On July 30, 2015 Amgen (NASDAQ:AMGN) reported financial results for the second quarter of 2015 (Press release, Amgen, JUL 30, 2015, View Source;p=RssLanding&cat=news&id=2073172 [SID:1234506769]). Key results include:

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Total revenues increased 4 percent versus the second quarter of 2014 to $5,370 million, with 6 percent product sales growth driven primarily by Enbrel (etanercept), Prolia (denosumab), Sensipar (cinacalcet), Kyprolis (carfilzomib) and XGEVA (denosumab). Unfavorable changes in foreign exchange rates impacted total revenue and product sales growth by approximately 2.5 percentage points.

Adjusted EPS grew 8 percent versus the second quarter of 2014 to $2.57 driven by higher revenues and lower operating expenses. Adjusted operating income increased 10 percent to $2,551 million.

Adjusted operating margin improved by approximately 2 percentage points to 49 percent.

GAAP EPS were $2.15 compared to $2.01 and GAAP operating income was $2,076 million compared to $1,902 million.

The Company generated $2.7 billion of free cash flow compared to $2.1 billion in the second quarter of 2014.
"Focused execution with our growth products drove record revenues in the second quarter, and expense discipline further leveraged earnings and our ability to invest in new and forthcoming launches," said Robert A. Bradway, chairman and chief executive officer. "Our pipeline continues to deliver, with Repatha approval in the European Union and Kyprolis approval for relapsed multiple myeloma in the United States. We are on track to deliver on our long-term objectives for patients and shareholders."

Second Quarter 2015 Product Sales Performance

Total product sales increased 6 percent for the second quarter of 2015 versus the second quarter of 2014. The increase was driven primarily by ENBREL, Prolia, Sensipar, Kyprolis and XGEVA. Growth for the quarter was due to price and higher unit demand.
Neulasta (pegfilgrastim) sales increased 2 percent year-over-year driven by price. NEUPOGEN (filgrastim) sales decreased 14 percent year-over-year driven primarily by the impact of competition in the United States (U.S.).

ENBREL sales increased 8 percent year-over-year driven by price, offset partially by the impact of competition.

Prolia sales increased 29 percent year-over-year driven by higher unit demand.

XGEVA sales increased 11 percent year-over-year driven primarily by higher unit demand.

EPOGEN (epoetin alfa) sales decreased 4 percent year-over-year driven primarily by a shift in dialysis customer purchases to Aranesp (darbepoetin alfa), as well as the impact of competition, offset partially by price.

Aranesp sales decreased 7 percent year-over-year driven by unfavorable changes in foreign exchange rates and a prior year positive Medicaid rebate estimate adjustment, offset partially by higher unit demand, including the shift from EPOGEN.

Sensipar/Mimpara sales increased 15 percent year-over-year driven by higher unit demand and price.

Vectibix (panitumumab) sales increased 21 percent year-over-year driven by higher unit demand.

Nplate (romiplostim) sales increased 6 percent year-over-year driven primarily by higher unit demand.

Kyprolis sales increased 53 percent year-over-year driven by higher unit demand.

Product Sales Detail by Product and Geographic Region

Second Quarter Operating Expense, Operating Margin and Tax Rate Analysis, on an Adjusted Basis

Operating Expenses decreased 1 percent, including a 3 percentage point benefit from foreign exchange rates.

Cost of Sales margin improved 0.8 points driven by lower royalty expense and higher product sales.

Research & Development (R&D) expenses decreased 6 percent driven by savings from transformation and process improvement efforts, offset partially by increased support for later-stage clinical programs.

Selling, General & Administrative expenses increased 2 percent as increased commercial expenses for new product launches were enabled by savings from transformation and process improvement efforts.

Operating Margin improved by approximately 2 percentage points to 49 percent.

Tax Rate increased 3.8 percentage points to 20.0 percent primarily due to changes in the geographic mix of earnings.

Cash Flow and Balance Sheet Discussion

The Company generated $2.7 billion of free cash flow in the second quarter of 2015 versus $2.1 billion in the second quarter of 2014. The increase was driven by improved working capital and higher operating income, as well as the termination of foreign exchange forward contracts.

The Company’s third quarter 2015 dividend of $0.79 per share declared on July 28, 2015, will be paid on Sept. 8, 2015, to all stockholders of record as of the close of business on Aug. 17, 2015.

During the second quarter, the Company repurchased 3.3 million shares of common stock at a total cost of $0.5 billion. At the end of the second quarter, the Company had $2.9 billion remaining under its stock repurchase authorization.

