Baxter Reports First Quarter 2016 Results and Provides Updated Financial Outlook for Full-Year 2016

On April 26, 2016 Baxter International Inc. (NYSE:BAX) reported results for the first quarter of 2016, and also increased its earnings per share outlook for full-year 2016 (Press release, Baxter International, APR 26, 2016, View Source [SID:1234511410]). First quarter worldwide sales totaled $2.4 billion, an increase of 4 percent on a constant currency basis as compared to the prior year period. On a reported basis, sales declined 1 point as foreign exchange negatively impacted sales by five percentage points in the quarter.

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"We are off to a strong start in 2016, with first quarter results exceeding our expectations," said José (Joe) E. Almeida, chairman and chief executive officer. "Our new strategic framework focused on portfolio optimization, operational excellence and capital allocation is driving improved performance throughout the organization and is reflected in our increased financial outlook for the year. We are confident our strategy positions the company for sustainable growth and value creation for all our stakeholders."

During the quarter, Baxter achieved a number of operational, pipeline and commercial milestones in support of its strategy to accelerate profitable growth, including:

U.S. launch of ready-to-use VANCOMYCIN injection in 0.9% Sodium Chloride (Normal Saline) in 500 mg, 750 mg and 1 gram presentations. Baxter is the only manufacturer to offer VANCOMYCIN in a premixed presentation, which uses the company’s proprietary frozen GALAXY container technology. With this launch, Baxter now supplies VANCOMYCIN in both saline and dextrose presentations, providing additional therapy options for a critical antibiotic that has appeared periodically on the FDA Drug Shortage list. In addition, Baxter has now submitted to the FDA for review the third of the nine molecules expected to launch over the next several years.
CE marking for the expanded indication of HEMOPATCH in the European Union for tissue sealing and dura replacement in addition to hemostasis. The advanced surgical patch now has one of the broadest indications available for advanced surgical patches in Europe.
Japanese approval for the expanded use of our flowable hemostat FLOSEAL to include endoscopic surgery.
Marketing authorization in United Kingdom and Denmark, the initial of 20 country approvals sought in 2016 for NUMETA G13E, the only triple-chamber, commercially prepared parenteral nutrition system approved to meet the critical needs of vulnerable neonatal patients.
Enrollment of the first patient in the U.S. clinical trial for VIVIA, an investigational home hemodialysis (HD) system. The trial is designed to study more frequent, extended duration nocturnal home HD therapy (High Dose HD).
Retirement of approximately $3.7 billion of gross debt through utilization of a portion of the retained stake in Baxalta Incorporated (Baxalta) through two debt-for-equity exchanges. At the end of the quarter, Baxter held approximately 30.5 million Baxalta shares and currently intends to utilize this remaining equity through a contribution to its U.S. qualified pension plan and an equity-for-equity exchange. While subject to regulatory approval, both of these transactions are currently expected to be completed during the second quarter.
Financial Results

During the quarter, Baxter reported income from continuing operations of $3.4 billion, or $6.13 per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis. These results included an after-tax net gain of approximately $3.3 billion from the disposition of shares the company retained following the spin-off of Baxalta in July 2015. Partially offsetting these results were net after-tax special items totaling $109 million (or $0.20 per diluted share) primarily related to debt extinguishment, intangible asset amortization, Baxalta related spin-off costs and certain business optimization initiatives.

On an adjusted basis, excluding special items, Baxter’s first quarter income from continuing operations totaled $199 million, or $0.36 per diluted share, exceeding the company’s previously-issued guidance of $0.28 to $0.30 per diluted share.

Sales within the United States advanced 5 percent to $992 million, while international sales totaled $1.4 billion, representing a 4 percent increase on a constant currency basis, and a 5 percent decline on a reported basis. There was no impact on Baxter’s total sales growth in the quarter from U.S. cyclophosphamide.

By business, Hospital Products sales of $1.5 billion increased 4 percent on a constant currency basis and declined 1 percent on a reported basis. Hospital Products performance in the quarter benefited from strong sales of Baxter’s next-generation SIGMA SPECTRUM infusion pump and IV solutions in the United States as well as increased demand for the company’s injectable drug compounding services.

Baxter’s Renal Products sales totaled $898 million, representing a 5 percent increase on a constant currency basis, and a 2 percent decline on a reported basis. Increased demand for peritoneal dialysis products and continuous renal replacement therapies contributed to sales growth in the quarter.

Financial Outlook

Based on the company’s strong first quarter performance, Baxter is raising its financial outlook for full-year 2016. Baxter now expects constant currency sales growth for full-year 2016 of approximately 3 percent, or approximately 4 percent after adjusting for increased U.S. competition for cyclophosphamide. On a reported basis, including the impact of foreign exchange, Baxter now expects sales to increase approximately 1 percent as compared to previous guidance of a decline of approximately 1 percent. In addition, the company now expects earnings from continuing operations, before special items, of $1.59 to $1.67 per diluted share for the full year as compared to previous guidance of $1.46 to $1.54 per diluted share.

For the second quarter, the company expects constant currency sales growth of approximately 4 percent, and on a reported basis, sales growth of approximately 2 percent. Baxter expects earnings from continuing operations, before special items, of $0.38 to $0.40 per diluted share for the second quarter of 2016.

