Friday, October 16, 2009

2 reports offer insight into Baxter's opportunities in existing and new products

Baxter International recently held an investor conference, and we were impressed by the firm's opportunities in existing and potential product sets. And we’re not alone.

Here’s what Julie Stralow, a senior stock analyst covering health care companies for Morningstar, wrote about the Baxter presentation on September 29:

“After digging into these opportunities, we now think the firm's long-term profit prospects are higher than we had been expecting, and we're raising our fair value estimate.

“Baxter's team focused this conference primarily on its research and development efforts. In contrast to the BioScience segment's dominance during the past several years, management's growth expectations for the next five years are strikingly similar for each segment. In fact, it looks as if new product launches in the medication delivery and renal segments will be key catalysts to pump up Baxter's growth and margins in the intermediate term.

“In medication delivery, Hylenex for subcutaneous injections and new infusion pumps should start boosting growth in the next couple of years. In renal, the company's focus on home dialysis could pay off in 2011 and beyond with the expansion of peritoneal dialysis to more eligible patients and a new product launch in home hemodialysis. Both options would greatly improve convenience for end-stage renal patients eligible to receive treatment outside clinics, and expanded use of peritoneal dialysis could actually reduce costs for the overall health-care system substantially, making it a potential winner in health-care reform initiatives.

“Beyond 2014 though, we think Baxter's BioScience segment looks highly promising, and the firm's long-term pipeline may include game-changers in Alzheimer's disease and Type I diabetes.”

Click here to read more on the Morningstar website.

Then just a week later, the Chicago Tribune reported Baxter had unveiled its new Hylenex system that operates by allowing intravenous fluids to be administered under the skin instead of through more traditional intravenous therapy.

Healthcare professionals said traditional IV efforts involve finding a patient's vein, occasionally leading to multiple attempts due to vein size or patient factors.

"Hylenex exemplifies Baxter's ongoing commitment to innovation and introducing products that help to improve the treatment experience and overall standard of care – in this case for parents, patients and caregivers alike," Camille Farhat, general manager of Baxter pharmaceuticals and technologies, said of the company's new product.

The Tribune said Baxter International is hoping for as much as $200 million in annual sales initially for its Hylenex product.

Click here to see the launch branding for the Sub-Q product.

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