2015 Guidance

For the full year 2015, the Company now expects:

Total revenues in the range of $21.1 billion to $21.4 billion and adjusted EPS in the range of $9.55 to $9.80. Previously, the Company expected total revenues in the range of $20.9 billion to $21.3 billion and adjusted EPS in the range of $9.35 to $9.65.

Adjusted tax rate to be in the range of 18 percent to 19 percent. This excludes the benefit of the federal R&D tax credit, which has not yet been extended for 2015.

Capital expenditures to be approximately $700 million.

Second Quarter Product and Pipeline Update

The Company provided the following updates on selected product and pipeline programs:

Repatha

In July, the European Commission approved Repatha for the treatment of high cholesterol, as an adjunct to diet:
In combination with statins or other lipid lowering therapies in patients unable to control their LDL cholesterol with maximum tolerated statin doses, or
Alone or in combination with other lipid lowering therapies in patients who are statin intolerant or for whom a statin is contraindicated.

Repatha is also approved in the EU in combination with other lipid-lowering agents in patients with homozygous familial hypercholesterolemia (age 12 and over).
Enrollment has completed in the Phase 3 cardiovascular outcomes study.

Kyprolis

In July, the U.S. Food and Drug Administration expanded the indication of Kyprolis to include the treatment of patients who have received 1 to 3 prior lines of therapy, in combination with lenalidomide and dexamethasone.
A Marketing Authorization Application (MAA) is currently under accelerated assessment in the EU for relapsed multiple myeloma.
Supplemental New Drug Application submitted in the U.S. based on data from the phase 3 ENDEAVOR study.
Enrollment recently completed in the Phase 3 CLARION study versus Velcade (bortezomib) in newly diagnosed multiple myeloma patients.

A Phase 3 study initiated with weekly dosing in relapsed and refractory multiple myeloma.

AMG 416

Submissions of a New Drug Application in the U.S. and a MAA in the EU are planned for the third quarter of 2015 for secondary hyperparathyroidism.

AMG 334

Phase 3 studies initiated in episodic migraine.
Note: VELCADE is a registered trademark of Millennium Pharmaceuticals, Inc.

Non-GAAP Financial Measures

In this news release, management has presented its operating results for the second quarters of 2015 and 2014 in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on an adjusted (or non-GAAP) basis. In addition, management has presented its full year 2015 EPS and tax rate guidance in accordance with GAAP and on an adjusted (or non-GAAP) basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, restructuring and certain other items from the related GAAP financial measures. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the second quarters of 2015 and 2014. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release.

The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor’s overall understanding of the financial performance and prospects for the future of the Company’s core business activities by facilitating comparisons of results of core business operations among current, past and future periods. In addition, the Company believes that excluding the non-cash amortization of intangible assets, including developed product technology rights, acquired in business combinations treats those assets as if the Company had developed them internally in the past, and thus provides a supplemental measure of profitability in which the Company’s acquired intellectual property is treated in a comparable manner to its internally developed intellectual property. The Company believes that FCF provides a further measure of the Company’s liquidity.

The Company uses the non-GAAP financial measures set forth in the press release in connection with its own budgeting and financial planning. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

On July 30, 2015 Seattle Genetics, Inc. (Nasdaq: SGEN)reported financial results for the second quarter and six months ended June 30, 2015 (Press release, Seattle Genetics, JUL 30, 2015, View Source;p=RssLanding&cat=news&id=2073186 [SID:1234506770]). The company also highlighted ADCETRIS (brentuximab vedotin) commercialization, regulatory and clinical development accomplishments, progress with other proprietary pipeline programs and antibody-drug conjugate (ADC) and other collaborator updates.

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"With record ADCETRIS net sales in the second quarter and a broad ongoing clinical development program comprising four phase 3 trials for a range of CD30-expressing malignancies, we are enthusiastic about the potential to expand ADCETRIS to help patients in need," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "Looking ahead, we are increasing our 2015 ADCETRIS net sales guidance by $10 million to now be in the range of $210 million to $220 million. We anticipate a decision from the FDA on our AETHERA supplemental BLA by August 18th, and are on track to complete enrollment in our phase 3 ECHELON-1 and ALCANZA trials before the end of 2015. In addition, our clinical-stage pipeline is gaining increased visibility with data from multiple programs expected over the course of the next six to nine months, notably SGN-CD33A and SGN-CD19A."

