Will the Baxter International bioscience spin-out become a bleeder by relying too heavily on hemophilia treatments?

This is a key question being sorted out as the health care products company prepares to split into two entities next year. In 2013, Baxter’s hemophilia business amounted to $3.4 billion, or slightly more than 58 percent of the overall biopharmaceutical business.

But much of that was generated by one product, the Advate treatment for hemophilia A, which is the most prevalent form of the illness. Baxter did not break out individual product sales, but Piper Jaffray analyst Matt Miksic estimates the medication generated about $1.8 billion in revenue last year.

However, Baxter faces significant competition later this year from Biogen Idec, which is set to launch a long-acting version — another way of saying that patients will need fewer infusions. This would be a significant convenience and, not surprisingly, has garnered considerable interest among physicians.

A recent survey of 33 hematologists by Leerink Swann found that the rival Biogen treatment, called Eloctate, would likely gain as much as 37 percent of the key adult market for preventing bleeding over the next two years.

Of course, this is a small sample size, but it does provide a glimpse into physician thinking. And insights are especially useful given that hematologists are known to be cautious about switching patients among treatments.

“It’s great to have another tool in the tool chest, but we will need to be very careful,” says Margaret Ragni, a professor of medicine at the University of Pittsburgh and director of the Hemophilia Center of Western Pennsylvania. “There are a host of issues to consider for each patient.”

For this reason, there is no clear consensus on the outlook for the Baxter biopharma business. Although the unit is a market leader in blood plasma and blood collection, its product pipeline is not especially robust, according to Mike Weinstein, an analyst at JP Morgan.

“The question is what transpires in the [hemophilia] market,” says Weinstein. “Right now, they’ll have an exposure… Baxter is trying to catch up [with its own long=acting version], but will be 1-1/2 to two years behind. This is not a one-time hit to that business.”

Just the same, there is some optimism. “We do [forecast] market share loss, but when you look at the four distinct patient populations within hemophilia… the share loss is predominantly within the adult prophylactic population,” says Leerink Swann analyst Danielle Antalffy. “And this is a sticky market, so Baxter will retain market share, particularly in patients who are already doing well on Advate.”

Adds Piper Jaffray’s Miksic: “It depends on how cautious and slow-moving patients are and how much they’d like to stick with the manufacturer and [treatment] they’re using. They may opt for convenience one day, but what they’ll do over the next few years can be different.”

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