Press releases

Baxter Reports Second Quarter Financial Results In Line with Guidance

Company Confirms Full-Year 2012 Outlook

DEERFIELD, Ill., July 19, 2012 - Baxter International Inc. (NYSE:BAX) today announced financial results for the second quarter and confirmed its full-year 2012 financial outlook.

Baxter reported net income of $661 million in the second quarter, an increase of 7 percent compared to $615 million reported in the same period last year. Earnings per diluted share of $1.19 advanced 11 percent from $1.07 per diluted share in the prior-year period. These results included a net after-tax benefit from special items totaling $42 million of income (or $0.07 per diluted share), for costs and adjustments related to recent business development transactions and certain financial reserves. Specifically, the company recorded a special after-tax charge totaling $23 million (or $0.04 per diluted share) related to a global collaboration with Chatham Therapeutics, LLC (Chatham) for the development and commercialization of potential treatments for hemophilia B using Chatham's recombinant gene therapy technology. This charge was more than offset by a net after-tax gain of $65 million (or $0.11 per diluted share) resulting primarily from adjustments to both the company's COLLEAGUE infusion pump reserves and estimated milestone payments associated with the 2010 acquisition of ApaTech Limited, an orthobiologic products company.

On an adjusted basis, excluding special items, Baxter's second quarter net income of $619 million increased 1 percent from $615 million reported in 2011. Adjusted earnings per diluted share of $1.12 rose 5 percent from $1.07 per diluted share last year, and was within the range of the company's previously issued earnings guidance of $1.10 to $1.12 per diluted share. 

Worldwide sales totaled $3.6 billion and increased 1 percent from year-ago levels. Excluding the impact of foreign currency, worldwide sales increased
4 percent. Sales within the United States advanced 6 percent to $1.5 billion, while international sales of $2.1 billion declined 2 percent.  Excluding foreign currency, international sales increased 3 percent.   

BioScience revenues of $1.6 billion increased 1 percent from the prior-year period.  Excluding the impact of foreign currency, BioScience sales rose
4 percent driven primarily by improved demand, particularly in the United States, for ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] for the treatment of hemophilia, and strong growth from select specialty plasma-based therapeutics and the company's portfolio of surgical sealants.  Also contributing to this performance was the benefit of the Synovis Life Technologies, Inc. (Synovis) acquisition, which was completed during the first quarter of 2012.

Medical Products sales of $2.0 billion also increased 1 percent from the prior-year period, and excluding the impact of foreign currency, sales rose
4 percent. This performance was driven primarily by solid gains in peritoneal dialysis patients, growth of certain injectable and nutritional therapies, as well as the impact from the company's acquisition of Baxa Corporation.  

Six-Month Results
For the first six months of 2012, Baxter reported net income of $1.2 billion, or $2.24 per diluted share, reflecting a 9 percent increase from last year on a per-share basis. Excluding special items, Baxter's adjusted net income for the six-month period was nearly $1.2 billion and earnings per diluted share of $2.13 increased 4 percent from $2.05 per diluted share reported in the comparable prior-year period.

Baxter's worldwide sales for the six-month period totaled $7.0 billion and increased 2 percent, and excluding foreign currency, sales increased
4 percent. BioScience sales of more than $3.0 billion grew 2 percent (or
5 percent excluding foreign currency), and Medical Products sales of
$4.0 billion also increased 2 percent (or 4 percent excluding foreign currency).

During the first half of 2012, Baxter generated strong cash flows from operations of approximately $1.4 billion and returned significant value to shareholders. On a year-to-date basis, Baxter has returned over $1.3 billion to shareholders through dividends totaling $374 million and share repurchases of $960 million (or approximately 17 million shares).   

Recent Highlights
"We remain confident that the focus on our diversified portfolio of critical therapies and innovation will position us well for future growth," said Robert L. Parkinson, Jr., chairman and chief executive officer. "We will continue to invest in our new product pipeline and seek complementary business development opportunities that will enhance our global presence, expand access to care, and create long-term value for our shareholders."