Recent ADCETRIS Highlights

The U.S. Food and Drug Administration (FDA) filed the company’s supplemental BLA for use of ADCETRIS in the AETHERA setting for post-transplant consolidation treatment of Hodgkin lymphoma (HL) patients at high risk of relapse or progression. The FDA granted Priority Review and set a Prescription Drug User Fee Act (PDUFA) target action date of August 18, 2015.

Reported data on ADCETRIS in the AETHERA setting, in diffuse large B-cell lymphoma (DLBCL) and in several other HL and non-Hodgkin lymphoma settings at multiple sessions during the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 50th Annual Meeting and the 13th International Conference on Malignant Lymphoma (ICML). The data demonstrated the breadth of the ADCETRIS clinical development program and its broad potential in a range of CD30-expressing malignancies.

Takeda Pharmaceutical Company Limited (Takeda) continues to receive additional marketing approvals for ADCETRIS, which is now commercially available in 56 countries worldwide.

Initiated a phase 2 clinical trial evaluating ADCETRIS in systemic lupus erythematosus (SLE, or lupus), a chronic autoimmune disease.

Recent Pipeline, Collaborator and Other Highlights

Entered into a strategic collaboration and license agreement with Unum Therapeutics to develop and commercialize novel antibody-coupled T-cell receptor (ACTR) therapies for cancer. Under the terms of the agreement, Seattle Genetics made an upfront payment of $25 million and an equity investment of $5 million in Unum. The companies will initially develop two ACTR products incorporating Seattle Genetics’ antibodies, and Seattle Genetics has an option to expand the collaboration to include a third ACTR product.

Received a milestone payment under a collaboration with AbbVie, triggered by its initiation of a phase 1 trial for an ADC for hematologic malignancies utilizing Seattle Genetics’ technology.

Named Sundos Hamza, M.D. as Senior Vice President, Pharmacovigilance and Risk Management. Dr. Hamza was previously Senior Vice President, Drug Safety Risk Management at InterMune and before that she was Executive Medical Director, Safety and Regulatory at Amgen.

Anticipated Upcoming Activities

Obtain FDA review decision for use of ADCETRIS in the AETHERA setting for post-transplant consolidation treatment of HL patients at high risk of relapse or progression.

Complete enrollment in ADCETRIS phase 3 trials ECHELON-1 and ALCANZA during 2015 and ECHELON-2 during 2016.
Initiate a randomized phase 2 trial of Rituxan (rituximab) and bendamustine with or without ADCETRIS for relapsed/refractory CD30-positive DLBCL.

Initiate phase 1 / 2 trials of ADCETRIS in combination with Opdivo (nivolumab) in HL and non-Hodgkin lymphoma.
Conduct an end of phase 1 meeting with the FDA and seek scientific advice in Europe to determine next steps towards a global registration strategy for SGN-CD33A.

Initiate a randomized phase 2 trial of SGN-CD19A in second-line DLBCL.

Report clinical data from ADCETRIS and pipeline programs, including SGN-CD33A, SGN-CD19A and SGN-LIV1A.

ADCETRIS is not currently approved for the post-transplant consolidation treatment of HL patients at high risk of relapse or progression, or for use in DLBCL, SLE or non-Hodgkin lymphoma other than systemic anaplastic large cell lymphoma.

Second Quarter and Six Months 2015 Financial Results

Total revenues in the second quarter and six month periods ended June 30, 2015 increased to $77.1 million and $159.3 million, respectively, from $68.3 million and $136.6 million for the same periods in 2014. ADCETRIS sales in the second quarter were $55.1 million, compared to $44.8 million for the second quarter of 2014. For the year-to-date, ADCETRIS sales were $104.0 million, compared to $83.5 for the year-to-date period in 2014, an increase of 25 percent. Second quarter 2015 revenues also included royalty revenues driven by international sales of ADCETRIS by Takeda of $7.6 million, compared to $7.3 million in the second quarter of 2014. For the year-to-date in 2015, royalty revenues were $18.7 million, compared to $20.0 million for the first six months of 2014. First quarter 2014 royalty revenues included a $5 million sales milestone payment from Takeda. In addition, revenues included amounts earned under the company’s ADCETRIS and ADC collaborations totaling $14.4 million in the second quarter and $36.6 million for the first six months of 2015, compared to $16.2 million and $33.1 million for the same periods in 2014.

