Shares of Baxter International Inc. (BAX) reached a lifetime high of $76.80 in mid-day trading on Jul 11. The company’s shares closed marginally lower at $76.59 on the same day, translating to a decent one-year return of 8.5%.
Since the beginning of this year, shares of this global healthcare company have been on the rise, posting an impressive year-to-date return of 12.3%, which is much higher than the S&P 500 return of 7.4%.
BAX has a market cap of $41.6 billion while average volume of shares traded over the last three months stands at approximately 2.6 million.
Catalysts for Growth
BAX witnessed a string of U.S. Food and Drug Administration (FDA) approvals for its new products in the first half of 2014. The company also executed several acquisitions which are anticipated to be potential growth drivers over the long term.
Last week, BAX completed the acquisition of AesRx, LLC, a privately-owned orphan drug producer in the U.S. Per the deal, BAX will acquire the development and commercialization rights of Aes-103 – AesRx’s novel drug used in the treatment for sickle cell disease (SCD). With the AesRx acquisition, BAX intends to address the highly unmet clinical needs of patients suffering from blood-related disorders.
In April this year, BAX revealed its plans to takeover NC-based gene therapy-mediated cures developer, Chatham Therapeutics, LLC. Extending its collaboration with Chatham Therapeutics since May 2012, BAX plans to gain a broader access to the former’s gene therapy platform, supporting the development and commercialization of hemophilia treatments.
In the same month, the FDA also approved BAX’s new reconstitution system for ADVATE (Antihemophilic Factor [Recombinant]), which was developed to reduce the number of steps in the reconstitution process for hemophilia A patients and caregivers. The clearance reflects strongly on the company’s ongoing efforts in developing innovative therapies to meet the evolving needs of the hemophilia community.
In May 2014, BAX’s next-generation SIGMA Spectrum Infusion Pump received 510(k) clearance from the FDA. Featuring a Master Drug Library and dose error reduction software, the advanced infusion pump from BAX supports data integration into a hospital's electronic medical record system and helps create continuous quality improvement reports.
Guidance
BAX released a promising guidance, both for the second quarter and full-year 2014. For the second quarter of 2014, the company expects revenues to grow between 12 and 13%, barring the impact of foreign currency. Meanwhile, BAX projects adjusted earnings in the range of $1.18 to $1.22 per share for the quarter. The current Zacks Consensus Estimate of $1.21 lies within the guided range.
For full-year 2014, BAX continues to anticipate revenue growth in the range of 9 to 10%, excluding the impact of foreign exchange. Also, the company expects adjusted earnings between $5.05 and $5.25 per share for 2014, reflecting year-over-year growth of 7.4 to 11.7%. The current Zacks Consensus Estimate for the same is pegged at $5.14.
Zacks Rank
Currently, BAX carries a Zacks Rank #4 (Sell). Better-ranked stocks in the medical products industry include Hospira Inc. (HSP), OraSure Technologies, Inc. (OSUR) and Wright Medical Group Inc. (WMGI). All these stocks sport a Zacks Rank #1 (Strong Buy).
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