Baxter International Acquires Orphan Drug Producer - Analyst Blog

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Baxter International Inc. ( BAX ) revealed that it has acquired privately-owned orphan drug (pharmaceutical drug used for treating rare disease) producer in the U.S. AesRx, LLC that will help it address a highly unmet clinical need of patients suffering from blood-related disorders.

AesRx is renowned for its novel Aes-103 drug used in the treatment for sickle cell disease (SCD) aka sickle-cell anaemia (SCA). As part of the deal, BAX is acquiring the development and commercialization rights of Aes-103.

BAX acquired the company by making an initial payment. The company will make additional future payments based on development, regulatory and commercial milestones.

A Brief Note about SCD

SCD is basically a hereditary blood disorder, which causes red blood cells to assume an abnormal rigid sickle shape that could eventually block capillaries and small blood vessels.

SCD could lead to serious or fatal complications (such as chronic hemolytic anemia, chronic pain, acute painful crisis, stroke, acute chest syndrome, and cumulative damage to tissues and organs) and reduce life expectancy.

More than 13 million people around the world suffer from SCD. Roughly 100,000 people are affected by SCD in the U.S. and 40,000 in Europe. It mainly afflicts people of African origin as well as of Mediterranean or Middle Eastern descent.

How Aes-103 Works?

Aes-103 is a tiny molecule compound (5-hydroxymethylfurfural) that works by binding to hemoglobin and increasing oxygen affinity and stabilization, leading to reduction in sickling of red blood cells and thereby lowering sickling-related outcomes such as vaso-occlusive crisis, pain, severe anemia, and fatigue.

Aes-103 has received Orphan designation from the U.S. Food and Drug Administration (FDA). It is also eligible for Orphan designation in Europe.

Currently, Aes-103 is in a Phase 2 clinical trial as part of an ongoing collaboration with the NIH's National Center for Advancing Translational Sciences (NCATS) through its Therapeutics for Rare and Neglected Diseases (TRND) program.

The Aes-103 compound was originally patented by Virginia Commonwealth University and developed by a team from the VCU Institute for Structural Biology and Drug Discovery, an interdisciplinary research center spanning the university's Schools of Medicine and Pharmacy.

Recent Acquisition

In April this year, BAX announced plans to acquire Chapel Hill, NC-based gene therapy-mediated cures developer Chatham Therapeutics, LLC for an initial payment of $70 million.

BAX already has collaboration with Chatham Therapeutics since May 2012. The collaboration was aimed at evaluating Chatham's Biological Nano Particle (BNP) platform, which is an advanced recombinant adeno-associated virus (rAAV)-based gene therapy technology.

The BNP platform is considered as an effective treatment for hemophilia B, known as BAX 335, which is currently in a Phase I/II study. It helps the patient's own liver to begin producing FIX following a single dose of the genetically engineered treatment.

Post-acquisition, BAX will gain broader access to Chatham's gene therapy platform, including the previously partnered hemophilia B (FIX) program, a preclinical hemophilia A (FVIII) program, and the future application to additional hemophilia treatments. It will help the company develop and commercialize treatments for hemophilia.

Zacks Rank

Currently, BAX retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry are OraSure Technologies, Inc. ( OSUR ), Hospira Inc. ( HSP ), and Wright Medical Group Inc. ( WMGI ).

Both OraSure Technologies and Hospira retain a Zacks Rank #1 (Strong Buy), while Wright Medical Group carries a Zacks Rank #2 (Buy).

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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 Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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