The earnings guidance for the second quarter and full-year 2016 excludes approximately $1.94 and $8.01, respectively, per diluted share of realized gains related to the planned use of the Baxalta retained stake; $0.05 and $0.21, respectively, per diluted share of intangible asset amortization expense; an estimated $0.08 to $0.09 and $0.30 to $0.34, respectively, per diluted share related to business optimization and Baxalta separation-related expense activities; and $0.11 per diluted share of debt extinguishment loss and product related reserve adjustments for full-year 2016. These estimates are based on information reasonably available at the time of this release and future events or new information may result in different actual results. Reconciling for the inclusion of these items results in GAAP earnings of $2.18 to $2.21 per share for the second quarter of 2016 and $8.94 to $9.06 per diluted share for full-year 2016.

Midbrain dopamine neurons in Parkinson’s disease exhibit a dysregulated miRNA and target-gene network.

The degeneration of substantia nigra (SN) dopamine (DA) neurons in sporadic Parkinson׳s disease (PD) is characterized by disturbed gene expression networks. Micro(mi)RNAs are post-transcriptional regulators of gene expression and we recently provided evidence that these molecules may play a functional role in the pathogenesis of PD. Here, we document a comprehensive analysis of miRNAs in SN DA neurons and PD, including sex differences. Our data show that miRNAs are dysregulated in disease-affected neurons and differentially expressed between male and female samples with a trend of more up-regulated miRNAs in males and more down-regulated miRNAs in females. Unbiased Ingenuity Pathway Analysis (IPA) revealed a network of miRNA/target-gene associations that is consistent with dysfunctional gene and signaling pathways in PD pathology. Our study provides evidence for a general association of miRNAs with the cellular function and identity of SN DA neurons, and with deregulated gene expression networks and signaling pathways related to PD pathogenesis that may be sex-specific.
Copyright © 2015 Elsevier B.V. All rights reserved.

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Thromboelastometric Monitoring of the Hemostatic Effect of Platelet Concentrates Transfusion in Thrombocytopenic Children Undergoing Chemotherapy.

Prophylactic platelet concentrates transfusion represents a therapeutic choice in patients with chemotherapy-induced thrombocytopenia. This prospective, non-interventional study evaluated the effects of platelet concentrates transfusion on thromboelastometric parameters of platelet function in 36 transfusion occasions for 11 thrombocytopenic children undergoing chemotherapy. Pre- and posttransfusion (1-2 hours) blood samples were analyzed using standard coagulation tests and thromboelastometry (ROTEM) measurements (EXTEM and FIBTEM tests). Platelet component of the clot was calculated based on the EXTEM and FIBTEM maximum clot elasticity (MCE) results. After transfusion, mean platelet count increased from 16.5 × 10(9)/L to 43.0 × 10(9)/L (P < .001) and platelet component increased from 34.1 to 73.0 (P < .001). Statistically significant increases for posttransfusion EXTEM parameters A10, A20, and maximum clot firmness (MCF) were observed compared to pretransfusion values (P < .001). The EXTEM α-angle values increased posttransfusion (P < .05). The FIBTEM measurements were comparable pre- and posttransfusion. The study showed that platelet concentrates transfusion in thrombocytopenic children undergoing chemotherapy improves platelet-related coagulation pattern.
© The Author(s) 2014.

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Conditioned Media from Human Umbilical Cord Blood-Derived Mesenchymal Stem Cells Inhibits Melanogenesis by Promoting Proteasomal Degradation of MITF.

Human umbilical cord blood-derived mesenchymal stem cells (hUCB-MSCs) secrete various beneficial molecules, which have anti-apoptotic activity and cell proliferation. However, the effect of hUCB-MSCs in melanogenesis is largely unclear. In this study, we show that conditioned media (CM) derived from hUCB-MSCs inhibit melanogenesis by regulating microphthalmia-associated transcription factor (MITF) expression via the ERK signalling pathway. Treatment of hUCB-MSC-CM strongly inhibited the alpha-melanocyte stimulating hormone-induced hyperpigmentation in melanoma cells as well as melanocytes. Treatment of hUCB-MSC-CM induced ERK1/2 activation in melanocytes. In addition, inhibition of ERK1/2 suppressed the anti-pigmentation activity of the hUCB-MSC-CM in melanocytes and in vitro artificial skin models. We also found that the expression of MITF was appreciably diminished while expression of phosphorylated MITF, which leads to its proteasomal degradation, was increased in cells treated with hUCB-MSC-CM. These results suggested that hUCB-MSC-CM significantly suppresses melanin synthesis via MITF degradation by the ERK pathway activation.

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17β-Hydroxysteroid Dehydrogenase Type 2 Inhibition: Discovery of Selective and Metabolically Stable Compounds Inhibiting Both the Human Enzyme and Its Murine Ortholog.

Design and synthesis of a new class of inhibitors for the treatment of osteoporosis and its comparative h17β-HSD2 and m17β-HSD2 SAR study are described. 17a is the first compound to show strong inhibition of both h17β-HSD2 and m17β-HSD2, intracellular activity, metabolic stability, selectivity toward h17β-HSD1, m17β-HSD1 and estrogen receptors α and β as well as appropriate physicochemical properties for oral bioavailability. These properties make it eligible for pre-clinical animal studies, prior to human studies.

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