PRESS RELEASE: Baxter Awarded Pandemic Advanced Supply Contract from the Department of Health

Baxter will manufacture its pandemic vaccine in a serum-free, vero cell-based system, at one of the largest cell culture vaccine facilities in the world. The use of vero cell culture, rather than conventional egg-based technology, offers several advantages. Baxter's vero cell culture process can be initiated more rapidly due to its use of a "native" virus that does not need to be modified to allow growth in eggs, thus accelerating vaccine availability. Vaccines produced using this process can 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 replicable high yields, providing the company with the flexibility to quickly respond to emerging variant pandemic virus strains.

"We are proud to provide the necessary technology, manufacturing capability and other resources to assist the Department of Health in its efforts to protect the UK population from the threat of a flu pandemic," said Kim Bush, president of Baxter's vaccines business.

Baxter is conducting clinical testing of the adjuvant-free candidate H5N1 (avian) influenza vaccine. A Phase I/II study in Europe indicated that study subjects administered Baxter's H5N1 candidate vaccine developed excellent antibody responses at doses as low as 3.75 micrograms and substantial levels of cross immunity against widely divergent H5N1 strains. In the study, the tolerability profile of Baxter's H5N1 candidate appeared to be similar to that of seasonal flu vaccines. Baxter recently completed enrollment in a 550 subject Phase III trial of the H5N1 candidate vaccine for mock-up licensure in Europe, with data from this clinical study expected to be available in late 2007. By this time, Baxter is planning to initiate an additional large Phase III clinical study intended to satisfy all European requirements for pre-pandemic licensure. 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 in the United States.

Baxter's candidate vaccine's antigen composition and structure closely resembles the actual pathogen circulating in nature. The candidate vaccine induces an immune response that is similar to the body's defense against a natural virus, without the need to incorporate additional agents (adjuvants) to enhance immune response. It is believed that adjuvants may contribute to additional side effects in vaccines.

Supporting Pandemic Preparedness

In addition to pursuing a rapid 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.

About Baxter

Baxter International Inc., through its subsidiaries, assists healthcare professionals and their patients with the treatment of complex medical conditions, including cancer, hemophilia, immune disorders, kidney disease and trauma. The company applies its expertise in medical devices, pharmaceuticals and biotechnology to make a meaningful difference in patients' lives.

This release includes forward-looking statements concerning the company's vaccine products, including with respect to clinical trials, additional stockpiles, 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: 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; and other risks identified in the company's most recent filing on Form 10-Q and other SEC filings, all of which are available on the company's web site. The company does not undertake to update its forward-looking statements.