BAX Up on FDA Nod and CE Marking - Analyst Blog

By
A A A

There is good news from Baxter International Inc. ( BAX ). The Illinois-based global medical products and services company announced receipt of the U.S. Food and Drug Administration (FDA) approval for its FEIBA (Anti-Inhibitor Coagulant Complex) treatment as well as CE marking in Europe for the VIVIA hemodialysis (HD) system. The news resulted in a 2.7% rise in the stock till yesterday.

FEIBA Treatment

FEIBA is the first and only FDA-approved treatment for routine prophylaxis that controls the frequency of bleeding episodes in hemophilia A or B patients, who have developed inhibitors. Inhibitors are antibodies produced by the body's immune system in response to factor replacement treatment. About one-third of previously untreated patients with hemophilia A are at risk of developing inhibitors.

Development of inhibitors is a major complication associated with hemophilia treatment. Inhibitors lead to lack of response to treatments and their presence increases the risk of developing more complications.

A pivotal Phase III study, FEIBA PROOF, is responsible for the approval. The study showed a 72% reduction in median annual bleed rate (ABR) compared to treatment with an on-demand regimen.

VIVIA Hemodialysis system

VIVIA hemodialysis system is capable of delivering frequent, extended duration, short daily or nocturnal home HD therapy, known as High Dose HD therapy1. It is designed with the patient as the primary operator.

BAX will introduce VIVIA in a few number of European dialysis clinics in 2014 to allow patients and healthcare providers become familiar with the system. The company plans to expand launching the product to other European nations in 2015.

Recent Other Development

Last month, Baxter entered a global licensing agreement with Cell Therapeutics, Inc. ( CTIC ) to jointly develop and commercialize JAK2/FLT3 inhibitor pacritinib that fights against genetic mutations linked to myelofibrosis, leukemia and some tumors. As per the agreement, BAX gained the commercialization rights for all indications for pacritinib outside the U.S. while it jointly commercializes with CTIC in the U.S. Following the announcement, shares of Baxter rose 0.2% to $68.82 after the market closed yesterday.

According to the agreement, Baxter will provide an upfront payment of $60 million, including a $30 million equity investment in CTIC. Moreover, Cell Therapeutics will receive clinical, regulatory, and commercial launch milestone payments of up to $112 million ($40 million of which relates to clinical milestones likely to be achieved in 2014) from BAX.

Earnings

Baxter posted a 4% rise in third-quarter 2013 adjusted earnings per share to $1.19, in line with the Zacks Consensus Estimate. The third-quarter results were also within the company's earlier stated guidance of $1.18-$1.21.

Revenues for the quarter went up 9% to $3,774 million but slightly missed the Zacks Consensus Estimate of $3,795 million. On an organic basis (excluding Gambro that contributed $100 million), revenues climbed 6%. Foreign currency did not impact revenues in the quarter. On a geographic basis, revenues in the U.S. as well as internationally improved 9% to $1,642 million and $2,132 million, respectively.

For the fourth quarter of 2013, BAX expects revenue growth in the range of 14% to 15% (12% to 13% at CER). This includes the impact of the Gambro AB acquisition, amounting to $400 million. Adjusted earnings per share are expected in the band of $1.24 to $1.26. The Zacks Consensus Estimate for revenues and earnings per share are pegged at $4,249 million and $1.25 respectively, for the quarter.

Baxter affirmed its earnings forecast for 2013, which includes the impact of its Gambro acquisition. For 2013, the company expects reported revenue growth of 6% (7% at CER). Excluding the impact of foreign exchange rate and the Gambro acquisition, Baxter continues to expect sales growth of approximately 4% (or 3% including the impact of foreign currency). The company expects to generate revenues from the Gambro acquisition of approximately $500 million for the year.

Moreover, the company anticipates adjusted earnings per share in the range of $4.65 to $4.67 for 2013. The Zacks Consensus Estimate for 2013 earnings per share of $4.66 lies within the guided range. Baxter continues to expect cash flow from operations to be $3,300 million for 2013.

The recent collaboration with Cell Therapeutics is expected to benefit Baxter's oncology business. It will also strengthen its position as a solution provider for hematology and rare diseases.

Currently, Baxter has a Zacks Rank #4 (Sell). Better-ranked medical product stocks include NuVasive, Inc. ( NUVA ) and Chimerix, Inc. ( CMRX ). NuVasive sports a Zacks Rank #1 (Strong Buy) while Chimerix carries a Zacks Rank #2 (Buy).



BAXTER INTL (BAX): Free Stock Analysis Report

CHIMERIX INC (CMRX): Free Stock Analysis Report

CELL THERAPEUT (CTIC): Get Free Report

NUVASIVE INC (NUVA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ABR , BAX , CMRX , CTIC , HD

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

112,007,213
  • $14.79 ▼ 2.12%
79,492,830
  • $17.05 ▲ 0.24%
63,236,947
  • $56.63 ▲ 7.54%
55,553,482
  • $3.41 ▼ 3.94%
53,662,885
  • $14.19 ▼ 3.47%
52,606,858
  • $100.75 ▲ 0.64%
39,074,810
  • $4.84 ▼ 2.22%
38,681,912
  • $25.62 ▲ 0.79%
As of 9/30/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com