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Baxter International Inc (BAX)

May 07, 2013 8:00 am ET

Executives

Mary Kay Ladone - Vice President of Investor Relations

Ludwig N. Hantson - Corporate Vice President and President of Bioscience

Robert J. Hombach - Chief Financial Officer and Corporate Vice President

Analysts

Michael N. Weinstein - JP Morgan Chase & Co, Research Division

David R. Lewis - Morgan Stanley, Research Division

Chris Hammond - Goldman Sachs Group Inc., Research Division

Lawrence S. Keusch - Raymond James & Associates, Inc., Research Division

Robert Kirby - Fitch Ratings Ltd.

Glenn J. Novarro - RBC Capital Markets, LLC, Research Division

Rajeev Jashnani - UBS Investment Bank, Research Division

Kristen M. Stewart - Deutsche Bank AG, Research Division

Robert A. Hopkins - BofA Merrill Lynch, Research Division

Matthew Taylor - Barclays Capital, Research Division

Operator

Good morning, and welcome to the Baxter International Investor Conference Call to discuss top line results from Baxter's Phase III Alzheimer's disease study. The presentation slides accompanying this conference call can be accessed from the Investor Information section of Baxter's website at www.baxter.com. [Operator Instructions] As a reminder, this conference call is being recorded, and the webcast will be available for replay later today.

I would now like to turn the call over to Ms. Mary Kay Ladone, Vice President of Investor Relations for Baxter International. Ms. Ladone, please proceed.

Mary Kay Ladone

Thank you, Stephanie. Good morning, and thanks for joining us today for Baxter's investor call to discuss the Phase III Alzheimer's study results. We've prepared a slide presentation that we will refer to throughout our discussion this morning, and these slides can be accessed on the Investor Relations section of our website at www.baxter.com.

Joining me today are Bob Hombach, Baxter's Chief Financial Officer; Ludwig Hantson, President of Baxter BioScience; and John Glasspool, Vice President of BioScience Emerging Therapies and Market Development.

Before we get started, let me remind you that this presentation, including comments with respect to additional results from the GAP study, actions with respect to ongoing and future trials and prospective financial results, contain forward-looking statements that involve risks and uncertainties. And of course, our actual results could differ materially from our current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially.

Now let me turn the call over to Ludwig Hantson. When Ludwig concludes his comments, we will open up the call for Q&A. Ludwig?

Ludwig N. Hantson

Thanks, Mary Kay, and good morning. Thanks for calling in. As you know, we issued a press release this morning regarding top line results for Phase III Alzheimer's trial. On Slide 2 of our presentation, we have summarized the key points related to this announcement. First, I'd like to remind you that our Phase III Alzheimer's trial was a double-blind placebo-controlled study in 390 patients, with mild to moderate Alzheimer's disease and in ApoE4 carriers and noncarriers across 45 clinical trial sites.

The Gammaglobulin Alzheimer's Partnership study, or GAP, began in 2008, and was completed in December of 2012. The study was conducted by Baxter in collaboration with the Alzheimer's Disease Corporate Study, or ADCS, a clinical trial consortium supported by the U.S. National Institute on Aging and National Institute of Health.

Overall, the GAP study did not meet the core primary endpoints of reducing cognitive decline and preserving functional abilities. IG treatment was well tolerated and no related safety signals were identified. We will continue to perform additional analyses of secondary and exploratory endpoints, as well as various subgroups over the next several weeks and we will be presenting detailed results at the Alzheimer's Association International Conference, or AAIC, in Boston in July.

As you may know, the study was not powered to show statistical significance amongst the subgroups. In the prespecified subgroup analysis, the 400 milligrams per kilogram arm showed a positive numerical difference in change from baseline versus placebo in cognition, as measured by ADAS-Cog and Modified Mini-Mental state, or 3MS, among moderate patients and ApoE4 carriers. The differences range between 16% and 29%.

