Press Release

Baxalta Reports Continued Progress on Phase 1/2 Clinical Trial of BAX335, Investigational Gene Therapy Treatment for Hemophilia B

DEERFIELD, Ill., June 24, 2015 - Baxalta Incorporated, a wholly-owned subsidiary of Baxter International Inc. (NYSE:BAX), today reported continued progress on the Phase 1/2 open-label clinical trial assessing the safety and optimal dosing level of BAX 335, an investigational factor IX (FIX) gene therapy treatment for hemophilia B, during an oral presentation at the 2015 International Society on Thrombosis and Haemostasis (ISTH) Congress in Toronto, Canada.

Individuals with hemophilia B lack the ability to produce clotting factor IX and are today treated with infusions of plasma-derived or recombinant factor IX. BAX 335 is designed to provide a mechanism for a hemophilia B patient's own liver to begin producing FIX over an extended period following a single dose of treatment.

The technology Baxalta has investigated since 2012 is the Biological Nano Particle (BNP™) platform - an advanced rAAV8-based gene therapy technology obtained through the collaboration and subsequent acquisition of Chatham Therapeutics. The BNP platform is designed to enable patients to achieve stable factor IX activity on their own when infused in the body. To achieve a therapeutic effect while keeping vector doses as low as possible, BAX 335 uses FIX-Padua, a naturally occurring, highly active variant of FIX.

A total of seven patients in three sequentially-ascending dosing cohorts have been treated in the trial with evidence of a dose-related response. No patients have developed FIX inhibitors to date. Some FIX expression was observed in the lowest dosing cohort (2x1011 vector genomes [vg] per kilogram of body weight: vg/kg). In the second dosing cohort (1x1012 vg/kg), two patients have experienced no bleeds without regular infusions of FIX and one of these patients has had sustained FIX expression levels of 20-25 percent for 12 months.

In the highest dose cohort (3x1012 vg/kg), expression levels have peaked above 50 percent, though the two patients in this cohort experienced an immune response which has led to decreased FIX expression, with one patient resuming regular FIX infusions. Immune responses have been reported and managed in previous studies with gene therapy technology. Baxalta continues to address the immune responses observed while working to maintain target trough levels.

"Gene therapy has the potential to achieve a long term therapeutic solution for people with hemophilia and will continue to be a key focus for Baxalta," said John Orloff, MD, vice president and global head of research and development at Baxalta. "We continue to advance this program as we learn more about this new concept and its value for those living with hemophilia, with an opportunity to truly transform the treatment paradigm."

The clinical trial is assessing the safety of ascending doses of BAX 335 to determine the optimal single dose in up to 16 adult subjects with hemophilia B at treatment centers in the United States. The primary endpoint is the safety of a single dose of BAX 335 administered intravenously. Secondary endpoints include evaluation of the optimal dose to achieve stable therapeutic plasma FIX activity, as well as pharmacokinetics and immune response to treatment. Additional patients are being screened and more information on the trial is available at www.clinicaltrials.gov , by using Identifier #01687608.

In April 2014, Baxter acquired Chatham Therapeutics, LLC, an affiliate of Asklepios BioPharmaceutical, Inc. (AskBio), and its developmental gene therapy programs. Chatham's Biological Nano Particles (BNP), an advanced recombinant adeno-associated virus- (rAAV-) based gene therapy technology, has shown potential therapeutic activity in early studies. In addition to the research in hemophilia B, Baxalta is also advancing plans to evaluate the gene therapy technology in the treatment of hemophilia A.

A summary of the data is available here >

About Hemophilia B

Hemophilia B is the second most common type of hemophilia (also known as Christmas disease) and is the result of insufficient amounts of clotting factor IX, a naturally occurring protein in blood that controls bleeding. Approximately 26,000 people worldwide, including more than 4,000 in the U.S., have been diagnosed with hemophilia B. Hemophilia B is often a debilitating, chronic disease with complications that include bleeding episodes, hemophilic arthropathy (bleeding into a joint) and hospitalization.

About Baxalta

Baxalta Incorporated is a $6 billion global biopharmaceutical leader developing, manufacturing and commercializing therapies for orphan diseases and underserved conditions in hematology, oncology and immunology. Driven by passion to make a meaningful impact on patients' lives, Baxalta's broad and diverse pipeline includes biologics with novel mechanisms and advanced technology platforms such as gene therapy. The Baxalta Global Innovation and R&D Center is located in Cambridge, Massachusetts. Expected to launch in 2015 following separation from Baxter International, Baxalta's heritage in biopharmaceuticals spans decades. Baxalta's therapies are available in more than 100 countries and it has advanced biological manufacturing operations across 12 facilities, including state-of-the-art recombinant production and plasma fractionation. Headquartered in Northern Illinois, Baxalta employs 16,000 employees worldwide.

About Baxter International Inc.

Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, cancer, 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 a Phase I/II open-label clinical trial of BAX 335, including expectations with regard to the potential impact on patients, as well as plans to separate Baxter's biopharmaceutical and medical products businesses and related research and development strategies. These 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: clinical trial results; satisfaction of regulatory and other requirements; actions of regulatory bodies and other governmental authorities; changes in laws and regulations; product quality, manufacturing or supply issues; patient safety issues; the ability to successfully separate the businesses on the terms or timeline currently contemplated, if at all, and achieve the intended results; and other risks identified in Baxter's most recent filing on Form 10-K and other SEC filings and in Baxalta's Registration Statement on Form 10, all of which are available on Baxter's website. Baxter does not undertake to update its forward-looking statements.