BAXTER TRAVENOL IS GOING GENERIC ROUTE TO HOSPITAL DRUG BUSINESS: COMPANY BUYS ASCOT AND ANNOUNCES INTENT TO SELL AMERICAN CRITICAL CARE & FLINT

Baxter Travenol is switching from proprietary drug development to the generic business for its Rx drug focus in the hospital market. On April 2, Baxter Travenol announced that "it is considering divestiture of its two proprietary pharmaceutical units as part of a strategic realignment following the company's recent merger with American Hospital Supply Corp." Although the two businesses are "highly profitable and fast-growing," Baxter said, "we currently lack the critical mass necessary to achieve a leadership position in the pharmaceutical business." That explanation echoes Richardson-Merrell's explanation for selling Merrell-Natl. in 1980 in its emphasis on the cost of staying in the R&D intensive business. While backing away from the R&D segment, Baxter Travenol is expanding its generic effort. The firm acquired Skokie, Illinois-based Ascot in late January for an undisclosed price. Baxter said Ascot, which is primarily a repackager of generic hospital products, has annual sales in the $14 mil. range. Ascot, as a distributor of various repackaged injectables, tablets and capsules, liquids, suppositories, creams, ointments, and nutrients to hospitals, is viewed as a good fit with the Travenol Labs business. Baxter has been expanding Travenol's drug business by packaging proprietary products developed by other mfrs. in a prepackaged Mini-Bag system. Ascot was formerly a subsidiary of the Filmore Packaging Co. operating under the name Ascot Hospital Pharmaceuticals. It received an FDA approval in late 1985 for an original drug, Moctanin (monooctanoin), an orphan drug for dissolving gallstones. The two divisions up for sale, American Critical Care and Flint Laboratories, "had combined sales of approximately $100 mil. in 1985," Baxter said. Annual sales of the two pharmaceutical units are roughly equivalent, according to the firm. Analysts' estimates for 1985 sales put Flint at approximately $45 mil. and American Critical Care at about $50 to $55 mil. American Critical Care's products are primarily cardiovasculars for hospital use and critical care agents. They include: Bretylol (bretylium tosylate) injection; Calciparine (heparin calcium) injection; Hespan (hetastarch in sodium chloride) injection; Intropin (dopamine HCl) injections; and Tridil (nitroglycerin) IV. In its release, Baxter identifies Intropin, Bretylol, and Tridil, as American Critical's major products. Of those, Bretylol is currently the only single-source product. The patent for bretylium tosylate expires April 29. During the last two months, LyphoMed and Internatl. Medication Systems have both received prospective approval to market the injectable. American Critical Care currently has NDAs pending for two products: the short-acting beta blocker Brevibloc (esmolol HCl) I.V. and an orphan drug, pentastarch, for white blood cell harvesting. The NDA for Brevibloc was submitted in late 1984. Baxter noted in its release that "Brevibloc, the first ultra-short-acting beta blocker," is "expected to receive FDA approval this year." The cardiovascular, according to American Critical, was classified by FDA as a 1-A drug -- a new chemical entity representing an important therapeutic gain ("The Pink Sheet" Aug. 12, p. 6). Other products in American Critical Care's pipeline include: nicardipine injectable, currently in clinicals and being developed under an agreement with Syntex which has an NDA pending for an oral form of the calcium channel blocker; flestolol sulfate, a beta blocker/anti-adrenergic in clinicals; ACC-9447, a beta-blocker for glaucoma, also in clinicals; and a pro-drug of diphenylhydantoin, being developed under an agreement with Merck. Flint's largest selling product is Synthroid (levothyroxine sodium), for use in patients with reduced or absent thyroid function. USV also markets a levothyroxine product under the trade name Levothroid. Flint's other products include Choloxin (dextrothyoxine sodium), an antilipidemic; Flint SSD (1% silver sulfadiazine cream) for burns; and Travase (sutilains) ointment for wound debridement.

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