#5: Baxter Bioscience
Headcount 48,000
Year Established 1931
Pharma Revenues $5,640 1%
Total Revenues $12,843 2%
Net Income $1,420 -36%
R&D Budget $915 0%
Top-Selling Drugs
Drug |
Indication |
$ |
(+/- %) |
Recombinants |
$2,095 |
2% |
|
Antibody Therapy |
$1,354 |
-1% |
|
Plasma Proteins |
$1,368 |
2% |
|
Regenerative Medicine |
$527 | 19% |
Account for 95% of total biopharma sales, up from 93% in 2009.
PROFILE
Baxter’s BioScience business boasts several successful bleeding disorder therapies and regenerative medicines that posted year-on-year growth, albeit more modest than in years past. Revenue growth from 2005 to 2009 was 14%, 6%, 14%, and 10%, respectively. BioScience revenues, broken down by recombinant products, plasma proteins, regenerative medicines, and “other,” were up only slightly to $5.6 billion (+1%) in 2010. Recombinant sales were up 2%, driven by Hemophilia therapy Advate, a franchise that continues to grow globally. Plasma proteins accounted for $1.4 billion (+2%), aided by Feiba and Aralast, offset by lower revenues for plasma-derived factor VIII and albumin. Also, Baxter’s Gamagard liquid sales were impacted by market share loss and pricing actions. Although regenerative medicine revenues jumped 19% to $527 million, thanks to the acquisition of Actifuse from ApaTech early in 2010, lower vaccine sales in the company’s “other” bioscience segment (-19%), offset that jump.
Baxter met with several obstacles in 2010, among them, the impact of U.S. healthcare reform and market challenges associated with plasma proteins. The Patient Protection and Affordable Care Act, enacted in March 2010, encompasses mandated discounts through modification of Medicaid rebates, expansion of 340B Drug Pricing Program, and additional taxes beginning in 2011, essentially impacting the entire bioscience business.
Additionally, balancing supply and demand for plasma products is a tricky business, with too many opportunities to wind up with too much or too little product, creating pricing pressures on one side or loss of market share to competitors on the other. Pricing pressure for certain plasma products, as well as manufacturing cost inefficiencies and increased inventory reserves, all had an adverse affect on operating results this past year.
In brighter news, Preflucel was approved for seasonal flu in Austria and the Czech Republic, with plans to launch the vaccine in the EU in 2011 and FDA licensure also anticipated. The company also launched TachoSil and Glassia. Baxter introduced the emphysema maintenance therapy Glassia in the U.S. in 4Q10 and plans to pursue distribution licenses in the other countries for which it has obtained rights from Kamada Ltd.
Drugs progressing to Baxter’s content include its von Willebrand therapy for the most common inherited bleeding disorder, which is on the road for Phase III trials in 2011, a recombinant factor IX therapy for hemophilia B in various Phase I/III studies, and HyQ, an antibody replacement therapy for PID, expected to be filed in 2011. Recent R&D purchases padding the pipeline include the hemophilia-related assets of Archemix, namely ARC19499, a subcutaneously administered hemophilia therapy currently in a Phase I, complementing Baxter’s interest in non-IV hemophilia therapies. Baxter also recently acquired Prism Pharmaceuticals, gaining its antiarrhythmic agent Nexterone, the first and only ready-to-use premixed intravenous (IV) bag formulations, as well as vials and pre-filled syringes.
In the name of product differentiation, Baxter divested its U.S. generic injectables business to Hikma Pharma-ceuticals for approximately $112 million, in an effort to redirect resources to its enhanced packaging offerings and formulation technologies. Fortunately, Baxter’s sustainability provides for R&D initiatives aimed at obtaining more diversified products, whether through acquisition opportunities and/or capitalizing on alliances, we can expect action from this big biopharma. —KB
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