DEERFIELD, Ill., October 15, 2009 – Baxter International
Inc. (NYSE:BAX) today reported solid financial results for the
third quarter of 2009, and provided its fourth quarter and updated
full-year 2009 financial outlook.
Net income grew 12 percent to $530 million from $472 million
reported in the third quarter of 2008. Earnings per diluted share
of $0.87 advanced 18 percent from $0.74 per diluted share reported
in the prior-year period. The third quarter results include
after-tax special charges totaling $69 million (or $0.11 per
diluted share) primarily for fixed asset write-offs related to the
discontinuation of the company’s SOLOMIX drug delivery system
in development, and planned retirement costs associated with the
SYNDEO PCA Syringe Pump. The company recorded after-tax special
charges in the third quarter of 2008 totaling $91 million (or $0.14
per diluted share).
On an adjusted basis, excluding special charges in both years,
Baxter’s net income of $599 million increased 6 percent in
the third quarter from $563 million reported in the third quarter
last year. Adjusted earnings per diluted share of
$0.98 increased 11 percent from $0.88 per diluted share reported in
the prior-year period, and compares favorably with the guidance the
company previously provided of
$0.95 to $0.97 per diluted share. This financial performance was
the result of continued margin expansion, expense leverage and
benefits derived from the company’s ongoing share repurchase
program.
Baxter’s global sales of $3.1 billion were flat compared
to the third quarter last year. Excluding the impact of foreign
currency, Baxter’s worldwide sales increased 6 percent. Sales
within the United States increased 5 percent to $1.3 billion in the
third quarter, while international sales declined 4 percent to $1.8
billion. Excluding the impact of foreign currency, Baxter’s
international sales grew 7 percent.
Medication Delivery sales of $1.2 billion increased 1 percent
(and excluding foreign currency increased 7 percent). Renal sales
of $576 million declined 3 percent (and excluding foreign currency
increased 4 percent). Contributing to these results was growth
across multiple product categories, including products used in
peritoneal dialysis (PD) treatment, intravenous therapies,
injectable drugs and anesthesia products.
BioScience revenues totaled $1.4 billion in the third quarter,
which represents a 2 percent increase over the prior-year period.
Excluding foreign currency, BioScience sales advanced 8 percent,
reflecting gains across several core franchises. Key drivers of
sales performance include continued growth of recombinant
therapies, including ADVATE [Antihemophilic Factor (Recombinant),
Plasma/Albumin-Free Method] for the treatment of hemophilia,
antibody therapies and several specialty plasma therapeutics, as
well as biosurgery products.
“We continue to leverage the benefits derived from our
diversified healthcare model to achieve solid financial
performance, despite a challenging global macro-economic
environment,” said Robert L. Parkinson, Jr., chairman and
chief executive officer. “G iven our strong financial
position, geographic presence, and the medically-necessary nature
of Baxter’s products, Baxter is well-positioned to capitalize
on opportunities across a broad array of therapeutic
areas.”
Nine-Month Results
For the first nine months of 2009, Baxter’s net income
totaled $1.6 billion, an increase of 13 percent. Earnings per
diluted share of $2.66 advanced 18 percent over $2.26 per diluted
share reported in the prior-year period. On an adjusted basis,
excluding special items from both years, Baxter’s net income
of $1.7 billion increased 8 percent over $1.6 billion reported for
the same period last year. Adjusted earnings per diluted share for
the nine-month period increased 12 percent to
$2.77 per diluted share, from $2.47 per diluted share reported in
2008.
Baxter’s global sales in the first nine months of the year
totaled $9.1 billion, and declined 1 percent from $9.2 billion
reported in the prior-year period. Excluding the impact of foreign
currency, sales growth for the first nine months of 2009 was 7
percent. Sales within the United States totaled
$3.9 billion, an increase of 6 percent over the same period last
year, while international sales declined 6 percent to
$5.2 billion. Excluding the impact of foreign currency,
Baxter’s international sales grew 8 percent.
Recent Highlights
Baxter has achieved a number of scientific and commercial
milestones over the last several months, including:
- The commercial launch of HYLENEX recombinant (hyaluronidase
human injection) in the United States for use in pediatric
rehydration. HYLENEX, an enzyme, allows fluids to be administered
under the skin (subcutaneously) rather than through a vein. This
allows for rapid treatment initiation and delivery of intravenous
(IV)-like fluid rates, which can help lead to successful
rehydration of children in a less invasive manner.
- Marketing authorization from the European Commission for
CELVAPAN H1N1 pandemic vaccine using Baxter’s Vero cell
technology. CELVAPAN H1N1 is the first cell culture-based and
non-adjuvanted pandemic influenza vaccine to receive marketing
authorization in the European Union.
- Completion of the seasonal influenza Phase III confirmatory
study in healthy adults in the United States. The company expects
final study results to be available by the end of this year, to
support filing for regulatory approval in the United States in the
first half of 2010.
- Initiation of a Phase III study evaluating the use of ARTISS
[Fibrin Sealant (Human)] in facial surgery in the United States.
Currently, ARTISS is the first and only slow-setting fibrin sealant
indicated for use in adhering skin grafts in adult and pediatric
burn patients. ARTISS was developed using Baxter’s proven
fibrin sealant technology platform and is the newest agent in the
company’s expanding biosurgery portfolio.
- Filing an Investigational Device Exemption (IDE) with the U.S.
Food and Drug Administration (FDA) to begin a clinical study to
collect safety and effectiveness data required for a 510(k)
application for a new home hemodialysis system.
- Completion of the acquisition of certain assets related to
Edwards Lifesciences Corporation’s hemofiltration product
line, also known as Continuous Renal Replacement Therapy (CRRT).
CRRT provides a method of continuous yet adjustable fluid removal
that can gradually remove excess fluid and waste products that
build up with the acute impairment of kidney function, and is
usually administered in an intensive care setting in the
hospital.
Fourth Quarter and Full-Year 2009 Outlook
Baxter also announced today its guidance for fourth quarter 2009
and updated its guidance for the full year.
For the fourth quarter of 2009, Baxter expects sales growth,
excluding the impact of foreign currency, of 6 to 8 percent. Based
on the company’s outlook for foreign exchange rates, the
company expects reported sales including the impact of foreign
currency to increase 8 to 10 percent over the prior-year period.
Baxter also expects to achieve earnings per diluted share of $1.02
to $1.04, before any special items, in the fourth quarter.
For the full year, Baxter expects sales growth, excluding the
impact of foreign currency, to increase 7 to 8 percent. Based on
the company’s outlook for foreign exchange rates, Baxter
expects reported sales growth to increase approximately
0 to 1 percent. In addition, the company expects earnings per
diluted share of $3.79 to $3.81, before any special items, and
continues to expect cash flow from operations to total more than
$2.6 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 15, 2009. 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 and outlook for 2009. 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 the FDA and foreign
counterparts, that could delay, limit or suspend product
development, manufacturing or sales or result in sanctions; product
quality or patient safety concerns leading to product recalls,
withdrawals, launch delays, litigation, or declining sales;
additional legislation or regulation which may affect pricing,
reimbursement and rebate policies of government agencies and
private payers or other elements of the company’s business;
production yields, regulatory clearances and customers’ final
purchase commitments with respect to the company’s pandemic
vaccine; product development risks; 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; 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; any impact of the
commercial and credit environment on Baxter and its customers;
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.
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