Given the study outcome, we are discontinuing ongoing studies of immunoglobulin treatments in Alzheimer's disease, and we are reevaluating the next steps for the program.

Now let me first start with a description of the trial design, which you can find on Slide 3 of our presentation. That GAP study included core primary efficacy endpoints. The first is the change in cognitive function as defined by ADAS-Cog, and the second endpoint is the change in functional abilities as measured by ADCS-ADL, or Activities of Daily Living.

Patients were randomized 1:1:1 to receive 400 milligrams per kilogram, 200 milligrams per kilogram of placebo every 2 weeks, and continued with standard of care treatments, including acetylcholinesterase inhibitors [indiscernible]. It is worth noting that twice as many patients receive IG treatment as compared to placebo.

The placebo group was treated with 0.25% human albumin, also administered every 2 weeks, in order to maintain the blinding of the study. The treatment period was 18 months, and patients were monitored and assessed at 3-month intervals.

On Slide 4, you can see we analyzed multiple secondary endpoints, including a Modified Mini-Mental State exam, or 3MS, which is a cognitive assessment, NPI, or neuropsychiatric inventory, that looks at the behavior aspects of Alzheimer's disease, as well as other assessments.

We are evaluating biomarkers such as: Brain atrophy using volumetric MRI; A beta 40 and A beta 42 levels in plasma and CSF; anti-A beta antibody titers in plasma and CSF; total and phosphorylated top protein levels in CSF; and cerebral glucose metabolism using PET imaging.

We do not have the information on the biomarkers today. Therefore, we will not be discussing them.

In terms of the eligibility criteria, the trial focused on mild to moderate Alzheimer's patients ages 50 to 89 years, with a mini-mental score between 16 to 26, and a probable diagnosis of Alzheimer's disease.

On Slide 5, the chart depicts demographics of the 390 patients in the GAP study. Overall, there was no imbalance in patient demographics amongst the treatment groups at baseline. The mean age for those enrolled was 70 years of age, with approximately 29% under 65 years of age, 57% between 65 to 80 years of age, and 14% over 80 years of age.

60% of the participants were diagnosed as mild, and 40% were moderate. 55% were female, 68% carried a major generic risk factor for Alzheimer's disease, ApoE4.

Now let me provide you with a brief overview of the 3 assessments I will be focusing on during the call this morning: ADAS-Cog, ADCS-ADL and 3MS. The summary is provided on Slide 6.

The ADAS-Cog score is focused on cognition of the patient, with scores ranging between 0 to 70, with higher scores indicating greater impairment. This measure evaluates memory, reasoning and language skills, amongst others.

ADCS-ADL is a structured interview of the caregiver, with scores ranging between 0 to 78, with lower scores indicating greater impairment. This includes basic activities of daily living, including eating, walking and dressing.

Like ADAS-Cog, the 3MS is a cognitive scale and is used in daily practice. It is administered by the rater to the subject, with scores ranging between 0 to 100, with lower scores indicating greater impairment. This measure includes orientation to time, person, place, language and visual construction.

Now turning to the study results, which are shown on Slide 7 in our presentation. The table shows the 2 primary endpoints and 3MS data pertaining to the total group and the prespecified subgroups, mild, moderate, ApoE4 carriers and noncarriers, all at 18 months. The numbers represent the numerical difference in change from baseline. The value in parentheses is the standard deviation. Only P values below P equals 0.10 are shown in the table. All others were not significant or did not show a trend.

On the left, you can see the results for the total group. You can conclude from the table that there were no statistically significant differences between treatment groups and placebo on any of the measurements shown.

On the ADAS-Cog, there was a numerical difference in scores between the 400 milligrams treatment arm and the placebo group. The 400 milligrams per kilogram treatment arm deteriorated from baseline by a mean of 7.4 points, and the placebo group deteriorated by a mean of 8.4 points. This 1 point difference was not statistically significant.

In terms of ADL, you can see that the results are very close between the treatment arms, and the differences were not statistically significant. In the total study population, none of the secondary endpoints showed a statistically significant difference between treatment arms.

