Baxter Reports Strong First Quarter Financial Results Exceeding Expectations & Confirms 2014 Full-Year Guidance

Press Release:
  Apr 17, 2014 — DEERFIELD, Ill., - Baxter International Inc. (NYSE:BAX) today reported first quarter financial results that exceeded the company's previously issued guidance and confirmed its full-year 2014 financial outlook.

For the first quarter, Baxter reported net income of $556 million and earnings per diluted share of $1.01, compared to net income of $552 million and earnings per diluted share of $1.00 in the same period last year. First quarter 2014 results include after-tax special items totaling $96 million (or $0.18 per diluted share), for intangible asset amortization and costs associated with the integration of its Gambro AB acquisition, business development and business optimization initiatives. First quarter 2013 results included net after-tax charges totaling $49 million (or $0.09 per diluted share).

On an adjusted basis, excluding special items in both periods, Baxter's first quarter net income of $652 million increased 8 percent from $601 million reported in 2013. Adjusted earnings per diluted share of $1.19 advanced
9 percent from $1.09 per diluted share last year, exceeding the company's previously issued earnings guidance of $1.06 to $1.09 per diluted share. Financial results include an after-tax gain of $35 million (or $0.06 per diluted share) associated with the sale of certain equity investments, which will largely be reinvested in the business over the balance of the year.

Worldwide sales of $3.95 billion increased 15 percent (or 16 percent excluding foreign exchange), compared to $3.45 billion reported in the first quarter of 2013. Excluding the contribution of Gambro revenues, which totaled $400 million, Baxter's worldwide sales increased 3 percent to $3.55 billion (or 5 percent excluding the impact of foreign currency).

By business, BioScience revenues of $1.61 billion rose 5 percent (or 6 percent excluding the impact of foreign currency). This performance was driven primarily by double-digit growth of ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] and FEIBA (an inhibitor therapy), improved U.S. sales of plasma-based therapeutics including GAMMAGARD LIQUID [Immune Globulin Intravenous (Human)] used primarily in treating immune deficiencies, and a benefit from accelerated timing of milestone payments related to the company's ongoing collaborations with governments on the development of influenza vaccines.

Medical Products sales increased 22 percent to $2.34 billion with performance augmented by the Gambro acquisition and strong sales of peritoneal dialysis products and certain injectable drugs. Excluding revenues associated with the Gambro acquisition, Medical Products sales increased 1 percent (or 4 percent excluding the impact of foreign currency).

"Positive momentum is building and Baxter is off to a strong start in 2014," said Robert L. Parkinson, Jr., chairman and chief executive officer. "We delivered strong financial results, continued to enhance our flexibility to invest for future growth, build and advance the new product pipeline, expand our business portfolios and position the company for sustained performance and success."

Baxter's new product pipeline is focused on a number of programs that improve the quality of care and address key, high-potential areas of unmet medical need. Recent highlights include:

- FDA approval of a label change allowing for a shorter total infusion time for GLASSIA, a chronic augmentation and maintenance therapy indicated for adults with emphysema due to congenital deficiency of alpha-1 antitrypsin (AAT), an under-diagnosed hereditary condition characterized by a low level of alpha-1 protein in the blood. This change enhances convenience and allows for less overall time for the entire infusion process, from preparation to administration.
- Success in meeting the primary efficacy endpoint in Baxter's Phase 3 study of BAX 111, the first stand-alone recombinant treatment in clinical development for von Willebrand disease. The company expects to file for regulatory approval in the United States before the end of 2014 and also intends to pursue a study for a prophylaxis indication.
- Presentation of interim data at the European Association for Hemophilia and Allied Disorders (EAHAD) from the first year of observation from the ADVATE HaEmophilia A Database (AHEAD) study, a four-year outcomes registry of hemophilia A patients. A total of 562 patients have been enrolled to date, and the data supports the clinical experience of prophylaxis treatment with ADVATE, showing the majority of patients (55.3%) on prophylaxis had fewer than two bleeding episodes per year, with a median annual bleed rate (ABR) of 1.1. Of these patients, 51 percent experienced no bleeds during one year of treatment.
- Restructuring of the company's ongoing agreement with Xenetic Biosciences for the development of BAX 826, a recombinant Factor VIII treatment utilizing Xenetic' s proprietary polysialic acid (PSA) technology. BAX 826 is currently in preclinical development as a treatment that may be administered less frequently, potentially at once-weekly intervals, without compromising efficacy.
- Acquiring Chatham Therapeutics, including Chatham's Biological Nano Particle (BNP™) platform – an advanced recombinant adeno-associated virus-(rAAV) based gene therapy technology. In addition to the ongoing development program for the investigational hemophilia B treatment, BAX 335, Baxter obtained access to a preclinical hemophilia A (FVIII) program, and the potential future application to additional hemophilia treatments.

