Headcount: 61,000
Revenues: $16,671 (+11%)
Bioscience Revenues:$6,699(+7%)
Net Income: $2,497 (+24%)
R&D: $1,421 (+22%)

TOP SELLING DRUGS 

Baxter Bioscience, which will become Baxalta following its separation from Baxter International in mid-2015, plans to continue its efforts in its core strategic areas of hematology and immunology. Each year these therapies see steady growth, and in 2014 hemophilia and biotherapeutic product sales were up 8% and 5%, respectively. Baxalta will have new headquarters in Bannockburn, IL and approximately $6 billion in global revenues to start.

In line with this strategic focus, Baxter divested its Vero cell vaccine platform and related assets, including its production facility in Bohumil, Czech Republic, to Nanotherapeutics. The sale included vaccines for H5N1, H1N1 and seasonal flu. Baxter also sold its commercial vaccines business and related manufacturing facilities to Pfizer for $635 million. This sale included NeisVac-C, to protect against group C meningitis, and FSME-IMMUN, which helps protect against tick-borne encephalitis (TBE).

With continued growth in 2014, and to support its new bioscience business, Baxter is establishing a new global innovation and R&D center in Cambridge, MA. In addition to its core areas, the R&D center will explore technology platforms such as gene therapy and biosimilars.

In August, Baxter opened its first advanced recombinant biologic facility in Singapore, and plans to expand with a new recombinant protein-processing suite, a venture that will create 450 biopharma jobs in Singapore this year. The current suite supports the processing of ADVATE, the company’s recombinant factor VIII (rFVIII) for the treatment of patients with hemophilia A. A second suite will initially process RIXUBIS, a recombinant factor IX (rFIX) protein for the treatment hemophilia B, and when operational, it will be the primary global commercial processing facility. It will also support production of the company’s investigational extended half-life recombinant FVIII treatment upon regulatory approval.

Further expanding its oncology assets, Baxter acquired Sigma-Tau’s Oncaspar portfolio for $900 million, gaining its leading biologic for acute lymphoblastic leukemia (ALL), along with the investigational calaspargase pegol, which is in development for the treatment of ALL with an increased shelf life that’s expected to reduce dosing frequency, along with an established oncology infrastructure with clinical and sales resources. The acquisition expands Baxter’s oncology portfolio, which has an estimated

$10 billion total market potential across current oncology indications.

Headcount: 61,000
Biopharma Revenues: $6,564 (5%)
Total Revenues: $15,259 (8%)
Net Income: $2,012 (-13%)
R&D Budget: $1,246 (8%)

TOP SELLING DRUGS 

Baxter’s BioScience business enjoys a relatively comfortable position for its products and therapies, and in 2013 revenues were up 5% to $6.6 billion, driven by its hemophilia and immunoglobulin therapy assets. Meanwhile, at the close of 1Q14, Baxter International, Inc. announced plans to separate its biopharma and medical products businesses, looking to benefit from the stand-alone companies in the areas of management, more effective commercialization, innovation, and pursuing investment strategies. As such, the BioScience business will now be run independently under Ludwig N. Hantson, Ph.D., who will take on the role of chief executive officer of the new, yet-to-be-named, biopharma company.

The BioScience business processes recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders; plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions, as well as biosurgery products and vaccines.

Among its leading therapies, Advate continues to be the most prescribed recombinant FVIII worldwide. Hemophilia franchise sales were up 6% to $3.4 billion, driven by the recombinant therapy, Advate, and the company’s plasma-based inhibitor bypass therapy, Feiba. Contributing to sales growth in 2013 were shipments to Brazil as part of Baxter’s partnership with Hemobrás.

Regulatory approvals of Advate in the emerging markets of Turkey and Russia, and the launch of Advate in China, further support YOY growth, along with FDA’s approval of BAXJECT III, a new reconstitution system for Advate.

The BioTherapeutics franchise had modest growth of 2% to $2.1 billion, attributed to immunoglobulin therapies and accelerated demand for Gammagard Liquid [Immune Globulin Intravenous (Human)], albumin, and Alpha-1 treatments. However, this growth was partially offset by lower international sales as a result of an exit from certain markets due to previous supply constraints.

BioSurgery sales were $717 million, up 7%, favorably impacted by Synovis, which Baxter acquired during 1Q12, and growth of surgical sealants Tisseel and Floseal, while the Vaccines franchise saw a jump of 15% to $292 million, with higher sales of FSME-IMMUN (a tick-borne encephalitis vaccine) and milestone payments from ongoing flu vaccine collaborations.

