) recently reported that it received Food and Drug Administration
("FDA") approval for a 4,000 IU dosage of Advate [Antihemophilic
Factor (Recombinant), Plasma/Albumin-Free Method]. The approval
enhances Baxter's range of products for hemophilia patients. It is
the only seller of the 4,000 IU dosage.
Advate is meant for the avoidance or curtailment of bleeding in
victims of hemophilia A. The latest 4,000 IU dose provides the ease
of a single dosage for many patients.
Last December, Advate received FDA approval as a regular
prophylaxis to curtail the incidence of bleeding for patients with
hemophilia A. It thus became the sole antihemophilic recombinant
FVIII therapy approved in the domestic market for usage by both
children and adults.
The news regarding Baxter 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.
On June 25, 2012, Baxter reported that the FDA approved
Gammagard Liquid 10% -- Immune Globulin Infusion (Human) -- as a
therapeutic option for multifocal motor neuropathy (MMN). This
treatment had 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.
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 in a large number
of surgical operations. The acquisition will further expand
Baxter's offerings in the area of biosurgery and regenerative
treatment. The takeover of Synovis was completed in the first
quarter of 2012.
On the flip side, despite resilience in Plasma Proteins and
Antibody Therapy sub-segments, we are concerned about relative
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
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
Becton, Dickinson and Company
) in certain niches. We currently have a Neutral long-term
recommendation on Baxter. The stock currently retains a Zacks #3
Rank, which translates into a short-term Hold rating.
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