Baxter Gets Nod for Advate 4000 IU - Analyst Blog

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Baxter International ( BAX ) 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 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 ( BDX ) 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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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: BAX , BDX

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