Total costs and expenses for the second quarter of 2014 were $124.7 million, compared to $86.0 million for the second quarter of 2014. For the first six months of 2015, total costs and expenses were $228.6 million, compared to $170.6 million in the first six months of 2014. The increase in 2015 costs and expenses was primarily driven by the $25.0 million upfront payment to Unum and investment in Seattle Genetics’ pipeline programs.

Non-cash, share-based compensation cost for the first six months of 2015 was $17.6 million, compared to $18.7 million for the first six months of 2014.

Net loss for the second quarter of 2015 was $47.5 million, or $0.38 per share, compared to a net loss of $17.6 million, or $0.14 per share, for the second quarter of 2014. For the six months ended June 30, 2015, net loss was $69.2 million, or $0.55 per share, compared to a net loss of $33.9 million, or $0.28 per share, for the same period in 2014.

As of June 30, 2015, Seattle Genetics had $249.5 million in cash, cash equivalents and investments, compared to $313.4 million as of December 31, 2014.

2015 Financial Outlook

Seattle Genetics anticipates that 2015 revenues from ADCETRIS net product sales in the U.S. and Canada will be slightly higher than previously anticipated, and are now expected to be in the range of $210 million to $220 million. The company also now anticipates that 2015 research and development expenses will be in the range of $275 million to $300 million, primarily due to the $25 million upfront payment under the recent collaboration with Unum Therapeutics.

On July 31, 2014 Eisai Co., Ltd. and Halozyme Therapeutics, Inc. (NASDAQ: HALO) reported that they have signed a clinical collaboration agreement to evaluate Eisai’s anticancer agent eribulin mesylate (brand name: Halaven, "eribulin") in combination with Halozyme’s investigational new drug PEGPH20 (PEGylated recombinant human hyaluronidase) in first line HER2- negative advanced breast cancer (Press release, Eisai, JUL 30, 2015, View Source [SID:1234506771]).

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Eribulin, a halichondrin class microtubule dynamics inhibitor with a novel mechanism of action, is currently approved for the treatment of advanced breast cancer in approximately 60 countries worldwide. Structurally, eribulin is a simplified and synthetically produced version of halichondrin B, a natural product isolated from the marine sponge Halichondria okadai. Eribulin is believed to work by inhibition of the growth phase of microtubule dynamics which prevents cell division.

PEGPH20 is an investigational drug administered intravenously that targets the degradation of hyaluronan, a glycosaminoglycan – or chain of natural sugars throughout the body. Hyaluronan accumulates around cancer cells, increasing tumor interstitial fluid pressure and constricting tumor vasculature, subsequently inhibiting anticancer agents from reaching cancer cells. By degrading hyaluronan, PEGPH20 increases blood flow to the tumor which may allow cancer therapies to be more efficiently delivered to their target.

Under the agreement, the companies will jointly conduct and share the costs of a Phase Ib/II clinical study seeking to determine whether or not the combination therapy of eribulin and PEGPH20 can improve the overall response rate in advanced breast cancer patients with high levels of hyaluronan. In hyaluronan-rich triple-negative breast preclinical animal models, the addition of PEGPH20 to eribulin showed a significantly higher tumor growth inhibition including tumor regression when compared to eribulin alone.

"This is a very important collaboration, one that speaks to our continued commitment to address the unmet medical needs of patients with advanced breast cancer," said RuiRong Yuan, MD, Vice President and Chief Medical Officer, Eisai Global Oncology. "We look forward to enrolling patients in the clinical trial and assessing the results."

"This agreement marks the first clinical collaboration agreement for Halozyme and extends the study of PEGPH20 to a substantially wider population of patients with a partner that is a clear leader in the treatment of advanced breast cancer," said Dr. Helen Torley, President and CEO, Halozyme Therapeutics, Inc.

On July 29. 2015 Galena Biopharma reported the product launch for Zuplenz(R) (ondansetron) Oral Soluble Film in the United States (Press release, MonoSol Rx, JUL 29, 2015, View Source [SID:1234508917]).

