Healthcare Industry News:  Baxter International 

Devices

 News Release - August 6, 2007

Baxter Announces Collaboration for Development of Next-Generation Home Hemodialysis Machine

DEERFIELD, Ill., Aug. 6 (HSMN NewsFeed) -- Baxter International Inc. (NYSE: BAX ) announced today a collaboration with DEKA Research & Development Corp. and HHD, LLC for the development of a next-generation home hemodialysis machine, which will further expand the company's leadership in home dialysis therapy.

"This collaboration highlights Baxter's ongoing commitment to innovation in end-stage renal disease (ESRD) treatment," said Bruce McGillivray, president, Baxter's Renal business. "In addition, this reflects a strategic approach to expediting and enhancing product development through targeted partnerships."

Baxter and DEKA have collaborated on other successful products in the past, most notably on the design and development of Baxter's HomeChoice automated peritoneal dialysis machine.

"Home hemodialysis represents the next advancement in home dialysis therapy," said McGillivray. "Our global leadership in home dialysis therapy, combined with DEKA's new medical product development expertise, will allow us to advance this promising technology at a faster pace."

In connection with the collaboration, Baxter has purchased an option to acquire the assets of HHD, LLC and will fund DEKA's related research and development activities. Baxter may also make future royalty payments to DEKA. In accordance with Generally Accepted Accounting Principles (GAAP), Baxter expects to record a special net pre-tax charge of up to $25 million (or $0.04 per diluted share) for in-process R&D associated with this transaction in the third quarter of 2007.

About home dialysis therapy

Dialysis serves as a replacement kidney, removing waste products and excess fluid from the body. Conventional in-center hemodialysis, in which patients receive treatments for four hours a day three times a week, has reached a plateau in the advancement of patient outcomes. The nephrology community is now investigating more frequent dialysis of patients as a potential breakthrough in improving clinical outcomes.

A number of small-scale clinical trials have found that more frequent and longer dialysis treatments, which are more achievable through at-home therapy options, may result in significant short-term and long-term clinical benefits for patients such as fewer hospitalizations, better anemia control and improved blood pressure management.

"This will give us the opportunity to offer two forms of highly effective at-home dialysis, peritoneal dialysis and home hemodialysis," said Sarah S. Prichard, M.D., vice president of global medical/clinical affairs and research for Baxter's Renal business. "In addition, patients who are on a home dialysis therapy also see an improvement in their quality of life, as they have greater flexibility and control as to when they receive their treatment."

About DEKA and HHD, LLC

Based in Manchester, NH, DEKA is a research and development company of almost 200 employees comprised of engineering, manufacturing and quality assurance professionals focused on the development of new technologies that span a diverse set of applications. The company was founded in 1982 by Dean Kamen, an inventor who holds more than 250 U.S. and foreign patents, many of them for innovative medical devices that have expanded the frontiers of healthcare worldwide. HHD, LLC owns and licenses certain intellectual property assets expected to be utilized in the home hemodialysis program.

About Baxter

Baxter International Inc., through its subsidiaries, assists healthcare professionals and their patients with the treatment of complex medical conditions, including hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other conditions. The company applies its expertise in medical devices, pharmaceuticals and biotechnology to make a meaningful difference in patients' lives.

This release includes forward-looking statements concerning expectations related to the collaboration between the parties including those expectations related to Baxter's leadership in home dialysis therapy and its strategic approach to product development, the effect on patients of more frequent and longer dialysis treatments, and the financial impact of this transaction on Baxter's earnings, including any special charges that may be recorded. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: actions of regulatory bodies and other governmental authorities; product development risks; changes in laws and regulations; the ability to develop, manufacture and sell home dialysis products; product quality or patient safety concerns; reimbursement policies of government agencies and private payers; demand for and market acceptance risks for new and existing products and other technologies; the ability to enforce patents; numerous other matters of national, regional and global scale, including those of an economic, business, competitive and regulatory nature; and other risks identified in the company's most recent filing on Form 10-Q and other SEC filings, all of which are available on the company's website. The company does not undertake to update its forward-looking statements.



Source: Baxter Healthcare

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