Replies to post #86193 on Biotech Values

[DewDiligence]

TLCR:

They could be at a big risk when/if (in pivotal studies) the bax/halo one monthly injection formulation comes out. Talecris is working on their own injectable but it's once weekly, 4 injections and needs 40% more drug because of bioavailability issues. Given the cogs it seems like a non-starter to me.

TCLR’s insiders presumably agree—they unloaded $400M of stock concurrently with the IPO.

[DewDiligence]

BAX Reports 4Q09 Results

[BAX is a 5% holding in my SI charity portfolio. Although the company has been around for almost 80 years, I think it has some takeout vig. BAX has three operating divisions: BioScience, the largest division, consists of recombinant and plasma-derived drugs; Medication Delivery includes low-tech and high-tech devices used by hospitals; and Renal consists of devices for peritoneal dialysis and home hemodialysis. About 60% of BAX’s total sales are ex-US.]

http://www.reuters.com/article/idCNN2823986520100128

›18-Jan-2010 11:25am EST
By Debra Sherman

CHICAGO, Jan 28 (Reuters) - Medical products maker Baxter International Inc <BAX> reported higher quarterly earnings, matching analysts' forecasts, as each of its three business units posted double-digit sales growth.

Yet shares in Baxter slipped $1.18 to $57.73 in early trading after the company dashed Wall Street's hopes for a beat, sounded a slightly cautious tone on the conference call with analysts, and acknowledged that it lost some share in the market for plasma proteins last quarter.

In addition, during the conference call, the company disclosed a warning letter it had received from U.S. health regulators about its manufacturing facility in Belgium. In the letter, which will probably be made public in the next few days, the U.S. Food and Drug Administration identified improvements needed for the filling and finishing of Gammagard liquid, a drug used to treat immune deficiency. Chief Executive Robert Parkinson told analysts that there have been no adverse effects or complaints associated with the issues nor have there been interruptions in operations. "We're taking it seriously as we should. but I don't think it's anything to be alarmed about," Parkinson said.

The maker of intravenous drug pumps, blood therapy products and devices used for kidney dialysis also forecast first-quarter and full-year earnings that were within analysts' expectations, but the consensus was at the top end of that range.

"While some may be disappointed with this outlook, we would remind investors that Baxter is traditionally very conservative with its initial outlook, routinely under-promising and outperforming when it's all said and done. We don't expect 2010 to be any different," JP Morgan analyst Michael Weinstein wrote in a research report.

"This is classic Baxter guidance," added Piper Jaffray analyst Matt Miksic, noting that the top end of the forecasted range is the consensus on Wall Street. "That's typical."

In the fourth quarter, Baxter earned $572 million, or 94 per share, compared with $569 million, or 91 cents per share a year ago. Excluding items, it earned $1.03, matching the average estimate on Wall Street, according to Thomson Reuters I/B/E/S.

Total fourth-quarter sales rose to $3.5 billion from $3.1 billion in the year-ago period, with U.S. sales up 5 percent and sales outside the United States up 15 percent. Excluding the impact of foreign currency, international sales grew 7 percent.

In addition to strong sales growth, margin expansion and the company's ongoing share buyback program drove EPS growth.

For the first quarter of 2010, Baxter forecast sales growth, excluding the impact of foreign exchange, of 5 percent to 7 percent. Including the benefit of foreign exchange, the company expects to report sales growth of 10 percent to 12 percent year over year, based on current exchange rates.

Baxter forecast earnings per diluted share of 92 cents to 94 cents, before items.

For full-year 2010, Baxter expects sales, excluding the impact of foreign exchange, to increase 5 percent to 7 percent. Including the benefit of foreign exchange, Baxter sees sales growth of 7 percent to 9 percent over a year ago, assuming exchange rates stay the same.

The company forecast earnings per diluted share of $4.20 to $4.28, before special items, and expects to generate cash flow from operations of about $2.9 billion.

"While no company, including Baxter, is completely immune to the micro-environment, given the medically necessary nature of our products, our diversified healthcare model and strong market positions, we're confident in our ability to drive improved performance," Parkinson said.‹

[DewDiligence]

Talecris Shares Stumbles on Earnings Shortfall

[TLCR is the plasma-protein company CSL Behring tried to acquire, but the deal was nixed by the antitrust cops. TLCR IPO’d at $19/sh in Sep 2009, when insiders concurrently unloaded $400M of their own stock (#msg-42015380). The company sports an enterprise value of about $4B.]

http://finance.yahoo.com/news/Talecris-shares-stumble-after-apf-2307202087.html?x=0&.v=1

›Wednesday February 24, 2010, 1:41 pm EST

RESEARCH TRIANGLE PARK, N.C. (AP) -- Shares of Talecris Biotherapeutics Holdings Corp. fell in trading Wednesday, a day after the biotechnology company said an after-tax charge wiped out much of its fourth-quarter profit.

Talecris said it earned $1.4 million, or a penny per share, in the final quarter of 2009, down from $26.2 million, or 28 cents per share, in the last quarter of 2008.

Revenue fell 3 percent to $390 million.

The final three months of this year included a $26.3 million charge, or 21 cents per share, tied to debt refinancing transactions. Operating expenses also rose 11 percent to $95 million due mainly to $7.6 million in charitable donations and expenses related to a sales force expansion.

Based in Research Triangle Park, N.C., Talecris develops treatments for immune deficiencies and hemophilia, among other therapeutic areas.

For the full year, the company earned $153.9 million, or $1.50 per share, more than double the previous year's profit of $65.8 million.

Revenue for the year rose to $1.53 billion from $1.37 billion.

Talecris expects earnings per diluted share in the range of $1.42 to $1.50 for 2010, with revenue climbing to between $1.62 and $1.65 billion. Analysts expect earnings of $1.57 per share on $1.63 billion in revenue.‹

[DewDiligence]

It’s silly that HALO was +21% today on news that BAX acquired a totally unrelated private company.

http://www.reuters.com/article/idCNN0124789420100301

›Baxter to Buy Biologics Maker for Up To $330M

12:43pm EST

CHICAGO, March 1 (Reuters) - Baxter International Inc <BAX.N> said on Monday it would pay up to $330 million to acquire Britain-based ApaTech, a privately held maker of biologics products used in orthopedic and dental surgeries.

The agreement includes an upfront cash payment by Baxter of $240 million, plus potential payments of up to $90 million should the company achieve sales milestones. The transaction is expected to close in the first quarter.

ApaTech, with sales of about $60 million in 2009, makes Actifuse, a synthetic bone graft material sold in the United States and Europe.

Baxter said the transaction, intended to bolster its position in the fast-growing orthobiologics sector, is not expected to have a material impact on its 2010 financial results.

David Lewis, an analyst with Morgan Stanley, said he expects Baxter to supplement growth through more acquisitions rather than continuing to use cash to repurchase shares.

Shares of Halozyme Therapeutics Inc <HALO.O>, a biopharmaceutical company that is partners with Roche <ROG.VX> and Baxter on biologics products, jumped 14 percent as investors speculated Halozyme also could become a takeover target.

"People probably are thinking that because Baxter has acquired another company this morning, they may also acquire other companies that they have partnerships with," Wedbush Morgan Securities analyst Gregory Wade said.

ApaTech shareholders include Encore Ventures, Healthcor Partners and MTI. Encore Ventures, ApaTech's largest shareholder, is a division of European venture capital firm DFJ Esprit.‹