On the business front, Baxter acquired Chatham Therapeutics for $70 million upfront, gaining its gene therapy programs for the development of hemophilia treatments. The two companies have been collaborating since May 2012, evaluating Chatham’s Biological Nano Particle (BNP) platform for potential hemophilia B treatments, which resulted in BAX 335, currently in Phase I/II development. Baxter will also have access to the previously partnered hemophilia B (FIX) program, a preclinical hemophilia A (FVIII) program.

In the way of pipeline progress, the FDA required additional time (until July 2014) to review supplemental data that Baxter provided as part of the ongoing BLA for HyQvia. The therapy was approved in EU member states in 2013 and is currently available in Germany, Netherlands, Sweden, Norway, Denmark, Ireland and Italy. Also, the Phase III study of BAX 111, the first recombinant treatment in clinical development for von Willebrand disease, met its primary efficacy endpoint, achieving pre-specified success in the on-demand treatment of bleeding events.

On the other hand, Phase III data from the Gammaglobulin Alzheimer’s Partnership (GAP) study, did not meet its co-primary endpoints of reducing cognitive decline and preserving functional abilities in mild to moderate Alzheimer’s disease. While the study was not powered to demonstrate statistical significance among sub-groups within the study population, additional post-hoc and exploratory analyses of the data are ongoing.

Also, through an exclusive licensing agreement, Baxter and Cell Therapeutics, Inc. (CTI) will develop and commercialize pacritinib, an investigational JAK2/FLT3 inhibitor in Phase III development, with activity against genetic mutations linked to myelofibrosis, leukemia and certain solid tumors. Baxter paid $60 million upfront, which included a $30 million equity investment in CTI, and will pay as much as $112 million in milestones and royalties, if approved.

Further, making its foray into biosimilars, Baxter and Coherus Biosciences are collaborating to develop and commercialize a biosimilar to etanercept (Enbrel) for Europe, Canada, Brazil and other markets. For this candidate, Baxter paid $30 million upfront and will pay as much as $216 million based on development and regulatory milestones. The agreement also allows for development and commercialization of an alternative biosimilar to etanercept.

Starting out on its own should prove a successful venture, as the Bioscience business has all the building blocks for continued and steady growth, with expansion of its existing therapies, and progress with new ones.

Headcount: 50,800
Bio/Pharma Revenues: $6,237 (3%)
Total Revenues: $14,190 (2%)
Net Income: $2,326 (5%)
R&D Budget: $1,156 (22%)

Top Selling Drugs

Account for 96% of total biopharma sales, up from 95% in 2011

Baxter’s strategic vectors comprise its core portfolio, significant investment in R&D, as well as business development initiatives of expanding manufacturing operations, and public-private endeavors. With modest gains in 2012, Baxter BioScience revenues improved 3% (or 6% excluding the impact of foreign exchange) driven by Advate and Gammagard Liquid, as well as other plasma-based therapeutics including Feiba and albumin. The BioScience business comprises Recombinants (+1%), Antibody Therapies (+3%) and Plasma Proteins (+2%), with the biggest gains in Regenerative Medicine (+16%), boosted by the Synovis acquisition. The company also benefited from milestone payments from ongoing government collaborations on flu vaccine development. Emerging markets continue to represent Baxter’s greatest opportunity for growth, where approximately 20% of revenue now lies, and is expected to increase to 30% in the next five years.

In 2012 Baxter’s investment in R&D reached a new record of $1.2 billion, reflecting an increase of more than 20%. At the close of 2012, Baxter had 18 products in Phase III development, triple the number of Phase III programs since 2007. Pipeline progress consists of additional indications and formulations for Advate and Gammagard, along with the recent EU approval of HyQvia, human normal immunoglobulin (IGSC, 10%) and recombinant human hyaluronidase licensed from Halozyme Therapeutics, as replacement therapy for patients with primary and secondary immunodeficiencies.

Late stage developments include top-line results from a Phase III study of FEIBA NF [Anti-Inhibitor Coagulant Complex] which showed an impressive 72.5% reduced bleed rate in hemophilia when used as a prophylactic treatment, which formed the basis of the recently filed BLA. While results from a Phase III study of immunoglobulin (IG) missed its primary endpoints of reducing cognitive decline and preserving functional abilities in patients with mild to moderate Alzheimer’s disease. However, Baxter remains interested in pursuing IG among patients with moderate disease and those who carry a genetic risk factor for AD.

