Baxter sees multiyear opportunity in H1N1 vaccines
* Expects $30 mln-$40 mln of H1N1 vaccine revs in Q4
* Sees H1N1 vaccine business as multiyear opportunity
CHICAGO, Oct 15 (Reuters) - Baxter International Inc(BAX.N), best known for its drug pumps and products for blood disorders and kidney disease, said it sees a lucrative new revenue source in vaccines and a multiyear opportunity in H1N1 swine flu vaccines.
The hospital products maker said it expects to recognize $30 million to $40 million of revenue from H1N1 vaccines in the fourth quarter. It began shipping the product in August.
"We increasingly believe this has the potential to translate into a significant longer-term opportunity for the company," Baxter Chief Executive Robert Parkinson said on a conference call on Thursday.
He declined to speculate on sales beyond the fourth quarter, noting that sales will depend upon many factors, including further improvements in vaccine yields, final dosing regimens and the how bad this flu strain turns out to be.
Baxter has regulatory approval for a two-dose vaccine, but not a single dose.
"I think it is fair to say there probably is some increased optimism," Parkinson said of the company's cell culture-based vaccine program -- an alternative to vaccines traditionally produced using chicken eggs.
He said there was some question within Baxter about whether the swine flu pandemic represented a one-time opportunity or a sustainable business.
"I think we are increasingly feeling that this is a sustainable business opportunity," he said.
He noted that the World Health Organization recently said it believed that "this is something that governments, in fact the world, are going to have to continue to live with."
Sanofi-Aventis (SASY.PA) , the MedImmune unit of AstraZeneca (AZN.L), GlaxoSmithKline (GSK.L) and Novartis (NOVN.VX) also produce H1N1 vaccines.
Other flu treatments are expected to bolster the bottom line of drugmakers, as well.
Roche (ROG.VX) on Thursday reported stronger-than-expected third-quarter sales of its antiviral drug Tamiflu and raised its sales forecast on the medicine for the full year.
The robust Tamiflu sales reported by Roche also signal a small windfall ahead for Gilead Sciences Inc (GILD.O), which collects a healthy royalty on sales of the medicine.
Robert W Baird analyst Thomas Russo forecast in a research note that Tamiflu sales would add 8 cents a share to Gilead's fourth-quarter earnings and another 6 cents per share to its first-quarter 2010 results.
More significantly, Russo said Roche commentary suggests that "a higher level of sales maybe sustainable over the intermediate term at least," a longer period than investors are generally accustomed to.
He noted that several governments that stockpile Tamiflu as a hedge against pandemic flu outbreaks are now looking to reorder the drug as some of their current inventories approach a seven-year expiration date. (Additional reporting by Bill Berkrot in New York; Editing by Steve Orlofsky)
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