Medical products giant Baxter International (BAX) officially commenced the U.S. launch of GLASSIA Alpha 1-Proteinase inhibitor for the treatment of emphysema. The company secured exclusive marketing rights to GLASSIA in the U.S., Canada, Australia and New Zealand from Israel-based biopharmaceuticals company Kamada Ltd in August 2010.
The distribution deal calls for an upfront cash payment of $20 million by Baxter to Kamada and includes a provision preventing the latter from negotiating or agreeing for distributing GLASSIA in other markets for a defined period of time. Baxter has also been granted the rights to produce the drug and secure associated regulatory approvals in the specific markets covered by the agreement.
Moreover, Baxter may make additional milestone payments of up to $25 million on achievement of specific commercial and production-related landmarks and royalties (undisclosed) on future product sales.
GLASSIA, the first and only liquid, ready-to-use Alpha1-Proteinase inhibitor, is indicated for treating emphysema due to Alpha 1 deficiency, also known as Alpha1-Antitrypsin deficiency (AATD). The drug was approved by the U.S. Food and Drug Administration (FDA) for this indication in July 2010. GLASSIA is expected to generate annual sales of roughly $40 million.
AATD is an under-diagnosed genetic disorder caused by the defective production of Alpha 1-Antitrypsin (A1AT), a naturally occurring protein, leading to reduced A1AT activity in the blood and lungs. Roughly 100,000 people are estimated to have inherited AATD in the U.S. Less than 10% of this population has been adequately diagnosed. Individuals with AATD may eventually develop emphysema, and sometimes, liver failure. Common symptoms of AATD are coughing and shortage of breath.
Baxter will look to obtain distribution licenses for the drug in other countries where it has secured commercial rights. The company is committed to improve the awareness and early diagnosis of AATD. Baxter sponsors the AlphaTest diagnostic kit and so far has assisted in testing more than 85,000 people for AATD.
Baxter is a leading global medical products and services company that develops, manufactures and markets products to treat hemophilia (a bleeding disorder), kidney disease and infectious diseases. The company’s main competitors are Becton, Dickinson and Company (BDX) and Johnson & Johnson (JNJ).
Baxter’s products are primarily life-sustaining, a natural hedge against soft economic conditions. However, the company faces a weak hospital spending backdrop and reimbursement risks. We are currently Neutral on Baxter.
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