) recently reported that the Food and Drug Administration ("FDA")
approved Gammagard Liquid 10% -- Immune Globulin Infusion (Human)
-- as a therapy option for multifocal motor neuropathy ("MMN").
This treatment earlier received a regulatory nod in Europe in 2011.
It is the first immunoglobulin therapy for MMN patients in the U.S.
for which Baxter has received Orphan Drug Designation. Gammagard
Liquid is called Kiovig outside North America.
MMN is characterized by weakness in the upper limbs thereby having
a debilitating impact on the victim. MMN is difficult to diagnose
and hard to manage with relatively few treatments options.
Following FDA approval, doctors may offer Gammagard Liquid as a
treatment option for MMN patients.
Baxter received the approval for Gammagard Liquid for treating MMN
following a randomized, placebo controlled study to consider the
safety, tolerability and efficacy of Gammagard Liquid on 44
patients with MMN. The results of the study were tabled at the
annual meeting of the American Academy of Neurology in April
The news regarding Baxter still remains mixed. On the positive
side, Baxter's focus on life-sustaining products, which are not
commoditized, partly insulates it from an economic downturn. The
company is able to generate recurring revenues, and consistent cash
flow, due to its focus on chronic diseases. Among other positive
factors, Baxter retains a strong product pipeline with several
products in late-stage clinical development.
Baxter, in November 2011, completed its acquisition of Baxa
Corporation. The takeover highlights the company's continued
commitment toward patient safety and nutrition. It also permits
Baxter to provide a wider set of solutions for the safe preparation
and delivery of IV medication. Baxa's know-how will benefit
patients across the globe.
Moreover, Baxter struck a deal, in December 2011, to buy Synovis
Life Technologies, a well-known provider of mechanical and
biological products for the repair of soft tissue utilized in a
large number of surgical operations. The acquisition will further
expand Baxter's offerings in the area of biosurgery and
On the flip side, despite resilience in Plasma Proteins and
Antibody Therapy sub-segments, we are concerned about stagnation in
sales, a slightly somber outlook for hospital spending and
tightening of reimbursement. We also account for the unfavorable
impact of foreign exchange translation and possible dilution
associated with the company's acquisitions of Baxa and Synovis.
Improved execution has lifted sentiment somewhat toward Baxter. It
is a good bet for value investors willing to wait as fundamentals
improve further. Among others, the company competes with
Becton, Dickinson and Company
) in certain niches. We currently have a Neutral long-term rating
on Baxter. The stock currently retains a Zacks #4 Rank, which
translates into a short-term "Sell" recommendation.
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