Baxter International plans to create two separate, independent global healthcare companies, with one focused on biopharmaceuticals and the other on medical products.
"Baxter has an established history of executing successful spinoffs, and we have continued to evaluate the separation of these two businesses in response to diverging business dynamics and the rapidly changing macro-environment," said Robert L. Parkinson, Jr., chairman and CEO, in a press release.
The two businesses operate in distinct markets with corresponding underlying fundamentals, and each possesses unique growth prospects, investment requirements, and risk profiles. The spinoff will create two independent companies with strong balance sheets, investment grade profiles, and disciplined approaches to capital allocation. In addition, Baxter believes that the separation will result in greater management focus on the distinct businesses of biopharmaceuticals and medical products, and the ability to drive innovation, pursue growth strategies, and more effectively commercialize new and existing product offerings.
The biopharmaceuticals business, with 2013 annual revenues of approximately $6 billion, consists of a portfolio of recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders and plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions. The business strategy is aimed at improving diagnosis, treatment, and standards of care across a wide range of bleeding disorders and chronic diseases, enhancing capacity to meet growing demand for biotherapeutics, leveraging expertise into new emerging therapeutics through acquisitions and collaborations, and developing a robust new product pipeline focused on new and effective treatments that address unmet medical needs.
The medical products business, with 2013 annual sales of more than $9 billion, offers a broad portfolio of intravenous (IV) solutions and nutritional therapies, drug delivery systems and administration sets, premixed and other injectable drugs, as well as inhalation anesthetics and hospital-based biosurgery products. The business recently acquired Gambro AB, a global provider and leader of dialysis products; this portfolio complements Baxter's existing renal therapies franchise. The medical products company will focus on strengthening its market leadership through geographic expansion and increased penetration, developing comprehensive solutions to improve patient outcomes and safety, and creating a more streamlined and flexible cost structure.
The corporate headquarters of both companies will be located in northern Illinois. Robert L. Parkinson, Jr., will serve as chairman and CEO of the medical products company, which will retain the Baxter International name. Ludwig N. Hantson, PhD, who currently serves as president, BioScience, will be named CEO of the new biopharmaceuticals company, which will be named at a later date. Wayne T. Hockmeyer, PhD, who joined Baxter's board in 2007, has agreed to serve as non-executive chairman of the board of the new biopharmaceuticals company. Dr. Hockmeyer founded MedImmune and served as its chairman and CEO. The transaction is expected to be completed by mid-year 2015, subject to market, regulatory, and certain other conditions.
Source: Baxter International