"In addition to these achievements, during the first quarter we announced a significant milestone in the company's history – plans to create two separate, independent global healthcare companies, one focused on developing and marketing innovative biopharmaceuticals and the other on life-saving medical products – each offering shareholders distinct investment profiles and unique investment opportunities, " added Parkinson. "This decision underscores Baxter's commitment to ensuring its long-term strategic priorities remain aligned with shareholders' best interests, while improving our competitive position and performance, enhancing operational, commercial and scientific effectiveness and creating value for patients, healthcare providers, and other key stakeholders."

Second Quarter and Full-Year 2014 Outlook
Baxter also announced today its guidance for the second quarter and confirmed its guidance for the full year.

For the second quarter of 2014, the company expects sales growth of approximately 12 to 13 percent, excluding the impact of foreign currency. Baxter expects earnings, before special items, of $1.18 to $1.22 per diluted share in the second quarter.

Baxter expects sales growth for full-year 2014 of 9 to 10 percent, before the impact of foreign exchange. Also for the full year, Baxter expects earnings, before special items, of $5.05 to $5.25 per diluted share and cash flows from operations of approximately $3.5 billion.

The second quarter 2014 earnings guidance excludes approximately $0.07 per diluted share of projected intangible asset amortization expense. The full year 2014 earnings guidance excludes $0.38 per diluted share of special items comprising $0.18 per diluted share of items recorded in the first quarter, and projected intangible asset amortization expense of $0.20 per diluted share for the remainder of the year. Reconciling for the inclusion of these items results in GAAP (Generally Accepted Accounting Principles) earnings of $1.11 to $1.15 per diluted share for the second quarter and $4.67 to $4.87 per diluted share for the full year 2014.

A webcast of Baxter's first 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 April 17, 2014. 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 6, 2014.

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 Baxter's financial results, business development activities, capital structure, R&D pipeline including plans regarding future clinical trials and regulatory filings, outlook for 2014 and the planned separation of Baxter's biopharmaceutical and medical products businesses. 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 of risks for new and existing products; future actions of regulatory bodies and other governmental authorities, including the FDA and foreign counterparts; product quality or patient safety concerns leading to product recalls, withdrawals, launch delays, litigation, or declining sales; U.S. healthcare reform and other global austerity measures; reimbursement and rebate policies of government agencies and private payers; product development risks; accurate identification of business development and R&D opportunities and realization of anticipated benefits, including the ability to successfully integrate the Gambro business and achieve anticipated efficiencies; timely submission and approval of regulatory filings; inventory reductions or fluctuations in buying patterns; 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, including foreign governments; foreign currency fluctuations and other risks identified in Baxter's most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on Baxter's website. Baxter does not undertake to update its forward-looking statements.
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Tags: hemophilia, immune disorders, infectious diseases, kidney disease, trauma, biopharmaceutical
Company Details:
 Contact:Deborah Spak 
 E-mail:deborah_spak -at- baxter -dot- com 
 Company:Baxter Healthcare Corp View Company Profile 
 Address:work1 Baxter Pkwy 
 Location:workDeerfield, IL 60015  United States 
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