Baxter continued to enhance its portfolio and new product pipeline through investments in research and development and business development initiatives.  Recent achievements include the following:

  • Approval from the U.S. Food and Drug Administration (FDA) to market GAMMAGARD LIQUID 10% [Immune Globulin Infusion (Human)] as a treatment for multifocal motor neuropathy (MMN).  This is the first immunoglobulin treatment approved for MMN patients in the United States, and was approved in Europe in 2011.  MMN is associated with a progressive, asymmetric limb weakness mostly affecting the upper limbs, which can lead to significant difficulty with simple manual tasks.
  • Announcement of an investigator-initiated trial related to Baxter's on-going clinical programs evaluating the use of GAMMAGARD LIQUID 10% [Immune Globulin Infusion (Human)] for the treatment of Alzheimer's Disease (AD) at the Alzheimer's Association International Conference held in Vancouver, Canada. Three-year follow-up data of the Phase II, open-label 24-patient study demonstrated long-term stabilization of AD symptoms over a 36-month period in four patients who were treated with the optimal dose throughout the study period.  Larger studies, which are currently in progress, will further assess the safety and efficacy of GAMMAGARD LIQUID 10% in the treatment of the disease, and results from the first Phase III clinical trial are expected in the first half of 2013.
  • Approval of ADVATE [Recombinant Human Coagulation Factor VIII for injection] for the control and prophylaxis of bleeding episodes in individuals with hemophilia A (congenital factor VIII deficiency) in China by the State Food and Drug Administration. ADVATE is now approved in 54 countries worldwide.
  • FDA approval of a new 4000 IU dosage strength of ADVATE which provides the convenience of a single vial dosing opportunity for many adult patients, including some patients on a dosing schedule of every three days for prophylactic treatment with ADVATE.
  • Announcement of an exclusive global agreement with Chatham, an affiliate of Asklepios BioPharmaceutical, Inc. (AskBio), for the development and commercialization of potential treatments for hemophilia B utilizing Chatham's gene therapy technology.  The collaboration will allow Baxter to investigate Chatham's Biological Nano ParticlesTM (BNP), an advanced recombinant adeno-associated virus-(rAAV) based gene therapy technology that has shown promising therapeutic benefit in early clinical studies.
  • Announcement of a ten-year contract manufacturing agreement with Stichting Sanquin Bloedvoorziening (Sanquin Blood Supply Foundation) of the Netherlands to enhance supply of plasma-derived treatments for immune disorders, hemophilia, trauma and other critical conditions. Sanquin is a not-for-profit organization in the Netherlands that develops and produces pharmaceutical products, conducts scientific research and develops and performs a multitude of diagnostic services.  
  • Acquisition of the remaining interest of Sigma International General Medical Apparatus, LLC (SIGMA). SIGMA develops and manufactures smart infusion pump technology including the Spectrum large volume infusion pump, which provides advanced safety and clinician-friendly features.  In connection with the transaction, Baxter also acquired SIGMA's product development pipeline, which includes a platform of multiple infusion technologies with advanced safety capabilities.

Outlook for Third Quarter and Full-Year 2012
Baxter also announced today its guidance for the third quarter and confirmed its financial outlook for full-year 2012.

For the third quarter of 2012, Baxter expects sales growth, excluding the impact of foreign currency, of 5 to 6 percent (or approximately 1 percent including the impact of foreign exchange), and earnings per diluted share of $1.12 to $1.14, before any special items. 

For full-year 2012, Baxter continues to expect sales growth, excluding the impact of foreign exchange, of 4 to 5 percent (or approximately 2 percent including the impact of foreign exchange).  In addition, the company expects earnings of $4.50 to $4.56 per diluted share, before any special items, and cash flows from operations to exceed $3.0 billion.

A webcast of Baxter's second quarter conference call for investors can be accessed live from a link on the company's website at beginning at 7:30 a.m. CDT on July 19, 2012.  Please visit Baxter's website for more information regarding this and future investor events and webcasts, including the company's Investor Conference to be held October 9, 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, R&D pipeline and outlook for 2012.  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 regulatory submissions and 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 globally; 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, including satisfactory clinical performance; the company's ability to realize the anticipated benefits from its business development activities; 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.