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Zuplenz is now available nationwide and is supplied in both 4 mg and 8 mg strengths. Zuplenz is clinically bioequivalent to ondansetron orally disintegrating tablets (ODT) with a safety profile equivalent to ondansetron. The novel, PharmFilm(R) oral soluble film technology utilized by Zuplenz provides for convenient delivery and several key patient benefits including:

Rapidly dissolves in the mouth in about 10 seconds
Eliminates the burden of swallowing pills during emesis and in cases of oral irritation
Does not require water to administer
Pleasant peppermint flavor with no gritty aftertaste
Non-sedating

"Ondansetron is the gold-standard treatment option for patients suffering from nausea and vomiting due to chemotherapy, radiation treatments, and surgical procedures; and, we believe the unique and innovative product attributes of Zuplenz will be a valuable treatment option for patients and physicians to relieve these debilitating side-effects," said Mark W. Schwartz, Ph.D., President and Chief Executive Officer. "With the launch of Zuplenz, we will leverage our existing commercial infrastructure including our outsourced Galena Patient Services (GPS) program to work directly with the patient, prescriber, insurance provider, and pharmacy to help guide the process of getting the patient their medication once prescribed by the physician."

Zuplenz is approved in adult patients for the prevention of highly and moderately emetogenic chemotherapy-induced nausea and vomiting (CINV), radiotherapy-induced nausea and vomiting (RINV), and post-operative nausea and vomiting (PONV). Zuplenz is also approved for moderately emetogenic CINV in pediatric patients four years and older.

The active pharmaceutical ingredient in Zuplenz, ondansetron, is used to prevent nausea and vomiting caused by cancer chemotherapy, radiation therapy, and surgery. The National Comprehensive Cancer Network (NCCN) 2014 guidelines recommend the use of ondansetron in patients with highly and moderately emetogenic cancer chemotherapy-induced and radiotherapy-induced nausea and vomiting. Ondansetron belongs to a class of medications called serotonin 5-HT3 receptor antagonists and works by blocking the action of serotonin, a natural substance that may cause nausea and vomiting. According to data from both IMS and Wolters Kluwer, the branded 5-HT3 market exceeded $1 billion in the U.S. in 2014. The product was licensed from MonoSol Rx, LLC, the developer of the oral soluble film technology, PharmFilm(R), and manufacturer of the product.

On July 29, 2015 Baxter International Inc. (NYSE:BAX) reported second quarter financial results that exceeded the company’s previously issued guidance, and provided its complete financial outlook for the second half of 2015 (Filing, 8-K, Baxter International, JUL 29, 2015, View Source [SID:1234506745]). The results for the second quarter of 2015 include the company’s BioScience business, which was officially spun-off on July 1st and is now operating as a publicly traded biopharmaceutical company, Baxalta Incorporated (NYSE: BXLT). Starting in the third quarter of 2015, the BioScience business will be presented as a discontinued operation in Baxter’s results.

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For the second quarter, Baxter posted net income of $332 million and earnings of $0.60 per diluted share. Second quarter 2015 results included net after-tax special items totaling $218 million (or $0.40 per diluted share) primarily related to costs associated with the company’s spin-off of Baxalta, select business development initiatives and intangible asset amortization, partially offset by a benefit from a litigation settlement in which Baxter was the beneficiary. Second quarter 2014 results included net after-tax charges totaling $172 million or ($0.31 per diluted share).

On an adjusted basis, excluding special items, Baxter’s second quarter net income totaled $550 million, or $1.00 per diluted share, exceeding the guidance the company previously provided of $0.92 to $0.96 per diluted share.

Worldwide sales totaled $3.9 billion, a decline of 6 percent from the same period last year. Excluding the impact of foreign currency, Baxter’s worldwide sales grew 3 percent exceeding the company’s guidance of 1 percent. Sales within the United States grew 1 percent to $1.8 billion, and international sales of $2.1 billion declined 12 percent. Excluding the impact of foreign currency, Baxter’s international sales grew 4 percent in the quarter.

By business, sales within Medical Products totaled $2.5 billion, a decline of 9 percent. Excluding the impact of foreign currency, Medical Products sales were comparable to the prior year. Growth in the quarter was negatively impacted by approximately 3 percent due to increased competition in the United States for the company’s generic oncology injectable, cyclophosphamide. Medical Products performance in the quarter benefited from strong sales of inhaled anesthetics, infusion pumps and peritoneal dialysis products as well as increased demand for the company’s injectable drug compounding services.

On a reported basis, BioScience sales of $1.4 billion declined 2 percent compared to the prior-year period. Excluding the impact of foreign currency, BioScience sales increased 7 percent driven by solid growth across the portfolio. Additional details on Baxalta’s performance in the second quarter will be provided by Baxalta in a press release and investor webcast to be held on July 30th. See www.baxalta.com for more information.