We wanted to review findings related to cognition in 2 prespecified subgroups: The moderate patients and ApoE4 carriers, both treated with the 400 milligrams per kilogram dose. As you can see in the moderate patient column, there is a 3.3 points numerical difference in ADAS-Cog in the 400 milligrams per kilogram treatment arm versus placebo at 18 months, with a P value of 0.083. In the same subgroup, you can see a numerical difference of 4.1 points at 18 months, in favor of the 400 milligrams per kilogram dose versus placebo in the 3MS score, with a P value of 0.67.

Moving on to the ApoE4 carrier column, the change in ADAS-Cog of 1.4 points versus placebo was not statistically significant. The 3MS results in the same subgroup showed a statistically significant difference of 4.3 points for the 400 milligrams per kilogram dose versus placebo, with a P value of 0.012.

Overall, the cognitive measurement showed a numerical difference in favor of the 400 milligrams per kilogram dose in both moderate patients and in patients who are carriers of ApoE4. The differences versus placebo were in the range of 16% to 29%.

In summary, the study missed both its primary endpoints. We will continue our analysis of biomarkers and subgroups, particularly to see if there is any correlation with the cognition data in the moderate and ApoE4 subgroups.

We will be discontinuing the ongoing trials of immunoglobulin for the treatment of mild to moderate Alzheimer's disease patients. We are currently reevaluating our approach, and we expect to present the full data set at the AAIC Conference in July in Boston.

And finally, in connection with the announcement today, there is no revision to the Baxter's 2013 financial outlook.

Thank you, and I will open up the call to Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Mike Weinstein with JPMorgan.

Michael N. Weinstein - JP Morgan Chase & Co, Research Division

Just a couple of questions. So one, could you give us a little bit more on the safety side on what the adverse events look like for the therapy arm? And then 2, could you just talk a little bit about the spending on the Alzheimer's program? What that looked like with the ongoing -- the 2 clinical trials? And what you might save from the elimination of the trials as we look to 2014?

Ludwig N. Hantson

Thank you so much for the question, Mike. So with respect to the safety, as I mentioned in the summary, overall, we're very pleased with the safety profile. So IG was well tolerated and we did not see any related safety signals. As far as data is concerned, we look at that, there was no imbalance. We looked at serious AEs, there was no imbalance. There was, as far as AEs is concerned, with incidence above 5%, we did see a little bit of a difference in rash, as well as hemoglobin levels. So things that we are aware of, so we did not see anything new as far as AEs is concerned. On the financial side, Bob?

Robert J. Hombach

Yes. Mike, this is Bob Hombach. So we previously disclosed that these Phase III trials for Alzheimer's with GAMMAGARD cost each about $40 million on an annual basis, given that we're about halfway through the year and there will be some wind down costs here and also given that we are reevaluating our future approach and not sure what our next steps are going to be, really no significant change to our expectations here at the moment.

Ludwig N. Hantson

So maybe one thing to add, as far as the AEs is concerned, which is critical in this category, is that we did not see any imbalance in thromboembolic events. That's important to mention as well, Mike.

Operator

Our next question comes from David Lewis with Morgan Stanley.

David R. Lewis - Morgan Stanley, Research Division

Just 2 clinical questions and a quick follow-up on the market. I guess, just thinking about the clinical analysis, I wonder, was the 3 specified endpoints, was the statistical analysis adjusted for multiple comparisons? And I wonder if you could share some thoughts on, any early thoughts on why you would've seen an effect in the moderate patients versus mild? And I had a quick follow-up.

Ludwig N. Hantson

So with respect to the P values, first of all, I need to say that we missed our primary endpoints. So that means that from a statistical perspective, since we have a higher [indiscernible] model, the P values on the secondary endpoints become questionable, I want to make sure that, that's clear. So with respect to adjustment for multiple comparison, that was done. So -- and then your last question related to...

