(Adds details, analyst comment; updates shares)
By Natalie Grover
July 17 Medical device and drug maker Baxter
International Inc reported higher-than-expected
quarterly adjusted earnings, driven primarily by a surge in
sales of the dialysis products it gained from its acquisition of
Gambro AB last year.
Baxter's outperformance was relatively broad, with both its
biotech and medical product divisions exceeding expectations.
Revenue from the biotech business, which includes
plasma-based proteins to treat hemophilia and other bleeding
disorders, jumped about 7 percent to $1.75 billion.
Sales in its hemophilia franchise, which includes Baxter's
flagship blood disorder therapy Advate, rose 6 percent, while
vaccine sales led the pack with a 12 percent increase.
The company's medical product business, which includes
intravenous fluid systems, dialysis, biosurgery and some
specialty pharmaceutical products, saw sales grow by about 24
percent to $2.51 billion.
The dialysis division, expanded by the acquisition of
Sweden's Gambro, posted particularly strong year-on-year growth
of 60 percent.
Baxter said in March that it planned to spin off its
biotechnology operations into a publicly traded company by the
middle of next year and focus on its core medical technology
The company also tightened its full-year adjusted profit
forecast on Thursday to $5.10-$5.20 per share from $5.05-$5.25,
leaving its midpoint unchanged.
Analysts said Baxter's reluctance to raise its full-year
forecast despite beating expectations this quarter stemmed from
impending generic competition for two of its high-margin drugs,
Suprane and Cyclophosphamide.
Baxter's stock was marginally down about 0.7 percent at
$77.10 on Thursday.
The company also raised the forecast for its hemophilia
franchise, despite the potential for competition from Biogen
Idec Inc's long-acting hemophilia A treatment Eloctate,
which the U.S. Food and Drug Administration approved in June.
Baxter is currently developing a long-acting version of
Advate, but Eloctate is slated to hit the markets sooner.
"We view the strong results and higher guidance in
hemophilia as a sign of increased confidence from management in
the company's ability to defend its leadership position in this
core franchise," Piper Jaffray analyst Matt Miksic said.
Baxter's net adjusted income rose to $692 million, or $1.26
per share in the second quarter ended June 30, from $659
million, or $1.20 per share, a year earlier.
Revenue rose about 16 percent to $4.26 billion.
Analysts on average had expected earnings of $1.22 per
share, excluding items, on revenue of $4.12 billion, according
to Thomson Reuters I/B/E/S.
Deerfield, Illinois-based Baxter's stock closed at $76.60 on
the New York Stock Exchange on Wednesday.
(Editing by Maju Samuel and Simon Jennings)