Baxter International Inc. Q2 2008 Earnings Call Transcript

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2008-07-17 09:41:16.0

Tags: Baxter International Inc.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Larry Keusch with Goldman Sachs.

Larry Keusch - Goldman Sachs

Hi. Good morning, everyone.

Bob Parkinson

Good morning, Larry.

Rob Davis

Good morning, Larry.

Larry Keusch - Goldman Sachs

So just a couple of quick questions here. First, I am wondering, Bob, if you are willing at this point to give us any details on the protocol for the Phase III study for IVIG in Alzheimer's?

Bob Parkinson

Not, this morning, Larry. As I mentioned, we are still working through receiving the approval in the IND from the FDA. I think that is progressing very well, but until there is more definition in that regard, we are not going to communicate anything, but you will learn more about that later.

Larry Keusch - Goldman Sachs

Okay. And then two other questions. First, Rob, you talked a little bit about the rising commodity costs. Could you just run us again through where you see that most acutely in your business, and I think when we saw you last, you had made some comments that you might start to pass that on to the end users, and if you could just walk us through that?

And then the second question really is in the current economic environment, now I am talking about collections for plasma. Are you seeing either any changes in the number of folks coming through willing to donate or are you being able to change your cost structure in any way, just wanted to get some sense on that side.

Rob Davis

Sure. On the raw material price side obviously, it hits us most in our freight and distribution area in the delivery of products, both to our distributors as well as to the home for our Renal business. But, if you look at it, and we spent a fair bit of time over the last several weeks really digging deep into this, it actually is not material for the company going into the rest of the year, either at a gross margin or at an SG&A line.

In fact, coming into the first half of the year, we’ve largely offset all of the cost increases through ongoing manufacturing efficiencies and VIP programs. There might be a slight cost increase in the back half, but again it is immaterial to the total results, and I think that is a testament to what our manufacturing people have been able to do.

 

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