David R. Lewis - Morgan Stanley, Research Division

The trend that we saw in moderate. Obviously, recent data have shown a trend in mild not moderate. Yours is really showing a trend in moderate versus mild. I wonder if there are any early thoughts on some hypothesis around that?

Ludwig N. Hantson

Yes. So I'm not going to speculate here. But I'm going to put a couple of things on the table. The first thing is nobody understands the pathophysiology of Alzheimer's disease in detail. There's a lot of hypothesis, but there's a lot of question marks here as well, as well as our molecule is concerned, we also know that this is a very complex molecule. So I'm not going to make a statement or speculate why we saw something in ApoE4 versus moderate. What we do know is that overall, the diagnosis of Alzheimer's disease is more accurate in ApoE4 carriers than in noncarriers, that has been described in the literature. So -- and as far as why it would show up in moderate disease, I don't have an answer to that. What we do see in this study as well is that the slope of deterioration in moderate patients is faster than what you see in mild patients. So as far as the sensitivity of the assay is concerned, we're going to end up with a more sensitive assay in moderate versus mild. So I'm not going to speculate of linking the pathophysiology with the mechanism of that.

David R. Lewis - Morgan Stanley, Research Division

And then maybe just a quick follow-up for Bob Hombach. Maybe just 2 market or financial questions, Bob. The first is did any of the recent capacity expansion for Baxter, was that based on assumptions around Alzheimer's? And could you just update us on your most recent thoughts on what percent of the IVIG population you think is perhaps using, for Alzheimer's, off-label therapy? Is that number 3%, 1%, immaterial? Any information on those 2 factors would be very helpful.

Robert J. Hombach

Yes, I'll answer the second one first. Number one, I mean, we would be speculating, but we think it is very, very small in terms of off-label use right now. As you know, this is expensive therapy. And so we, again,, think it's very, very small, but we don't have any visibility to -- and without reimbursement, again, it's going to be very difficult to assume that. But to your other earlier point around capacity, as you know, we've taken a number of steps over the last year or so to increase our flexibility around capacity. But as you also know, at our investor conference, we did give long-range outlook that excluded any assumed benefit from the Alzheimer's program. And so we've been gearing our capacity to meet market demand going forward, which we continue to believe, for IGs in particular, will remain strong and be in the 6% to 8%, would also provide us with the flexibility to meet more stronger near-term demand if it were to present itself. And to do so in as cost-effective a manner as possible. And I think both with the Sanquin contract manufacturing agreement that we entered into last year, as well as with the extension of the useful life of our older L.A. facility, we've accomplished that goal of increasing our flexibility and doing it at a very, very low cost. The marginal cost to extend the useful life of older L.A. in terms of actual investment was less than $20 million. And as it relates to Sanquin, that's an extremely cost-effective contract manufacturing arrangement, where our net investment over time is effectively nil. And we will be able to receive product on a cost basis that's very close to what our current manufacturing is in-house for that step of the fractionation process. So again, our approach here has been to increase our flexibility and do so at a very low cost. I think we've accomplished that. And just one last reminder on that. As you know, we're making a significant investment in Georgia for the Covington facility, but that doesn't come online until 2018. So we're in a very good position now to meet strong market demand going forward. And so I'm very happy with the steps we've taken at this point, and the Alzheimer's program has no effect on that.

Operator

Our next question comes from David Roman with Goldman Sachs.

Chris Hammond - Goldman Sachs Group Inc., Research Division

This is Chris in for David. First one that I have is, really, as you look at the results for this trial and maybe some of the other recent developments, maybe HyQ, et cetera, how are you guys starting to think about the internal investment versus external investment opportunities that are in front of you now? Has this changed the dynamic about the way that you're pursuing that? And whether there could be additional opportunities for acquisitions or co-development agreements? How has that debate changed because of today's news?

