DEERFIELD, Ill., October 18, 2012 - Baxter International Inc. (NYSE:BAX) today reported third quarter net income of $583 million, or $1.06 per diluted share. This compares to net income in the same period last year of $576 million, or $1.01 per diluted share, reflecting an increase of 5 percent on a per share basis. Baxter's third quarter 2012 financial results included an after-tax research and development charge of $45 million (or $0.08 per diluted share) associated with the company's recently announced European licensing agreement with Onconova Therapeutics, Inc. Financial results from the third quarter 2011 included an after-tax charge of $48 million (or $0.08 per diluted share).
On an adjusted basis, excluding special items from both periods, Baxter's third quarter net income of $628 million increased 1 percent from $624 million reported in 2011. Adjusted earnings per diluted share of $1.14 rose 5 percent from $1.09 per diluted share last year and was in line with the guidance the company previously provided of $1.12 to $1.14 per diluted share.
Worldwide sales totaled $3.5 billion, which were comparable to revenues generated in the third quarter last year. Excluding the impact of foreign currency, Baxter's sales advanced 5 percent. Sales within the United States of $1.5 billion accelerated 8 percent, while international sales of $2.0 billion declined 5 percent. Excluding the impact of foreign currency, international sales increased 2 percent as strength across many countries in Latin America and Asia Pacific offset continued softness in mature European markets.
BioScience revenues of $1.5 billion were similar to sales in the prior-year period. Excluding the impact of foreign currency, BioScience revenues rose
5 percent, driven by double-digit growth in the U.S. across all key product categories. This was primarily the result of robust growth in demand for ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method], GAMMAGARD LIQUID [Immune Globulin Intravenous (Human)], and other plasma-based therapeutics including FEIBA, an inhibitor bypass therapy, and products to treat hereditary emphysema. In addition, the company benefited from the recent acquisition of Synovis Life Technologies, generating incremental sales in the quarter of approximately $20 million. The strong U.S. performance was partially offset by the impact of tenders in markets outside the U.S., largely related to the timing of purchases for certain plasma-based therapeutics.
Medical Products sales of $2.0 billion were also in line with the prior-year period. Excluding the impact of foreign currency, Medical Products revenues increased 4 percent resulting from strong growth of injectable drugs, anesthesia products and nutritional therapies, and the benefit from the company's acquisition of Baxa Corporation, with incremental sales totaling more than $40 million.
"The solid underlying fundamentals of our businesses continue to be supported by the medically-necessary nature of our portfolio and therapies, growing global demand, and our broad global presence," said Robert L. Parkinson, Jr., chairman and chief executive officer. "In addition, our company's strong financial position provides continued flexibility to invest in innovation, advance our new product pipeline, and pursue new business development opportunities to enhance future growth."
For the first nine months of 2012, Baxter's net income increased 4 percent to $1.83 billion from $1.76 billion last year, while earnings per diluted share advanced 8 percent to $3.29 per diluted share from $3.06 per diluted share reported in the prior-year period. On an adjusted basis, excluding special items, Baxter reported net income for the nine-month period of $1.82 billion, comparable to the prior-year period. On a per share basis, adjusted earnings per diluted share of $3.27 increased 4 percent from $3.14 last year.
Baxter's worldwide revenues totaled $10.4 billion and increased 1 percent (or 4 percent excluding the impact of foreign currency) compared to sales of
$10.3 billion in the same period of 2011. The company's sales within the United States grew 6 percent in the year-to-date period, while international sales declined 2 percent during the period (and increased 3 percent excluding the impact of foreign currency). On a year-to-date basis, sales within the company's BioScience business totaled $4.6 billion, and increased 2 percent (or 5 percent excluding the impact of foreign currency). Medical Products sales grew 1 percent (or 4 percent excluding the impact of foreign currency) to
Baxter continues to focus on enhancing growth by optimizing its core business portfolio, advancing the company's new product pipeline, pursuing and accelerating the pace of business development initiatives, and capitalizing on the opportunity to develop new business models, which include public and private partnerships aimed at improving the quality of and access to care in both developed and emerging markets. Recent achievements reflect these priorities and include the following:
- Baxter launched its new 4000 IU dosage strength of ADVATE, providing the convenience of a single vial dosing opportunity for many adult patients, including those patients on a dosing schedule of every three days for prophylactic treatment with ADVATE.
- Baxter submitted a biologics license application (BLA) to the U.S. Food and Drug Administration (FDA) for approval of BAX 326, a recombinant factor IX (rFIX) protein being investigated for the treatment and prophylaxis of bleeding episodes for patients over 12 years of age with hemophilia B.
- Baxter completed enrollment in the first study of the company's home hemodialysis system. The study was designed to examine the performance and safety of the investigational device. The study was conducted in the United States and 24 patients were enrolled in the study during which 700 treatments were delivered to participants. Data will support the company's submission for CE Mark in 2013.
- The company began dosing patients with malignant solid tumors in a Phase I clinical trial of a monoclonal antibody, representing the company's efforts to extend its oncology portfolio with advanced biological research and development. The candidate is a fully-human, recombinant anti-MIF (anti-macrophage migration inhibitory factor) monoclonal antibody with potential to be a new therapeutic agent in treatment of cancer.
- Baxter entered into a European licensing agreement with Onconova Therapeutics, Inc. for rigosertib, a novel targeted anti-cancer compound currently in a Phase III study for the treatment of a group of rare hematologic malignancies called Myelodysplastic Syndromes and in a Phase II/III study for pancreatic cancer.
- Under the terms of an agreement with Momenta Pharmaceuticals, Baxter recently selected a third biosimilar for development, a monoclonal antibody for oncology designated as M511. This is in addition to the selection of M923 and M834 earlier this year, targeted for the treatment of autoimmune and other inflammatory disorders. Baxter and Momenta have the opportunity to develop up to six biosimilars through their partnership.
- The government of Brazil announced the selection of Baxter as an exclusive partner for recombinant FVIII hemophilia treatments. The company is working closely with Brazilian authorities to finalize the agreement and enhance access to critical treatments and provide recombinant therapies to patients.
Outlook for Fourth Quarter and Full-Year 2012
For the fourth quarter of 2012, the company expects earnings of $1.24 to $1.27 per diluted share, before any special items, and sales growth of 5 to 6 percent excluding the impact of foreign currency (or 3 to 4 percent including the impact of foreign currency).
Baxter has also tightened the range of its previously-issued guidance and now expects earnings, before special items, of $4.51 to $4.54 per diluted share for full-year 2012. For full-year 2012, Baxter continues to expect sales growth, excluding the impact of foreign currency, of 4 to 5 percent (or approximately
2 percent including the impact of foreign currency). In addition, the company expects cash flows from operations to exceed $3.0 billion.
A webcast of Baxter's third 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 October 18, 2012. Please visit Baxter's website for more information regarding this and future investor events and webcasts.
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 and other collaborations, 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; 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.