Baxter International Inc BAX
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/18/2013

Operator: Good morning, ladies and gentlemen, and welcome to Baxter International's First Quarter Earnings Conference Call. Your lines will remain in a listen-only mode until the question-and-answer segment of today's call. As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcast without Baxter's permission. If you have any objections, please disconnect at this time.

I would now like to turn the call over to Ms. Mary Kay Ladone, Corporate Vice President, Investor Relations at Baxter International. Ms. Ladone, you may begin.

Mary Kay Ladone - Corporate VP, IR: Thanks, Sean. Good morning, everyone and welcome to our Q1 2013 earnings conference call. Joining me today are Bob Parkinson, CEO and Chairman of Baxter International and Bob Hombach, Chief Financial Officer.

Before we get started, let me remind you that this presentation, including comments regarding our financial outlook, new product developments, and regulatory matters contain forward-looking statements that involve risks and uncertainties, and of course, our actual results could differ materially from our current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially.

In addition, in today's call, non-GAAP financial measures will be used to help investors understand Baxter's ongoing business performance. A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in our earnings release issued this morning and available on our website.

Now, I'd like to turn the call over to Bob Parkinson.

Robert L. Parkinson, Jr. - Chairman and CEO: Thanks, Mary Kay. Good morning, everybody. Thank you for calling in. As you saw in the press release that was issued earlier this morning, Baxter's first quarter financial results were in line with our expectations and we've also confirmed guidance for the full year for 2013. In the first quarter adjusted earnings per diluted share increased 4% to $1.05 per diluted share and worldwide sales increased 2%. Our financial outlook for the full year includes sales growth of approximately 10% which reflects the impact of the Gambro acquisition and adjusted earnings per diluted share of $4.60 to $4.70. Even in the face of a very challenging macro environment, Baxter continued to make investment to support geographic expansion initiatives and new product introductions, while advancing a number of programs and improve the quality of care and address key high potential areas of unmet medical need. A few recent achievements include the advancement of our home hemodialysis device VIVIA. As you know last year, we completed the first clinical trial in the U.S. evaluating the performance and safety of this new device and we've initiated a second in-center nocturnal hemodialysis trial in Canada. We remain on track to complete this trial in the second quarter, which will be used to support CE mark in Europe later this year.

Within our leading hemophilia franchise, we've achieved a number of milestones, including the initiation of a global Phase III clinical trial of BAX 817, a recombinant factor VIIa therapy for hemophilia a patients with inhibitors and we also announced results from a pivotal Phase III study evaluating routine prophylaxis of FEIBA compared to on-demand treatment in patients with hemophilia A or B and inhibitors. The presence of an inhibitor as you know makes response to treatment more challenging and patients with inhibitors have an increased risk of developing complications such as joint damage. Top line results from this study showed a 72.5% reduction in the median annual bleed rate with prophylaxis treatment. This Phase III study supported the filing of a biologics license application with the FDA during the first quarter. Earlier this week, Baxter was granted orphan drug designation for the prophylaxis syndication.

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