Robert J. Hombach

Well, I think, the short answer is there's no change based on today's news. You've seen us do a balance of things on the business development front over the last several years. We've done outright acquisitions, largely smaller bolt-on acquisitions. You see us do a number of in-licensing programs, which we're very excited about a number of those. And we've also launched a venture fund and have made some initial investments there as well to get access to even earlier stage. So I think you're going to see us do things across all 3 spectrums here from a business development standpoint, and the results of this trial are not going to impact that at all. I think we're very pleased with the progress, otherwise, within our BioScience pipeline, Ludwig, I don't know if you want to add anything related to that?

Ludwig N. Hantson

Yes. I think all of you are aware of where we are with a pipeline that we presented end of last year that we have more than 40 projects in development, looking at hopefully more than 20 launches in the next 5 years. So each of those are moving forward as expected. The impact of the Alzheimer's program on each of these programs, I would say, is nil. So we continue that, and it's about the same. You've seen that on the BioScience side, we are moving forward internal programs, as well as we continue to look externally for opportunities, if the opportunities rise. So it will not change the strategy for the BioScience division.

Robert J. Hombach

And just one last comment there. As I mentioned earlier, given that we spend more than $1 billion a year on R&D, and I mentioned that the annual cost of a Phase III trial here for one of the Alzheimer's programs is $40 million, you get a sense that it's not that significant in terms of overall R&D spend to begin with.

Chris Hammond - Goldman Sachs Group Inc., Research Division

Okay. Wonderful. And just as a follow-up. I'm curious about has there been anything anecdotal that you picked up in your initial conversations with investigators on the subgroup level that keeps you guys excited? I think there was some significant results in the moderate group for the 400 milligrams in both cognition and the 3MS but is there -- either of those data points keep you particularly excited for ongoing research opportunities as you analyze the data more?

Ludwig N. Hantson

So as you said, we don't have the full data set. So what is missing are the biomarkers. We don't have the information yet, as well as some other subgroups that we need to look into, as well as, for instance, just looking at the potential interaction between severity in ApoE4. We showed you the subgroup analysis for each of those separately. So there's a lot of work that needs to be done. As far as investigators, we've not reached out to the investigators. This is going to happen today, later today. As you know, we've done this study together with ADCS, so the dialogue has been with a small group of ADCS experts, as well as a small group of internal Baxter people. With respect to ongoing, the way look at this is we can learn a lot from this study. I look at the study, almost, although we call it a Phase III study, it's maybe more Phase II study, where we try to understand the dosing aspect, is there a dose response. We try to understand what is the effect, the clinical effect, as well as the effect on biomarkers. And then once we have all the data, we will have to define on how we're going to move forward. So it's too early to speculate. At this moment, we keep everything open since we have not finalized the data set. So we'll continue to look and focus on the potential responses here.

Operator

Our next question comes from Larry Keusch with Raymond James.

Lawrence S. Keusch - Raymond James & Associates, Inc., Research Division

Just wondering if you can, again -- I know, Ludwig, you just sort of discussed the next steps to the biomarkers and there's a lot of work to be done. But I'm just curious, if you even thought of moving forward with some additional study around Alzheimer's disease, is it even possible that, that could start up in 2014? Or do we really have to look out more than a year, even if you are going to continue the program?

Ludwig N. Hantson

Well, as I said, we have not made the decision that we're going to do the full data set first. So this will keep us busy for the next weeks to come, as well as the point I was making before, is that we will reach out to key stakeholders like NIA, FDA, ADCS and so on. So that's the work that we need to do in the next weeks to come. That will then define if we're moving forward or not. So I'm not going to speculate. But any study, from my experience, any clinical study takes 6 months to start up. So I know this is not a straightforward answer to your question, but this is the best I can do at this point.

Lawrence S. Keusch - Raymond James & Associates, Inc., Research Division

Okay. No, I totally understand. And then Mary Kay or somebody else, would you mind just if you just take the next 18 months, what, in your R&D pipeline, may come forward for approval at time?