"The spin-off of Baxalta was a historic event for the company, and we are excited to embark on this new chapter for Baxter with a newfound focus and vision that furthers our mission to help save and sustain lives," said Robert L. Parkinson, Jr., chairman and chief executive officer. "As the new Baxter evolves, we are intensely focused on accelerating profitable growth and expanding margins through disciplined portfolio management, implementation of cost reduction initiatives and the near-term launches of innovative new products. These efforts will drive meaningful value, both in the near and long terms, for our shareholders, partners, employees, and the patients and healthcare providers we serve."

Six-Month Results
For the first six months of 2015, Baxter reported net income of $762 million, or $1.39 per diluted share. Excluding special items, Baxter’s adjusted net income for the six-month period totaled $1.1 billion, or $2.01 per diluted share.
Baxter’s worldwide sales for the six-month period totaled approximately $7.7 billion, declining 4 percent from the prior-year period. Excluding the impact of foreign currency, Baxter’s sales increased 3 percent during the first six months of the 2015.
Medical Products sales of $4.9 billion declined 7 percent from the prior-year period, and increased 3 percent after adjusting for the impact of foreign currency and increased competition for cyclophosphamide.

BioScience sales of $2.8 billion through June 30, 2015 were comparable to the prior-year period on a reported basis, and advanced 8 percent excluding the impact of foreign currency.

Recent Highlights
In addition to completing its spin-off of Baxalta during the quarter, Baxter achieved a number of additional milestones, including:

• Completion of 510K submission with the U.S. Food and Drug Administration (FDA) for AMIA with SHARESOURCE, Baxter’s next generation peritoneal dialysis cycler which incorporates several benefits designed to improve the patient experience and increase the adoption of peritoneal dialysis. In addition, the SHARESOURCE functionality provides secure two-way connectivity so healthcare professionals can effectively monitor their patients’ home treatments.

• Successful launch of Baxter’s next-generation SIGMA SPECTRUM infusion pump in the U.S., Puerto Rico and Canada. The SPECTRUM platform has been honored with the Best in KLAS customer satisfaction award for four consecutive years, and the latest generation pump includes several innovative features, including an enhanced Master Drug Library, which helps to reduce pump-related adverse drug events and improve patient safety. Customer response has been very positive, and the SIGMA SPECTRUM is currently being used or in the process of being placed in six of the top seven hospital systems in the U.S. as ranked by U.S. News & World Report.

• FDA acceptance of Baxter’s Investigational Device Exemption, or IDE, for VIVIA, a home-based hemodialysis (HD) system. This milestone allows Baxter to initiate its final U.S. study in the coming months. VIVIA has the potential to transform home hemodialysis and allow more patients to benefit from high-dose HD in their homes.

• Launch of the AK98 in-center hemodialysis monitor in several markets in Eastern and Central Europe, the Middle East and Africa. The AK98 is the latest monitor in the AK series and improves the usability, reliability and total cost of operation for customers.

• Baxter’s BioPharma Solutions contract manufacturing business was recognized as Best Contract Manufacturer at the annual Vaccine Industry Excellence (ViE) Awards, held at the World Vaccine Congress in Washington, D.C. This is the fourth time that Baxter’s BioPharma Solutions business has been recognized for this honor.

Outlook for Third Quarter and Second Half 2015
Baxter also announced today its outlook for the third quarter and second half of 2015.
For both the third quarter and second half of the year, the company expects sales to be comparable to the prior year periods, excluding the impact of foreign currency. Including the impact of foreign currency, the company expects

BAXTER REPORTS 2nd QUARTER FINANCIAL RESULTS

sales to decline approximately 9 percent in both periods. After adjusting for the impact of foreign currency and increased competition in the U.S. for cyclophosphamide, Baxter expects sales growth of approximately 3 percent in both the third quarter and second half of 2015.

Baxter also expects earnings from continuing operations, before special items, of $0.29 to $0.31 per diluted share for the third quarter and $0.58 to $0.62 per diluted share for second half of 2015.

The third quarter and second half of 2015 earnings guidance excludes approximately $0.29 per diluted share and $0.35 per diluted share, respectively, of projected intangible amortization expense and a loss on extinguishment of debt, net of gains from the unwinding of interest rate swaps related to the company’s debt tender offers. Reconciling for the inclusion of intangible asset amortization and the loss on extinguishment of debt results in expected GAAP (Generally Accepted Accounting Principles) earnings of $0.00 to $0.02 per diluted share and $0.23 to $0.27 per diluted share, before other special items, for the third quarter and second half periods.