Baxter International Inc. Under Investigation Over Possible Securities Laws Violation

An investigation on behalf of investors in Baxter International Inc. (NYSE:BAX) stock over possible securities laws violations by Baxter Intl. and others was announced.

Baxter International Inc, located in Deerfield, IL, through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. Baxter International Inc. reported in 2007 Total Revenue of $11.263billion, in 2008 $12.348billion, and in 2009 $12.562billion. According to the investigation by a law firm the investigation focuses on the following announcements by Baxter International Inc. (BAX).

On April 22, 2010, Baxter Intl. Inc. issued a press release reporting its first quarter 2010 financial results and cut its full year forecast due to health reform costs and a weaker plasma protein market. The press release by Baxter Intl from April 22, 2010 stated, in part, the following: “Previously, Baxter expected full-year 2010 sales growth, excluding the impact of foreign exchange, of 5 to 7 percent (or 7 to 9 percent including foreign exchange); full-year earnings per diluted share of $4.20 to $4.28 per share, before any special items; and cash flow from operations of approximately $2.9 billion. For full-year 2010, Baxter’s revised outlook includes sales growth, excluding the impact of foreign exchange, of 1 to 3 percent (or 3 to 5 percent including the benefit of foreign exchange) and earnings, before any special items, of $3.92 to $4.00 per diluted share. This outlook now includes the full-year impact of U.S. healthcare reform legislation enacted in the first quarter. In addition, Baxter now expects to generate cash flows from operations of approximately $2.7 billion” On April 22, 2010, Baxter International’s common stock (BAX) declined by $7.82 per share, about 13.3%, to close at $51.13 per share on substantially greater than average volume.

On May 3, 2010 Baxter International announced that it was recalling COLLEAGUE infusion pumps from the U.S, market pursuant to an order under its existing June 2006 consent decree. According to news reports, the FDA had on April 30 rejected a plan by Baxter Intl. Inc. to keep the infusion pumps in use until 2013 and ordered the recall. BAX stock continue to decline from $47.50 on May 03, 2010 to $43.39 on May 17, 2010, when Baxter announced a voluntary recall of all manufactured lots of HYLENEX recombinant as a precautionary measure due to instances of particulate matter observed in a limited number of vials during routine stability testing. Since May 17, 2010, shares of Baxter International Inc. (BAX) continued to decline to $40.67 per share on May 21, 2010, and recently traded at $41.50 per share, down from its 52weekHigh of $61.88 per share, and over $71 per share in 2008.