Mary Kay Ladone

So we have a number of programs, and Ludwig, if I missed any in BioScience, please chime in, but we are still awaiting the recombinant factor IX approval, which we anticipate in the second half of this year. We're also finishing up our Canadian HHD trial, which as you may recall, the 2 studies, the Canadian trial and the U.S. trial, will support our CE marking in Europe, which we expect next year -- or at the end of this year, I'm sorry, in 2013, with the filing of nocturnal indication in 2014. We have a number of other programs that are ongoing, the rigosertib data we're supposed to see in MDS, either later this year or early next year. That's the collaboration with Onconova. Factor VIIa, we started the Phase III trial. Recombinant von Williebrand, we'll complete that trial early in 2014, and file for approval next year. And then HyQvia, obviously, Ludwig, if you want to provide an update on HyQvia?

Ludwig N. Hantson

Yes. So as far as approvals is concerned for this year, so we're still, as Mary Kay was saying, 3 to 6 are recombinant IX. Number 2 is HyQvia. As you know, we have a positive opinion from Europe. And so we are hopefully looking at an approval in the next weeks to come. As you know, we also submitted [indiscernible] beginning of this year, as well as we've got the orphan drug designation for that. So this hopefully should happen by the end of this year, as well as we submitted HEMOPATCH in a BioSurgery franchise earlier this year, where we should hopefully be looking at an approval in Europe this year as well. So we also mentioned, at the investor conference last year, that we're working on a new device for hemophilia franchise, which we also expect before the end of this year. So I keep my fingers crossed, but we're looking at 5 opportunities before yearend.

Robert Kirby - Fitch Ratings Ltd.

Okay. Great. And have you had -- last one, have you had the meeting with the FDA on HyQvia yet?

Ludwig N. Hantson

So what we've done is -- so you know where we are with Europe. We submitted, as we discussed, we submitted the interim data to the FDA. The FDA responded to the data. And so where we are at this moment, we are in active dialogue with the FDA. The meeting that was scheduled has been canceled or postponed. So we continue the dialogue. I think, that's the critical piece here.

Robert J. Hombach

Yes, I think, the key takeaway there is that given that we already submitted the interim preclinical data and started the dialogue, that the meeting itself became less relevant.

Ludwig N. Hantson

Yes.

Operator

Our next question comes from Glenn Novarro with RBC Capital Markets.

Glenn J. Novarro - RBC Capital Markets, LLC, Research Division

Two questions. One, on the ApoE carriers, is there an analysis that can be done between mild and moderates in that subgroup?

Ludwig N. Hantson

Yes, thanks, Glenn, exactly, and this is what I alluded to, the interaction between severity in ApoE4 carrier. At this moment, we don't have that data yet where we start looking at within ApoE4 mild versus moderate. So this is work that we will have to do in the next days and weeks to come.

Glenn J. Novarro - RBC Capital Markets, LLC, Research Division

Okay. And that data will be available in July, correct?

Ludwig N. Hantson

That is correct.

Glenn J. Novarro - RBC Capital Markets, LLC, Research Division

Okay. And then just as a follow-up for Bob Hombach. I did notice last night after the close that you did -- you raised the dividend by 9%. And I'm guessing that was in conjunction with the data that was being released this morning. So is the signal that you're trying to send to The Street by the dividend rate, is that the outlook for Baxter still remains very strong?

Robert J. Hombach

Well, certainly, that's the message in any case. But as I previously mentioned, I think, in some other forums, as you know, we changed our dividend in the middle of last year effective for the July payment, we increased it by 34%. Historically, we have made our dividend, annual dividend increases coincident with the end of the year. So that July change last year kind of pulled the timing forward. And in the fall of last year, I mentioned that we were going to move towards an alignment with our annual meeting, at the time that we would evaluate our annual dividend increase. And of course, today is our annual meeting. So the issuance of the press release related to dividend is in tandem with a Board meeting and the annual meeting that we're hosting here today. So the fact that the Alzheimer's data has come together here and been disclosed is really a coincident event here, it has nothing to do with the dividend increase. The dividend increase really does reflect our confidence in the long-term growth prospects of the business and our ability to continue to generate significant cash flow. And we're very much committed to maintaining our 40% payout ratio. So going forward, you could expect that the annual meeting would be the logical time for us to be evaluating our dividend going forward.