To supplement its internal R&D activities, Baxter has engaged in several portfolio and business expansion initiatives. In an effort to enhance its core product category, Baxter entered an exclusive agreement with Chatham Therapeutics to develop and commercialize potential treatments for hemophilia B using Chatham’s gene therapy technology. Additionally, Baxter acquired the investigational Phase III hemophilia compound OBI-1 and related assets from Inspiration BioPharmaceuticals, along with manufacturing operations, from Ipsen Pharma. Among other alliances, Baxter entered a European licensing agreement with Onconova Therapeutics for the targeted anti-cancer compound rigosertib, currently in late stage development for the treatment of rare hematologic malignancies and pancreatic cancer. Under this alliance, Baxter has commercialization rights in Europe, along with the option to develop rigosertib in additional indications. Baxter also began activities under its biosimilars collaboration with Momenta Pharmaceuticals, selecting three (of as many as six) biosimilars for diseases including cancer, autoimmune disorders and other chronic conditions.

Additionally, Baxter entered an exclusive 20-year partnership with Hemobrás to provide recombinant factor VIII (rFVIII) therapy for the treatment of hemophilia A in Brazil. For the next 10 years Baxter will be the exclusive provider of rFVIII while the companies work on the technology transfer for local manufacturing, after which, Baxter will receive royalties.

Baxter continues to expand manufacturing capacity for anticipated growth of Gammagard Liquid and albumin products and in August 2012 began construction of a new plasma fractionation facility in Covington, GA. Production is scheduled to begin in 2018. Additionally, Baxter entered a 10-year manufacturing services agreement with Sanquin Blood Supply Foundation in the Netherlands that will provide Baxter up to 1.6 million liters of incremental plasma fractionation capacity annually to support plasma-derived treatments.

Some high-potential new products and line extensions should provide slow and steady growth, which Baxter has become accustomed. We’ll see if record R&D expenditures create some near term ROI.

Headcount: 48,500 (Total company)
Biopharma Revenues: $5,308 (+14%0
Total Revenues: $12,348 (+10%)
Net Income: $2,014 (+18%)
R&D Budget: $868 (+14%)

Account for 91% of total biopharma sales, up from 87% in 2007.

PROFILE

Baxter’s Bioscience division performed well in 2008, achieving 14% revenue growth and an equally impressive 18% rise in income. The division includes hemophilia, immunoglobulin, critical care and pulmonology therapies, as well as regenerative medicines and vaccines. Advate, the company’s recombinant factor VIII therapy for hemophilia, was the primary growth driver, with sales topping $1.5 billion (+25%).

Playing an increasingly important role in vaccines, Baxter recently completed testing of the A/H1N1 (swine flu) virus and is now in full-scale production of a commercial vaccine using its rapid Vero cell culture technology. Baxter received an A/H1N1 strain from the U.S. CDC in May and is working to deliver a pandemic vaccine for use as early as July. Once stockpiling begins, Baxter stands to rival vaccine giants GSK and Sanofi-Aventis. In other pandemic news, the EMEA issued a positive opinion for Celvapan, the first cell culture-based H5N1 (avian flu) vaccine.

The company is also looking to make advancements with its Gammagard Liquid (Immune Globulin Intravenous or IGIV), and initiated two additional Phase III trials studying the antibody replacement therapy in Alzheimer’s disease (AD) and multifocal motor neuropathy (MMN). In AD, the antibodies are directed against beta amyloid proteins, which are theorized to build up on the brain and disrupt nerve function. The hope is that the antibodies in IGIV can help protect the brain from the toxic effects of beta amyloids. Additionally, Baxter initiated a Phase III trial of IGIV 10% using Halozyme Therapeutics’ Enhanze Technology for the treatment of primary immunodeficiency (PID) via injection at a single site, which would allow for a full monthly dose in a single injection.

In the company’s hemophilia franchise, dosing began in a Phase I trial of recombinant therapy for von Willebrand Disease, an inherited bleeding disorder. The company also initiated several preclinical programs to develop recombinant factor IX proteins to treat hemophilia, as well as longer acting versions of factor VIII.

Baxter Bioscience came out of the gate strong in 1Q09, with sales up 3% and plasma-protein sales up 5%, easing recent concerns about too much supply and falling prices. The company has withstood the economic strains of late — in part, due to the critical nature of the diseases its products treat — and is in line to continue to do so.—KB

Headcount:  48,000
Pharma Revenues: $5,640 (1%)
Total Revenues: $12,843 (2%)
Net Income: $1,420 (-36%)
R&D Budget: $915 (0%)

Top-Selling Drugs

Account for 95% of total biopharma sales, up from 93% in 2009.

