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Salving the sting of recent bad news, Baxter International Inc. on Friday won approval for its next-generation blood-clotting drug for hemophilia patients.
The Food and Drug Administration gave its OK to Baxter's Advate - the first genetically engineered blood clotting treatment made without any added animal or human proteins. Researchers who have studied the drug believe Advate is safer than its animal and human protein-based rivals in treating hemophilia patients vulnerable to blood-borne viruses like HIV or hepatitis.
"It's widely recognized by the hemophilia community that there is a need to provide patients with treatments that eliminate the risk for infection," said Dr. Michael Tarantino, associate professor of pediatrics at the University of Illinois and medical director of the Comprehensive Bleeding Disorder Center in Peoria.
"While treatment options to date have provided effective disease management, there has been an acknowledged, lingering concern about the potential for viral transmission with these therapies," Tarantino added.
But doctors and patients aren't alone in greeting the approval of Advate.
Wall Street analysts and investors see the drug as critical to turn around some of Baxter's recent problems. Advate will supplement Baxter's line, which includes the top-selling Recombinate, which uses animal proteins in its processing.
Shares of Baxter jumped nearly 5 percent, or $1.30, to $28.25 on Advate's approval, announced by the FDA shortly before the close of trading on the New York Stock Exchange. The stock flirted with $30 a share in after-hours trading.
It was the best news Baxter has received in some time.
Earlier this month, Baxter reported a 76 percent drop in second-quarter profits and announced plans to eliminate 3,200 jobs, or about 6 percent of its worldwide work force, amid weaker-than-expected sales of blood therapies.
Furthermore, Baxter said it was cooperating with a request from the Securities and Exchange Commission for information about the company's 2003 revenue and growth forecasts. Baxter has made three downward revisions to its forecasts during the past year, damaging the company's credibility with investors.
But analysts say the approval of Advate should help Baxter because the company plans to price the drug at a premium.
Sales could surpass $500 million next year some analysts say as the company works to convince customers the drug is an improvement over Baxter's Recombinate and other rival hemophilia clotting treatments made with either animal or human proteins.
"A lot of the success will depend on a lot of different factors," said Glenn Reicin, analyst with Morgan Stanley in New York. "You have a product that reduces the rate of infection. (But) a lot of doctors are not quick to switch products."
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(c) 2003, Chicago Tribune. Distributed by Knight Ridder/Tribune News Service.
