) recently revealed critical Phase I/III study outcomes analyzing
the efficacy and safety of BAX 326. This is an investigational
recombinant factor IX protein, which is utilized for prophylaxis
and therapy in bleeding situations for victims (over 12 years of
age) of hemophilia B. The information was tabled at the 54th
Annual Meeting and Exposition of the American Society of
Hematology (ASH) held in Atlanta, Georgia.
BAX 326 has received orphan drug designation from the Food and
Drug Administration, which is a special designation granted to an
offering that upon approval may suffice for an unmet requirement
for individuals with the uncommon ailment. Supporting information
for the prophylaxis case (important for the orphan drug status)
was a part of the biologics license application.
The scientifically conducted Phase I/III study evaluated the
efficacy, safety and pharmacokinetics of BAX 326 on 73 patients
(with prior history of treatment) with moderate to severe forms
of hemophilia B. The results of the study showed that over 40% of
patients utilizing BAX 326 in the form of prophylactic therapy
did not suffer from bleeds.
Baxter announced earlier in 2012 that it had teamed with
Chatham Therapeutics to form a gene therapy oriented care for
hemophilia B. The future treatment of hemophilia B partly relies
on successful gene therapy.
The news regarding Baxter still remains somewhat mixed. On the
positive side, Baxter's focus on life-sustaining products which
are not commoditized partly insulate 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 the flip side, despite resilience in certain sub-segments,
we are concerned about relative stagnation in sales, a slightly
somber outlook for hospital spending and tightening of
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 long-term Neutral recommendation on
Baxter. The stock carries a Zacks #4 Rank, which translates into
a short-term Sell rating.
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