The Full Story:
Baxter sets Q3 charges, drops HemAssist product
DEERFIELD, Ill., Sept 16 (Reuters) - Baxter Healthcare
Corp. <BAX.N> said Wednesday it would take third quarter
charges of $178 million related to breast implant litigation
and $75 million to drop development of its blood substitute
product, HemAssist, which is derived from human hemoglobin.
The company also said it anticipates taking a third-quarter
charge against net earnings of about $40 million, primarily for
the write down of certain minority investments and the
dissolution of certain joint ventures.
The company said it has decided to focus its
research-and-development efforts in oxygen-carrying
therapeutics, or "blood substitutes," on its second-generation
program, which is based on genetically engineered hemoglobin
molecules.
Ending its development of HemAssist will force the company
to eliminate about 100 jobs worldwide. The company said it
would offer some of those employees jobs developing the second
generation program or in its other businesses.
Baxter halted its Phase III U.S. clinical trial of
HemaAssist in February because it noticed higher mortality
rates among patients using HemaAssist than those given a
placebo, prompting Baxter to determine the results to be
inconclusive, Baxter spokeswoman, Mary Thomas said.
She said The company halted the European clincal trial of
the product in June because of concerns about the drug's safety
and efficacy.
Baxter said in its statement that it will modify its
manufacturing facility in Neuchatel, Switzerland, which was
designed to manufacture a human hemoglobin product, to produce
other Baxter biopharmaceutical products.
While we're disappointed, delays are sometimes part of the
process of developing breakthrough medical therapies such as
oxygen-carrying therapeutics," said Harry Jansen Kraemer,
Baxter's president.
Kraemer described halting the development of HemAssist as
"a difficult decision," but said it wasn't clear whether its
market value would have outweighed development costs.
First call analysts' consensus put Baxter's earnings at
$0.61 per share for the third quarter.
((--Elizabeth Smith, New York newsroom, 212-859-1700))
(Reuters 10:11 AM ET 09/16/98) For the full text story, see
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