Operator

Our next question comes from Rajeev Jashnani with UBS.

Rajeev Jashnani - UBS Investment Bank, Research Division

I really wanted to focus just on the IVIG market, really, more than the Alzheimer's, if you don't mind. And I was just wondering when you expect to begin selling the product out of the old L.A. facility, and really, when do you expect to get back to a market rate of growth, which I think you indicated was still about 6% to 8%?

Robert J. Hombach

Yes, we continue to progress well with the refurbishments in L.A. We completed all of the work. We've resumed production. And given the hold times in the production cycle there, we expect in the third quarter this year to have market -- a product available for the market, and everything remains on track related to that. And as that comes back online, given some of the other capacity expansions we've done elsewhere within our network, as we exit 2013, we should be in very good position to support a market growth rate going forward.

Rajeev Jashnani - UBS Investment Bank, Research Division

And if I could just follow-up on that. Regarding the market rate of growth, maybe just talk a little bit about where you see demand that you're not currently serving yet and what, I guess, gives you confidence that, from the demand side, you're going to be able to ramp up that growth?

Robert J. Hombach

Well, as you know, given our constraints, we've had to be very selective about which markets we participate in and the degree to which we participate in them. But as a general matter, and I think, Ludvig and the team did great job at our investor conference last year, laying out the fact that we are serving some very under-diagnosed and under-treated patient populations on a global basis. So the ability to drive awareness and increased diagnosis in primary immune deficiency is high. So I'll turn it over to Ludvig to talk a little bit about that.

Ludwig N. Hantson

Yes. So every inch of diagnosis and treatment of PI patients is one. In addition to that, we continue to look at new formulations. I know that we moved from a -- you know that we moved from an IV to a subcu. We are developing now a 20% subcu that's in Phase III, as well as we're moving forward with HyQ. And hopefully, we're looking at an approval and a launch later this year in Europe. Plus we had the additional indication on MMN last year. So in addition to what Bob was seeing in PI, so new formulations and new indications will continue to help us to grow our brand moving forward.

Operator

Our next question comes from Kristen Stewart with Deutsche Bank.

Kristen M. Stewart - Deutsche Bank AG, Research Division

I just wanted to kind of go back to an earlier question I was asked, and I appreciate you guys are still going through a lot of the data. But I just want to be clear on what, I guess, exactly would be the scenario under which you would feel very confident in moving this forward, I guess, just looking at the biomarkers, what you said, you still need to go through. And I guess looking at the different benefits within the moderate group, I guess, what would be kind of your best case scenario that would give you the most confidence in still moving this forward with another trial?

Ludwig N. Hantson

So many shades of gray here, but I would say the best case scenario would be that across all of the biomarkers, that something is moving with the 400-milligram dose, brain atrophy, looking at top protein, as well as the amyloid plaques. And there is a hypothesis that we can generate linking the biomarkers with the clinical effect. So that would be the best case scenario. So as I said, it's too early to speculate, but this is something that we will be looking for.

Kristen M. Stewart - Deutsche Bank AG, Research Division

And should we expect in July, a formal announcement, I guess, along with all the different subgroup analysis and whatnot at that meeting in terms of Baxter being ready to say whether it's a completely go forward in a different form with a different trial or that you guys would completely just discontinue efforts in Alzheimer's? Is July kind of, I guess -- is that going to get you enough information?

Robert J. Hombach

No, I wouldn't assume that by July, we'll have a definitive view about how we're going to go forward, but I would say by the end of this year, as we work through the data, finalize the analysis. As Ludvig mentioned, they interact with many of our partners with ADCS and NIA and so on, and think about a path forward here. I don't want to put a timeline on that, but I would think by the end of this year, we'd have a view.

