Baxter International, Inc.
) entered a collaboration agreement with Coherus Biosciences,
Inc. to develop and commercialize a biosimilar to etanercept in
Brazil, Europe, Canada, and certain other markets.
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Under the agreement, Baxter will make an upfront payment of $30
million and up to $216 million based upon the development made by
Coherus Biosciences regarding the product as well as regulatory
Biosimilars are useful in treating a range of chronic and
life-threatening diseases. It is also helpful in reducing costs
and expanding patient access.
Under the agreement, both BAX and Coherus Biosciences will also
develop and commercialize an alternative biosimilar to
etanercept, based upon the outcome of clinical data.
Baxter International, a Zacks Rank #3 (Hold) stock, reported
second-quarter adjusted (excluding one-time items) earnings per
share of $1.16, which beat the Zacks Consensus Estimate by 3
cents and surpassed the year-ago earnings by 4%. The
second-quarter result also exceeded the company's earlier stated
guidance of $1.12-$1.14.
Revenues for the quarter went up a tad 3% (up 4% at constant
exchange rate or CER) to $3,669 million, missing the Zacks
Consensus Estimate of $3,707 million. On a geographic basis,
U.S.-based revenues in the quarter improved 3%, while
international revenues rose 3% (up 4% at CER).
Baxter's product pipeline is expected to be an important driver
of sales growth in future, but will probably not bolster the top
line significantly in the near term. Nevertheless, with the
Gambro acquisition, Baxter gains an established set of products,
which strengthen its existing line of dialysis products.
However, Baxter depends on the EU for about a third of its sales.
This is a cause for concern given recent fiscal tightening, a
glum outlook for hospital spending and tightening of
reimbursement. It also faces pricing pressure due to the advent
of group purchasing organizations (GPOs) in the U.S.
Most of the top peers of BAX are currently performing well. They
) with a Zacks Rank #1 (Strong Buy), and
Boston Scientific Corporation
), each with a Zacks Rank #2 (Buy).