Baxter's Advate Continues to Impress - Analyst Blog

Baxter International (BAX) presented encouraging data from the Advate [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] prophylaxis study at the International Society on Thrombosis and Haemostasis (ISTH) in Amsterdam, the Netherlands. Advate is meant for the avoidance or curtailment of bleeding in victims of hemophilia A.

A post-hoc analysis has identified an interrelation between peak levels of factor VIII (FVIII) in a patient's body in the first few hours after infusion and the efficiency of prophylaxis treatment in patients with hemophilia A. The duration of the factor remaining active in the body will aid doctors determine the optimal dosage of the drug required to reduce bleeding.

Additional findings from a survey of 76 adults living with hemophilia and 86 parents of children with hemophilia in the U.S. revealed that patients prefer lower bleeding rate in comparison to lesser infusion per week.

Last week, the company had presented a meta-analysis of post-authorization safety studies (PASS) of the Advate at the ISTH, which demonstrated that the product lowers inhibitor rate and is safe and effective for use in routine clinical practices. The results were consistent with that of the trials conducted in controlled, interventional settings. Another integrated 10-year data from 12 interventional clinical studies showed that the offering is safe for children and adults with moderately severe or severe hemophilia A.

Our Take

Positive findings from the Advate clinical trials should boost sales of Advate, which is a part of Baxter's Recombitants product category under the BioScience segment. Revenues from the BioScience business grew 5% in the first quarter of 2013, partly led by higher demand for Advate.

Baxter is striving to grow its hemophilia business through the international expansion of its product line. According to the World Federation of Hemophilia, there are about 400,000 hemophilia patients in the world. Advate is approved! in 58 countries across the globe, including the U.S., Canada, and several countries in the European Union.

Recently, the product received regulatory approval in China for the control and prophylaxis of bleeding episodes in individuals with hemophilia A. We believe that Advate has considerable scope to capture significant market share in the world's second largest economy.

Although we believe that the recent developments including a strong product line and several products in late stage clinical development are encouraging, we are concerned about the relative stagnation in sales, a difficult outlook for hospital spending and tightening of reimbursement.

The stock currently carries a Zacks Rank #3 (Hold). While we choose to remain on the sidelines for Baxter, medical device stocks worth a look are Wright Medical Group (WMGI), Resmed (RMD) and Hanger (HGR). While WMGI and RMD carry a Zacks Rank #1 (Strong Buy), HGR carries a Zacks Rank #2 (Buy).