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Positive Data for Baxter's Advate

Zacks Equity Research

Baxter International (BAX) revealed encouraging results of two clinical studies on the Advate [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] at the 24th Annual Congress of the International Society on Thrombosis and Haemostasis (:ISTH) in Amsterdam, the Netherlands. Advate is meant for the avoidance or curtailment of bleeding in victims of hemophilia A.

A meta-analysis of post-authorization safety studies (:PASS) of the Advate demonstrated that the product lowers inhibitor rate and is safe and effective for use in routine clinical practices. The results were consistent with that of the trials conducted in controlled, interventional settings. The large post-marketing data included 1,200 patients from 15 countries.

Another integrated 10-year data from 12 interventional clinical studies showed that the offering is safe for children and adults with moderately severe or severe hemophilia A.

Our Take

Positive data from the two clinical trials should boost sales of Advate, which is a part of Baxter’s Recombitants product category under the BioScience segment. Revenues from the BioScience business grew 5% in the first quarter of 2013, partly led by higher demand for Advate.

Baxter is striving to grow its hemophilia business through the international expansion of its product line. Advate is approved in 58 countries across the globe, including the U.S., Canada, and several countries in the European Union. Recently, the product received regulatory approval in China for the control and prophylaxis of bleeding episodes in individuals with hemophilia A. We believe that Advate has a considerable scope to capture a significant market share in the world’s second largest economy.

In March, the company acquired the investigational hemophilia compound OBI-1 from Inspiration BioPharmaceuticals, Inc. and certain other OBI-1 related assets from Ipsen Pharma S.A.S. OBI-1 is a recombinant porcine factor VIII (rpFVIII) and is being investigated for the treatment of bleeding episodes in people with acquired hemophilia A and congenital hemophilia A patients with inhibitors.

Although we believe that the recent developments including a strong product line and several products in late stage clinical development are encouraging, we are concerned about the relative stagnation in sales, a difficult outlook for hospital spending and tightening of reimbursement.

The stock currently carries a Zacks Rank #3 (Hold). While we choose to remain on the sidelines for Baxter, medical device stocks worth a look are Wright Medical Group (WMGI), Edwards Lifesciences (EW) and Hanger (HGR). While WMGI carries a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2 (Buy).

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