DEERFIELD, Ill., April 19, 2012 - Baxter International Inc. (NYSE:BAX) today posted solid first quarter financial results which exceeded the company's previously issued revenue and earnings per share (EPS) guidance.
For the first quarter, Baxter reported net income of $588 million, an increase of 3 percent compared to $570 million reported in the same period last year. Earnings per diluted share of $1.04 advanced 6 percent from $0.98 per diluted share in the prior-year period. These results included a net after-tax benefit from special items totaling $19 million of income (or $0.03 per diluted share), for costs and adjustments related to recent business development transactions. Specifically, the company recorded special after-tax charges totaling $34 million (or $0.06 per diluted share) related principally to an upfront cash payment to Momenta Pharmaceuticals, Inc. (Momenta) for the development and commercialization of biosimilar compounds, which were more than offset by a gain of $53 million (or $0.09 per diluted share) resulting from an adjustment to estimated milestone payments associated with the 2011 Prism Pharmaceuticals, Inc. acquisition.
On an adjusted basis, excluding special items, Baxter's net income totaled $569 million, or $1.01 per diluted share, which exceeded the company's previously issued earnings guidance of $0.98 to $1.00 per diluted share.
Worldwide sales of $3.4 billion also exceeded the company's guidance and increased 3 percent compared to $3.3 billion reported in the first quarter of 2011. Excluding the impact of foreign currency, worldwide sales in the first quarter advanced 4 percent. Sales within the United States increased
3 percent, totaling $1.5 billion, while international sales exceeded $1.9 billion and also increased 3 percent (or 5 percent excluding the impact of foreign currency).
By business, BioScience revenues of $1.5 billion rose 4 percent (or 5 percent excluding the impact of foreign currency), driven primarily by strong demand in the United States for ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] for the treatment of hemophilia, and GAMMAGARD LIQUID [Immune Globulin Intravenous (Human)], used primarily in treating immune deficiencies. Also contributing to this performance was the benefit of the Synovis Life Technologies, Inc. (Synovis) acquisition, which was completed during the quarter, and solid growth in select specialty plasma-based therapies and vaccines.
Medical Products sales of more than $1.9 billion increased 3 percent (with foreign currency having no impact on sales growth). This performance was driven primarily by strong growth in anesthesia products and certain injectable and nutritional therapies.
Baxter continued to expand its portfolio and pipeline through investments in research and development and pursuit of business development opportunities to augment future growth. Recent highlights include:
- Acquisition of Synovis, which expands Baxter's biosurgery franchise. The Synovis portfolio includes biological and mechanical products used for soft tissue repair and microsurgery in a variety of surgical procedures.
- Clearance under the Hart-Scott-Rodino Antitrust Improvements Act for Baxter's global collaboration with Momenta to develop and commercialize follow-on biologic products, also known as biosimilars. With this collaboration, Baxter will leverage its leading clinical development and biologic manufacturing expertise, global leadership in sterile injectables and global commercial capabilities, while Momenta will provide its expertise in high-resolution analytics, characterization, and product and process development.
- Initiation of a Phase III clinical trial studying the efficacy and safety of adult autologous stem cells to increase exercise capacity in patients with chronic myocardial ischemia (CMI), based on positive results from the company's Phase II study. The trial is enrolling approximately 450 patients across 50 sites in the United States. CMI is one of the most severe forms of coronary artery disease, causing significant long-term damage to the heart muscle and disability to the patient.
- Approval by the U.S. Food and Drug Administration for an expanded indication for TISSEEL for general hemostasis in surgery when control of bleeding by standard surgical techniques is ineffective or impractical.
- Establishment of an extension study for patients who have completed
18 months of treatment in the company's ongoing Phase III Gammaglobulin Alzheimer's Partnership trial, to provide additional data related to the safety, efficacy and pharmacoeconomic impact of immunoglobulin treatment in Alzheimer's patients. Baxter has invited all sites and investigators who participated in the first Phase III study to take part in this extension study.
- Initiation of a second, confirmatory Phase III clinical trial to assess the safety and efficacy of GAMMAGARD LIQUID as a potential treatment for mild to moderate Alzheimer's disease. This study is enrolling approximately 400 patients in 80 centers around the world and is expected to take three years to complete.
- Selection of a site in Covington, GA for a new state-of-the-art manufacturing facility to support future growth of Baxter's plasma-based treatments. Construction will begin this year and will include operations supporting plasma fractionation, purification, fill-finish and a testing lab. Commercial production is scheduled to begin in 2018, with the new plasma fractionation facility adding up to three million liters of new capacity annually when fully operational.
Baxter has entered 2012 with strong momentum and confidence in our continued success," said Robert L. Parkinson, Jr., chairman and chief executive officer. "Our sustained focus on innovation and growth opportunities enables us to respond effectively to an evolving macroeconomic environment, while strengthening our market leadership and expanding access to care, achieving the highest standards of quality and safety, and creating enhanced value for Baxter, our shareholders, and patients worldwide."
Second Quarter and Full-Year 2012 Outlook
Baxter also announced today its guidance for the second quarter of 2012 and updated its guidance for the full year.
For full-year 2012, Baxter continues to expect sales growth, excluding the impact of foreign exchange, of 4 to 5 percent (or 2 to 3 percent including the impact of foreign exchange). In addition, the company now expects earnings of $4.49 to $4.57 per diluted share, before any special items, and cash flows from operations to exceed $3.0 billion.
For the second quarter of 2012, Baxter expects sales growth, excluding the impact of foreign currency, of 3 to 4 percent (or 0 to 1 percent including the impact of foreign exchange), and earnings per diluted share of $1.10 to $1.12, before any special items.
A webcast of Baxter's first quarter conference call for investors can be accessed live from a link on the company's website at www.baxter.com beginning at 7:30 a.m. CDT on April 19, 2012. Please visit Baxter's website for more information regarding this and future investor events and webcasts, including the company's Annual Meeting of Shareholders on May 8, 2012.
Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.
This release includes forward-looking statements concerning the company's financial results, business development activities, outlook for 2012 and R&D pipeline. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: demand for and market acceptance risks for new and existing products, such as ADVATE, and other technologies; future actions of regulatory bodies and other governmental authorities, including with respect to the company's implementation of the COLLEAGUE recall; product quality or patient safety concerns leading to product recalls, withdrawals, launch delays, litigation, or declining sales; future actions of governmental authorities and other third parties as U.S. healthcare reform legislation and other austerity measures are implemented; additional legislation, regulation and other governmental pressures, which may affect pricing, taxation, reimbursement and rebate policies of government agencies and private payers or other elements of the company's business; product development risks; inventory reductions or fluctuations in buying patterns by wholesalers or distributors; the impact of geographic and product mix on the company's sales; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; the availability of acceptable raw materials and component supply; fluctuations in supply and demand and the pricing of plasma-based therapies; the ability to enforce company patents; patents of third parties preventing or restricting the company's manufacture, sale or use of affected products or technology; the impact of global economic conditions on Baxter and its customers and suppliers, including foreign governments in certain countries in which the company operates; foreign currency fluctuations; and other risks identified in the company's most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on the company's website. The company does not undertake to update its forward-looking statements. Financial schedules are attached to this release and available on the company's website.