PROFILE

Baxter’s BioScience business boasts several successful bleeding disorder therapies and regenerative medicines that posted year-on-year growth, albeit more modest than in years past. Revenue growth from 2005 to 2009 was 14%, 6%, 14%, and 10%, respectively. BioScience revenues, broken down by recombinant products, plasma proteins, regenerative medicines, and “other,” were up only slightly to $5.6 billion (+1%) in 2010. Recombinant sales were up 2%, driven by Hemophilia therapy Advate, a franchise that continues to grow globally. Plasma proteins accounted for $1.4 billion (+2%), aided by Feiba and Aralast, offset by lower revenues for plasma-derived factor VIII and albumin. Also, Baxter’s Gamagard liquid sales were impacted by market share loss and pricing actions. Although regenerative medicine revenues jumped 19% to $527 million, thanks to the acquisition of Actifuse from ApaTech early in 2010, lower vaccine sales in the company’s “other” bioscience segment (-19%), offset that jump.

Baxter met with several obstacles in 2010, among them, the impact of U.S. healthcare reform and market challenges associated with plasma proteins. The Patient Protection and Affordable Care Act, enacted in March 2010, encompasses mandated discounts through modification of Medicaid rebates, expansion of 340B Drug Pricing Program, and additional taxes beginning in 2011, essentially impacting the entire bioscience business.

Additionally, balancing supply and demand for plasma products is a tricky business, with too many opportunities to wind up with too much or too little product, creating pricing pressures on one side or loss of market share to competitors on the other. Pricing pressure for certain plasma products, as well as manufacturing cost inefficiencies and increased inventory reserves, all had an adverse affect on operating results this past year.

In brighter news, Preflucel was approved for seasonal flu in Austria and the Czech Republic, with plans to launch the vaccine in the EU in 2011 and FDA licensure also anticipated. The company also launched TachoSil and Glassia. Baxter introduced the emphysema maintenance therapy Glassia in the U.S. in 4Q10 and plans to pursue distribution licenses in the other countries for which it has obtained rights from Kamada Ltd.

Drugs progressing to Baxter’s content include its von Willebrand therapy for the most common inherited bleeding disorder, which is on the road for Phase III trials in 2011, a recombinant factor IX therapy for hemophilia B in various Phase I/III studies, and HyQ, an antibody replacement therapy for PID, expected to be filed in 2011. Recent R&D purchases padding the pipeline include the hemophilia-related assets of Archemix, namely ARC19499, a subcutaneously administered hemophilia therapy currently in a Phase I, complementing Baxter’s interest in non-IV hemophilia therapies. Baxter also recently acquired Prism Pharmaceuticals, gaining its antiarrhythmic agent Nexterone, the first and only ready-to-use premixed intravenous (IV) bag formulations, as well as vials and pre-filled syringes.

In the name of product differentiation, Baxter divested its U.S. generic injectables business to Hikma Pharma-ceuticals for approximately $112 million, in an effort to redirect resources to its enhanced packaging offerings and formulation technologies. Fortunately, Baxter’s sustainability provides for R&D initiatives aimed at obtaining more diversified products, whether through acquisition opportunities and/or capitalizing on alliances, we can expect action from this big biopharma. —KB

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Headcount: 49,700(Total company)
Bio/pharma Revenues: $5,573 (+5%)
Total Revenues: $12,562 (+2%)
Net Income: $2,205 (+9%)
R&D Budget: $917 (+6%)

Account for 93% of total bio/pharma sales, up from 91% in 2008.

PROFILE

In Baxter’s 2009 annual report, the company states that R&D is its most important strategic priority. Baxter upped its global R&D spend by 6% to $917 million, and at the end of 2009, claims to have advanced 14 Phase III trials and several early-stage programs for treatments for Alzheimer’s disease, hemophilia, end-stage renal disease, immune deficiencies, as well as pandemic and seasonal flu. Having been unable to uncover the details surrounding all of these projects, we’ll just have to trust this assessment.

Baxter’s BioScience revenues were up 5% to $5.6 billion in 2009 aided by increased sales of hemophilia treatment Advate; Feiba (an anti-inhibitor coagulant complex); plasma-derived factor VIII; and increased demand for albumin, Aralast (alpha 1-proteinase inhibitor), and Gammagard Liquid therapy. Recombinants accounted for $2.1 billion (+5%). Plasma Proteins brought in $1.3 billion (+10%), Antibody Therapy revenues were $1.4 billion (+12%), and Regenerative Medicine revenues were $442 million (+8%). On the down side, “other” sales in the Bioscience division, which includes vaccines, were down 26% to $367 million.

