Baxter International Inc. (NYSE: BAX) today announced final Phase I/II data for its adjuvant-free investigational pandemic H5N1 influenza vaccine and plans to initiate a Phase III clinical trial of the candidate vaccine in Europe to confirm the study results.

The Phase I/II study indicated that Baxter"e;s H5N1 candidate vaccine is highly immunogenic at low doses, and induces substantial levels of cross immunity against widely divergent H5N1 strains. The open-label, multi-center Phase III trial is designed to evaluate the safety and efficacy of Baxter"e;s adjuvant-free, whole-virus candidate vaccine. Vaccinations will begin in the first half of this year and results of the Phase III trial are scheduled to be available by the end of 2007.

"The results of the Phase I/II clinical trial suggested that this candidate vaccine may provide protection against divergent strains of virus, even at low dose levels without an adjuvant," said John Oxford, professor of Virology, The Queen Mary School of Medicine, London, United Kingdom. "The Phase III clinical trial is designed to confirm these findings and provide a solid measure of the vaccine"e;s potential to protect a large number of people before and during a possible pandemic."

Baxter"e;s candidate H5N1 vaccine is derived from H5N1 strain A/Vietnam/1203/2004. Its antigen composition and structure closely resembles the actual pathogen circulating in nature. The candidate vaccine induces an immune response (both cell and antibody mediated) that is similar to the body"e;s defense against a natural virus, without the need to incorporate additional agents (adjuvants) to enhance immune response. It is manufactured using the company"e;s proprietary vero cell technology, which produces high-yield vaccine more quickly than traditional approaches because it is not produced in eggs. Baxter"e;s candidate vaccine is the first cell-based candidate H5N1 pandemic vaccine to undergo clinical evaluation.

Final Phase I/II Data Presented

Final data from the Phase I/II clinical trial presented last month at the IV International Symposium on Respiratory Viral Infections in Hong Kong showed the candidate vaccine to exhibit a tolerability profile similar to currently marketed, egg-based seasonal flu vaccines, while delivering high immunogenicity even at low doses. The data also showed the candidate vaccine to induce substantial levels of cross immunity against widely divergent H5N1 strains.

The Phase I/II trial tested four different antigen concentrations, ranging from 3.75?g to 30?g; 7.5?g and 15?g formulations were studied with and without adjuvant. In the 7.5?g formulation without adjuvant, the seroprotection rate (based on neutralizing antibodies) at day 42 was 76.2 percent. Immunity induced by the vaccine also neutralized divergent H5N1 virus strains like the Clade three strain A/Hong Kong/156/97, and the Clade two strain A/Indonesia/05/05.

The most common side effects observed were injection site reactions, headaches and fatigue. The minimal occurrence and low level of side effects are similar to those reported for licensed egg-based, seasonal influenza vaccines. These final data confirm the preliminary results of this study previously announced. Comprehensive analyses of the results of the Phase I/II clinical trial are currently being prepared for submission to a peer-reviewed medical journal.

"Baxter is very pleased that our development approach of using vero cell technology and a whole virus formulation is supported by these Phase I/II results. These preliminary results suggest that the vaccine produces a highly immunogenic vaccine with a favorable safety profile without the need for an adjuvant to boost the immune response. Adjuvant can add considerable cost and may have a negative effect on tolerability," said Dr. Hartmut Ehrlich, vice president of Global Research and Development for Baxter"e;s BioScience business. "A good safety profile and cross immunity against multiple viral strains is critically important for governments considering the concept of using a vaccine before, or immediately after, a pandemic breaks out."

Vero Cell Based Manufacturing Process

Baxter manufactures its pre-pandemic candidate vaccine in a vero cell based system, at one of the largest vaccine cell culture facilities in the world. The use of cell culture, rather than conventional egg-based technology, offers several advantages. Baxter"e;s vero cell process can be initiated more rapidly due to its ability to use a "native" virus that does not need to be modified to allow growth in eggs, thus accelerating vaccine production. In total, vaccines using the process could be released within approximately 12 weeks, significantly earlier than with traditional egg-based systems. In addition, all influenza strains with pandemic potential tested for growth in vero cells have produced reproducibly high yields, enabling Baxter to flexibly respond to the emerging variant pandemic virus strains.

H5N1 Vaccine Phase III trial design

The Phase III open-label trial will evaluate the safety and immune response of the H5N1 vaccine candidate in healthy volunteers in Europe. Volunteers will be administered vaccine without adjuvant, by intra-muscular injection. Recipients will be evaluated for the vaccine"e;s ability to elicit the production of antibodies to the H5N1 strain A/Vietnam /1203/2004, which is the strain used for the vaccine, and also against a number of other divergent H5N1 strains.

Further information about this trial will be posted at http://www.clinicaltrials.gov.

Pre-Pandemic Efforts

In addition to pursuing an aggressive clinical development program, Baxter is working closely with governments around the world on pandemic preparation. Baxter has already delivered several million doses of H5N1 pre-pandemic vaccine to various governments worldwide. In 2006, Baxter entered into a pandemic preparedness contract with the Austrian Ministry of Health to supply 16 million doses of pandemic influenza vaccine in the event a pandemic is declared.

Baxter is also working with the U.S. National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, in partnership with Fisher BioServices Inc., and with the U.S. Department of Health and Human Services, in partnership with DVC LLC, a Computer Science Corporation Company, to further develop vero cell culture-based candidate pandemic and seasonal influenza vaccines.

Baxter International

Baxter International Inc., through its subsidiaries, assists healthcare professionals and their patients with the treatment of complex medical conditions, including hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other conditions. The company applies its expertise in medical devices, pharmaceuticals and biotechnology to make a meaningful difference in patients"e; lives.
http://www.baxter.com

This release includes forward-looking statements concerning the company"e;s vaccine products, including with respect to clinical trials, licensures, and the advantages of the vaccine products. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: satisfaction of regulatory and other requirements for timely commencement of additional clinical trials; additional clinical results demonstrating the safety and efficacy of the products; market acceptance of vaccines developed with vero cell technology relative to egg-based or other alternatives; continued public commitment to addressing avian flu and other pandemic threats including additional experience producing such vaccines at a large scale; and other risks identified in the company"e;s most recent filing on Form 10-Q and other SEC filings, all of which are available on the company"e;s web site. The company does not undertake to update its forward-looking statements.