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Baxter (BAX) Inks Sterile Manufacturing Agreement With Novavax

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Baxter International Inc. (BAX - Free Report) announced that Baxter BioPharma Solutions inked a deal to offer sterile manufacturing services for NVX-CoV2373 — Novavax’s COVID-19 recombinant nanoparticle vaccine candidate with Matrix-M adjuvant. Notably, NVX-CoV2373 is currently undergoing Phase 3 trials and has not yet been authorized or approved for use.

Notably, Baxter BioPharma Solutions is a leading contract manufacturing organization focusing on parenteral (injectable) pharmaceuticals that include vaccines. Per the terms of the agreement, Baxter will provide manufacturing services at its state-of-the-art facility in Halle/Westfalen, Germany for the production and distribution of vaccine.

This deal is likely to provide a boost to Baxter’s Pharmaceutical’s segment.

Novavax Vaccine at a Glance

NVX-CoV2373 contains a full-length, prefusion spike protein created by utilizing Novavax’ recombinant nanoparticle technology and the company’s proprietary saponin-based Matrix-M adjuvant.

The purified protein can neither cause COVID-19 disease nor can it replicate as encoded by the genetic sequence of the SARS-CoV-2 spike (S) protein and is produced in insect cells.

The protein will be stable at 2°C to 8°C. It is manufactured in a ready-to-use liquid formulation that facilitates distribution through standard vaccine supply chain channels.

Significance of the Deal

With the COVID-19 pandemic raging around the globe, this collaboration is intended to bring safe and effective COVID-19 vaccine to people around the world by working together as well as contributing their unique capabilities and expertise.

The deal will enhance commercial-scale manufacturing that is crucial for the production of the vaccine and will strengthen supply chain network to ensure access in the U.K. and European markets. This will ultimately assisting in the combat against the COVID-19 pandemic.

Industry Prospects

Per a report by Prophecy Market Insights, the global generic sterile injectables market accounted for $68.7 billion in 2019 and is estimated to reach $196.2 billion by 2029, at a CAGR of 11.2%. Increasing incidence of chronic illnesses across the world is expected to drive the demand for sterile injectable drugs in the coming years. In addition, growing number of drug manufacturers focusing on the production of drugs is fuelling growth of the market.

Hence this agreement is a well-timed one for Baxter.

Another Notable Development

In November 2020, Baxter announced the expansion of its sterile fill/finish manufacturing facilities located in Bloomington, IN, which is being jointly funded by Baxter and client investment. Notably, the construction of the planned expansion of the existing facility infrastructure worth $50 million is expected to be completed in 2021. For investors’ note, the Bloomington facilities are operated by Baxter’s BioPharma Solutions business.

The expansion will add capacity and the state-of-the-art technology that will enable the company to better serve the needs of its clients and patients.

Price Performance

In the past three months, shares of the company have gained 2.9% compared with the industry’s growth of 5.3%.

Zacks Rank and Key Picks

Currently, Baxter is carrying a Zacks Rank # 4 (Sell).

Some better-ranked stocks from broader medical space include Quidel Corporation (QDEL - Free Report) , AdaptHealth Corp. (AHCO - Free Report) and Cellectar Biosciences, Inc. (CLRB - Free Report) . While Quidel and AdaptHealth sport a Zacks Rank # 1 (Strong Buy), Cellectar Biosciences carries a Zacks Ran # 2 (Buy). You can see the complete list of Zacks #1 Rank stocks here.

Quidel has a projected long-term earnings growth rate of 25%

AdaptHealth has a projected long-term earnings growth rate of 753.3%

Cellectar Biosciences has a projected long-term earnings growth rate of 36.78%

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