(Adds details, analyst comment; updates shares)
By Natalie Grover
July 17 (Reuters) - 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 business.
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)