Baxter Gets FDA Nod for Advate - TheStreet

Baxter Gets FDA Nod for Advate

The company's shares jump in after-hours trading on news that the blood-clotting treatment for hemophiliacs has been approved.
Publish date:

Updated from 6:20 p.m. EDT

The Food and Drug Administration late Friday afternoon approved a new blood-clotting treatment for hemophiliacs produced by

Baxter Healthcare

(BAX) - Get Report

, and the company's shares jumped in after-hours trading.

The bioengineered drug, called Advate, is the first one produced without using additives from human or animal blood in the manufacturing process. The drug has been approved by the FDA to prevent and control bleeding episodes or to prepare people with Hemophilia A for surgery.

Hemophilia A is an inherited disease in which the blood-clotting protein Factor VIII fails to work adequately, thus posing a risk for people with the disease. Several Factor VIII drugs are on the market; Advate is derived from genetically engineered Chinese hamster ovaries that have been altered to produce Factor VIII.

Hemophilia drugs can be derived from blood plasma or developed through genetic engineering, the FDA explained. In fact, the first genetically engineered Factor VIII drug was approved in 1992.

But until Advate, all of the gene-spliced drugs "were made with blood-derived additives or human or animal origin," the FDA said. "These additives were needed to keep the cells viable so they could make the Factor VIII protein."

The FDA's announcement came just as stock markets were closing. Shares of Baxter, based in Deerfield, Ill., closed at $28.25 in regular trading, up $1.30, or 4.8%. In after-hours trading, the stock was up to $30 a share by 5:50 p.m.

Baxter said Friday in a release that it expects to start shipping Advate to distributors in three to six weeks.

The company said that the development of Advate without any human or animal proteins in the manufacturing or purification process eliminates "the risk of infections caused by viruses that may be carried in these proteins."

Baxter said other bioengineered Factor VIII drugs "have the potential to carry disease-causing viruses and pathogens" such as HIV or West Nile virus. The FDA noted, however, that no genetically engineered Factor VIII drug has transmitted HIV, hepatitis B or hepatitis C since 1987.

Baxter said its drug meets guidelines set by the National Hemophilia Foundation's medical and scientific advisory council that "all efforts should be made to remove human albumin" from genetically engineered Factor VIII products. Albumin is a protein found in blood.

Advate had been closely watched and eagerly anticipated by Wall Street analysts. Publicity about a new product would be a welcome relief to a company whose latest headlines have included an announcement that the

Securities and Exchange Commission

was asking about a series of downward earnings projections by the company; a massive restructuring that includes dismissing 3,200 employees; and sharply lower second-quarter earnings caused primarily by restructuring charges.