Baxter CEO: Co Has Orders For 80 Million H1N1 Flu Vaccine Doses

Baxter International Inc. (BAX) has orders for about 80 million doses of vaccine for the H1N1 flu virus and expects a sales boost from the flu this year, but no earnings benefit at this point, the company's chief executive said Thursday.

The company is sticking with a "conservative" financial view for now amid some challenges in producing a lot of vaccine and the need to study dosing and safety, said Robert L. Parkinson, Jr., the company's chairman and CEO. The company's outlook for about $30 million to $40 million in added 2009 sales from the flu vaccine is expected to be offset by other factors, such as the cost of scaling up production.

But Baxter does believe this is a "material opportunity" for the company, which will revise projections as needed, Parkinson said during a conference call following Baxter's second-quarter earnings release.

"Clearly we believe this demand has the potential to translate into a significant opportunity," he said.

Baxter's ability to participate in the market for vaccines for the flu strain, also known as swine flu, will be dictated by its production capabilities. The company won't come close to delivering this year on the 80 million doses ordered, noted Parkinson, who described "yield optimization" as a challenge.

The company is working with five countries including the U.K., Ireland and New Zealand on the 80 million doses and isn't in a position to take additional orders, Parkinson said.

"We're confident there will be demand for whatever we are able to produce over the long term," he said.

Shares of Baxter moved higher early Thursday and were recently up 1.7% to $54.01.

When the World Health Organization officially declared a pandemic for the H1N1 strain on June 11, it triggered national health authorities that had agreements with Baxter to place vaccine orders.

Baxter announced in mid-June that it had launched full-scale production of a commercial vaccine for H1N1 based on a cell-based method it says may allow for faster production and delivery than traditional production methods that rely on chicken eggs.

The company is filling and finishing its first bulk batches and should be in a position to ship limited quantities of its vaccine by the end of July or early August, Parkinson said.

Several other companies including Novartis AG (NVS), GlaxoSmithKline PLC (GSK), Sanofi-Aventis SA (SNY) and Solvay SA (SVYSY) are also involved in the effort to produce swine flu vaccines and supply governments.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; [e-mail]