Although Baxter’s Celvapan H1N1 pandemic vaccine was granted marketing authorization from the European Commission in October 2009, a reduction in pandemic flu vaccine advance purchase agreements (APAs) adversely impacted vaccine sales. Back in June 2009, Baxter advanced to full-scale production of the vaccine and was working with the U.S. CDC and World Health Organization (WHO) to deliver a pandemic vaccine for use in July. At the time, WHO had raised the pandemic alert level to phase 6, indicating a global pandemic involving the H1N1 strain. Fortunately for us, the pandemic fizzled out in the fall. Let’s hope swine flu doesn’t rear its ugly head this flu season, but if it does, Baxter will have to share the H1N1 vaccine market with CSL, MedImmune, Novartis, and Sanofi Pasteur.

In other pipeline news, studies with Gammagard in Alzheimer’s disease (AD) continue to progress. Baxter achieved promising results from a Phase II study in patients with mild-to-moderate AD, showing improved function and cognition and slower decline compared to placebo. The company is currently conducting two Phase III trials to confirm these results in more patients. Also, Baxter and Nycomed gained FDA approval of TachoSil, an adjunctive hemostatic agent that combines a collagen patch with a coating of human coagulation factors. Baxter holds exclusive rights to market and distribute TachoSil in the U.S. and plans to launch it during 2Q10.

In line with its R&D objectives, Baxter recently acquired ApaTech, a U.K.-based orthobiologic products company, for approximately $330 million, providing the company immediate entrance into the emerging bone fusion category. With the acquisition, Baxter gains Actifuse, a calcium phosphate synthetic bone graft material currently marketed in the U.S., EU, and other global markets, along with manufacturing and R&D facilities in the UK, U.S. and Germany.

Compared to 2008 results, growth in the company’s BioScience division has slowed a bit and lack of visibility into Baxter’s pipeline makes it difficult to craft any bold predictions about the company’s future. If we assume market conditions in 2009 afflicted Baxter’s full growth potential, as it did for many other biopharmas, the company is in overall good health. —KB

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Headcount: 46,500 (Total company)
Biopharma Revenues: $4,649 (+6%)
Total Revenues: $11,263 (+9%)
Net Income: $1,707 (+22%)
R&D Budget: $760 (+24%)

Account for 87% of total biopharma sales, up from 79% in 2006.

PROFILE

Baxter BioScience is another beneficiary of my revised Biopharma definition. BioScience is the biggest of Baxter’s three units (the others are Medication Delivery and Renal) and, even though a piece of the BioSciences business comes from hemostatic products rather than strict pharmaceuticals, it’s my list and I’ll cry if I want to. And before you ask, Heparin is marketed by another division (Medication Delivery), so I’m not covering that product and its manufacturing issues in this profile.

Unfortunately, Baxter doesn’t break out BioScience sales by product, instead opting for product categories. The company did point out that Advate, an antihemophilic factor, brought in more than $1.2 billion of sales for the Recombinant line, which had $1.7 billion in total 2007 sales. Baxter is also working with Nektar Therapeutics to develop a long-acting version of its recombinant factor IX, for treatment of hemophilia B.

At this point, vaccines are part of “Other” category revenues, but they could become a major contributor in the next few years. Baxter is working with DynPort Vaccine Co. on Phase III trials for a pair of pandemic flu vaccines, which could bring big government money. Baxter has signed several advance-purchase and stockpiling agreements for an H5N1 vaccine, which it can manufacture with a cell-based technology that whips existing egg-based production times. The company first entered the vaccine field with its purchase of Immuno International in 1997.

The company is working with Halozyme to develop a subcutanaeous delivery route for Gammagard Liquid Immune Globulin, which is currently delivered only by IV infusion. Gammagard is an antibody-replacement therapy to treat immune deficiencies.

Interestingly, Baxter is pursuing a Phase III trial of Gammagard as a treatment for mild-to-moderate Alzheimer’s disease, based on small studies that showed significant improvement in cognitive function. Six-month Phase II results released in April 2008 showed changes in beta- and alpha-amyloid antibody levels in patients’ blood and cerebrospinal fluid. The Phase III trial is co-sponsored by the National Institutes of Health and will tie in 35 U.S. academic centers.

For a new addition to our biopharma ranks with some strongly established lines, Baxter actually has some interesting R&D going on.

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