Operator

Our next question comes from Bob Hopkins with Bank of America.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

So first, a pretty straightforward one. I'm just wondering as to why you're canceling the ongoing Alzheimer's trials that you have if you still have so much data to analyze on this trial?

Ludwig N. Hantson

So thanks, Bob. So we designed the second Phase III study, which is called the ALPHA study, to confirm the GAP study. So as the GAP study did not meet its primary endpoints, we feel it's not appropriate to continue the ALPHA study and further expose a broad group of patients to a treatment that has not demonstrated clinical benefits. So the additional as analysis that we're going to do in the next weeks will help us, as we said, to define the hypothesis. And if we believe that, that hypothesis, which could be a subgroup that we want to take forward, if we want to move forward with -- on that track, it means that the ongoing study is irrelevant. What we know is that the low dose is not moving at all, so the 200 milligrams per kilogram dose is not moving at all. If something is happening, then it would be in the 400-milligram dose. So you have a dose question, as well as if we were to move on, should we go higher than the 400? As well as you have the severity question, as well as you have an ApoE4 question. So -- and when you put all these different dimensions together, the ALPHA study is becoming a moot point. Plus the ALPHA study will not help us in the short term, it will be years before we have the results of the ALPHA study. And as Bob was saying, if we were to make a decision, maybe we'll make a decision before the end of this year. But I don't think people will be waiting another 2 or 3 years.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

Okay, that makes sense. And then just 1 other question for you, Ludvig. Do you think the outcome of this clinical trial will change clinical behavior and it's sort of back to the question of off-label use and I know it's hard to quantify, but to the degree that there is off-label use going on and there's certainly some, do you think that this trial will change clinical behavior?

Ludwig N. Hantson

So I'm not going to speculate on that. So it's the physicians' decision whether or not those patients are being treated with IG. Baxter is not promoting this off-label. So I don't want to speculate on what the situations are going to do here.

Operator

Our final question comes from Matthew Taylor with Barclays.

Matthew Taylor - Barclays Capital, Research Division

I wanted to just follow-up on a couple of things that have been discussed. But I wanted to know, regarding the dose dependency, have you done or are you aware of any data that would suggest that a higher dose than 400 would have an increased effect? I'm just curious as to whether you know anything about, I guess, the breakpoint above 400?

Ludwig N. Hantson

No, we don't. That's the short answer. It would be speculating. Yes.

Matthew Taylor - Barclays Capital, Research Division

Okay. And I'm just curious, as you go through this Phase III data, I mean, clearly, the signal was a little bit different than the Phase II data and some data that we've seen in other trials. I guess, how would you be able to kind of parse through the impact in the different groups, given that we saw ApoE4 in moderate here, and in some prior trials, we've seen more of an impact in the mild patients?

Ludwig N. Hantson

Well, I don't have an answer -- a straightforward answer for you. This is the biggest study that we've done with this formulation. So as I mentioned, I look at this study almost as becoming a larger Phase II study, where we have to learn from. So difficult for me to speculate. I think also that ITG is not a monoclonal. So as I said, it's difficult to speculate here.

Robert J. Hombach

And I would just add, we continue to be very optimistic about the future prospects for immunoglobulin therapy in the patients we have and indications we're pursuing. Again, we think HyQ is a significant advancement for patients from a convenience standpoint and from a cost effectiveness standpoint to the overall health care system around world. We're very pleased with the progress we've made in Europe. We're very happy with the constructive dialogue we're having with the FDA in the U.S., and that's going to continue to be an important part of our differentiation strategy within IGs going forward here. So this is a franchise, despite the results of this trial, this is a franchise where we remain very focused on and very optimistic about the growth prospects for the future.

Mary Kay Ladone

Thank you, ladies and gentlemen. That does conclude today's conference. You may all disconnect, and have a wonderful day.

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Source: Baxter International Inc. - Special Call
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