than 2009.
Still, the company raised the floor of its 2010 annual forecast from $3.93 to $3.96 per diluted share, and now expects 2 percent to 3 percent annual sales growth. Its previous forecast called for growth in the range of 1 percent to 3 percent.  The top forecast figure remained at $3.98.
“We continue to aggressively manage general administrative and discretionary spending across the company,” Robert Parkinson, Baxter’s chairman and chief financial officer, said in a Thursday morning conference call.  “We’re selectively investing in several key promotional activities aimed at demand creation, new product launches and driving future growth of our higher margin products.”
Baxter’s third-quarter revenue grew by 3 percent to $3.2 billion from last year’s $3.1 billion.  The medical delivery sector, which manufactures intravenous solutions and sets, intravenous nutritional products, medical pumps and drug manufacturing products, spurred much of the company’s third-quarter momentum by racking up $1.2 billion dollars in sales, up 2 percent globally and 12 percent domestically.
The company’s bioscience division also is outperforming analysts’ expectations, led by developments in critical-care blood plasma replacement therapeutics. Sales at the division did not grow significantly during the quarter but have grown 3 percent so far this year, totaling $3.4 billion.
“We view this commentary, quarterly results, and outlook as all positives for the company and encourage investors to revisit what should be a core holding in the healthcare space,” said Daniel Owczarski, a financial analyst with Avondale Partners LLC.
In the first nine months, Baxter has earned $1.1 billion, or $1.79 per diluted share, down 35 percent from the same period last year, when the company earned $1.7 billion, or $2.66 per diluted share. Revenue, rose 3 percent to $9.3 billion, compared with last year’s $9.1 billion.