Zack, On Tuesday August 24, 2010, 8:42 am EDT

Medical product giant Baxter International inc. (NYSE: BAX – News) has entered into a definitive distribution agreement with Israel-based biopharmaceuticals company Kamada ltd. under the deal, it has secured exclusive marketing rights to Kamada’s GLASSIA Alpha 1-Proteinase inhibitor in the U.S., Canada, Australia and New Zealand. .

GLASSIA, the first and only liquid, ready-to-use Alpha1-Proteinase inhibitor, is indicated for the treatment of emphysema (a lung disease) due to Alpha 1 deficiency, also known as Alpha1-Antitrypsin deficiency (AATD). the drug was approved by the U.S. Food and Drug Administration (FDA) for this indication in July 2010. Kamada expects GLASSIA to generate annual sales of roughly $40 million.

AATD is an under-diagnosed genetic disorder caused by defective production of Alpha 1-Antitrypsin (A1AT), a naturally occurring protein, leading to reduced A1AT activity in the blood and lungs. Roughly 100,000 people are estimated to have inherited AATD in the U.S. less than 10% of this population has been adequately diagnosed. Individuals with AATD may eventually develop emphysema, and sometimes, liver failure. Common symptoms of AATD are shortage of breath and cough.

The distribution deal calls for an upfront cash payment of $20 million by Baxter to Kamada and includes a provision, which prevents the latter from negotiating or agreeing for GLASSIA in other markets for an agreed period of time. Baxter has also been granted the rights to produce the drug and secure associated regulatory approvals. Moreover, the company may make additional milestone payments of up to $25 million on achievement of specific commercial and production-related landmarks and royalties (undisclosed) on future product sales.

Baxter is expected to launch GLASSIA in the U.S. during the fourth quarter of 2010. the company will pursue to obtain distribution licenses for the drug in the other countries in which it has secured commercial rights. the deal underscores Baxter’s commitment to the awareness and early diagnosis of AATD. the company sponsors the AlphaTest diagnostic kit and so far has assisted in testing more than 80,000 people for AATD.

Baxter is a leading global medical products and services company that develops, manufactures and markets products to treat hemophilia (a bleeding disorder), kidney disease and infectious diseases. the company’s main competitors are Becton, Dickinson and Company (NYSE: BDX – News) and Johnson & Johnson (NYSE: JNJ – News).

Baxter’s products are primarily life-sustaining, offering a natural hedge against soft economic conditions. However, the company faces significant risks from product recalls, which may drag its bottom line.

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