Baxter International Inc. (NYSE:BAX) today announced strong financial results for the first quarter of 2011, and raised its outlook for full-year 2011.
Baxter reported net income in the first quarter of $570 million and earnings per diluted share of $0.98, which exceed the company's previously-issued earnings guidance of $0.92 to $0.94 per diluted share. On an adjusted basis, excluding special items in the first quarter of 2010, Baxter's earnings per diluted share increased 5 percent from $0.93 per diluted share in the prior-year period. Baxter's financial results for the first quarter 2010 included after-tax special items totaling $627 million (or $1.04 per diluted share) related to the COLLEAGUE infusion pump and a change in the tax treatment of post-retirement prescription drug benefits.
Worldwide sales totaled $3.3 billion and increased 12 percent compared to sales of $2.9 billion in the first quarter of 2010, which included a revenue adjustment of $213 million associated with the COLLEAGUE infusion pump. Excluding the COLLEAGUE adjustment, Baxter's worldwide sales increased 5 percent over the prior year.
Excluding the impact of foreign currency as well as the COLLEAGUE adjustment, worldwide sales in the first quarter advanced 5 percent. Sales within the United States increased 10 percent to $1.4 billion, while international sales of $1.9 billion grew 1 percent.
By business, BioScience revenues totaled $1.4 billion and rose 3 percent (or 4 percent excluding the impact of foreign currency). Contributing to this performance was robust demand for GAMMAGARD LIQUID [Immune Globulin Intravenous (Human)] (marketed as KIOVIG outside of the United States), certain specialty plasma-based therapeutics, and biosurgery products.
Medical Products sales advanced 20 percent to $1.9 billion from $1.6 billion recorded in the prior year that included the COLLEAGUE adjustment referenced earlier. Excluding the adjustment and the impact of foreign currency, Medical Products sales increased 5 percent. This performance is primarily attributable to double-digit growth in the IV Therapies and Global Injectables product categories, driven by strong demand for intravenous (IV) and nutritional therapies, and a broad range of generic and pre-mixed injectable drugs. Medical Products also now includes Renal products.
"We continue to implement measures to improve our commercial, operational, and scientific effectiveness in response to an evolving and challenging environment," said Robert L. Parkinson, Jr., chairman and chief executive officer. "Baxter's strong financial position provides us the flexibility to invest in and pursue opportunities that expand our diverse product portfolio with innovative products that save and sustain patient lives and position our company for enhanced growth."
Baxter continues to expand its pipeline through investments in research and development as evidenced by a number of recent achievements:
- The launch of the first and only 30-gram dose vial for GAMMAGARD LIQUID (marketed as KIOVIG in Europe) in the United States. This new dosage form is the most frequently prescribed dose and is expected to enhance convenience for patients.
- The expanded approval throughout Europe of PREFLUCEL, a seasonal influenza vaccine, under the European repeat mutual recognition procedure (rMRP) by the Austrian Agency for Health and Food Safety. PREFLUCEL is manufactured using Vero cell technology, Baxter's proprietary technology platform, offering an innovative method of vaccine production compared to conventional embryonated chicken egg production. The 13 participating European Union countries will formally implement the license on a national level to make PREFLUCEL available for the 2011-12 influenza season.
- The launch of OLIMEL parenteral nutrition solution in Canada. OLIMEL, which is also available throughout Europe, is the country's first triple-chamber container for parenteral nutrition, providing adult patients with the essential ingredients of balanced nutrition -- protein, carbohydrates and lipids (fats) -- in a single container, simplifying the preparation of parenteral nutrition for hospitalized patients.
- The submission of a Biological License Application to the U.S. Food and Drug Administration (FDA) for TISSEEL [Fibrin Sealant (Human)] as a hemostatic agent in vascular surgery. TISSEEL is a fibrin sealant currently indicated for use as an adjunct to hemostasis in surgeries involving cardiopulmonary bypass and treatment of blunt or penetrating splenic injuries when control of bleeding by conventional surgical techniques and cautery is ineffective or impractical.
- The presentation of results of a phase III study evaluating the safety and efficacy of ARTISS [Fibrin Sealant (Human)] in 75 patients. ARTISS is a fibrin sealant currently indicated to adhere autologous skin grafts to surgically prepared wound beds, resulting from burns in adult and pediatric populations greater than or equal to one year of age. Baxter currently has an efficacy supplement application pending with the FDA for an indication extension for use in facelift surgery.
- The announcement of a definitive agreement to acquire privately-held Prism Pharmaceuticals, Inc., a specialty pharmaceutical company based in King of Prussia, PA. Prism Pharmaceuticals has developed and received FDA approval for multiple presentations of NEXTERONE® (amiodarone HCl), an antiarrhythmic agent, including the first and only ready-to-use premixed IV formulations, making this life-saving medication readily available in critical-care, time-sensitive circumstances.
Outlook for Second Quarter and Full-Year 2011
Baxter also announced today its guidance for the second quarter of 2011 and updated its guidance for the full year.
For full-year 2011, Baxter now expects to achieve sales growth, excluding the impact of foreign currency, of 3 to 4 percent, and earnings per diluted share, before special items, of $4.20 to $4.28 per diluted share. In addition, the company continues to expect cash flows from operations of approximately $2.8 billion. This guidance incorporates the impact of the previously-announced divestiture of the U.S. generic injectables business, now projected to close during the second quarter.
Baxter's previous guidance for full-year 2011 was sales growth, excluding the impact of foreign currency, of 2 to 3 percent, earnings per diluted share of $4.15 to $4.25, before any special items, and cash flows from operations of approximately $2.8 billion.
For the second quarter of 2011, the company expects sales growth, excluding the impact of foreign currency, of 4 to 5 percent, and earnings per diluted share of $1.01 to $1.03, before any special items.
Baxter International Inc.,