Baxter International said today it will spin out its biopharma business as part of a plan to split the drug-device giant into two separate companies.
The new biopharma will focus on diagnosis and treatment of blood-related conditions and chronic diseases; developing new drugs through both acquisitions and collaborations; and building a product pipeline focused on effective new treatments for unmet medical needs.
''This decision underscores Baxter's commitment to ensuring its long-term strategic priorities remain aligned with shareholders' best interests, while improving our competitive position and performance, enhancing operational, commercial and scientific effectiveness and creating value for patients, healthcare providers, and other key stakeholders,'' Robert L. Parkinson, Jr., Baxter’s chairman and CEO, said in a statement.
Parkinson will hold the same position with the medical products company. The chairman and CEO of the new biopharma spinout will be Ludwig N. Hantson, Ph.D., now Baxter’s president, BioScience.
Baxter’s spinoff comes two years after Abbott Laboratories succeeded by similarly spinning out its branded drug and drug discovery operations into AbbVie, while retaining the generic drug, diagnostic, medical implant, nutritional formula businesses.
At Baxter, the biopharma spinout starts out with the current company’s portfolio of recombinant and plasma-based proteins for hemophilia and other bleeding disorders, as well as plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock.
Baxter said it will reveal “at a later date” the name of the biopharma spinout, whose businesses generated about $6 billion in annual revenues last year for Baxter. That compares with about $9 billion for the businesses Baxter will retain as it refocuses strictly on medical products.
Those businesses, which will keep the company’s current name, include intravenous 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 new Baxter will include the operations acquired last year when the current Baxter completed its $3.9 billion purchase of Gambro, the Swedish-owned global medical technology company, with the idea of building a portfolio of dialysis products and therapies.
Baxter said its medical products operations would capitalize on its hospital presence and global footprint to expand further and increase its product penetration, as well as to develop comprehensive solutions designed to improve patient outcomes and safety, and to enhance profitability.
The spinout is expected to be completed by mid-year 2015, subject to conditions that include final approval by Baxter’s Board of Directors, receipt of a favorable opinion and/or rulings on the nature of the transaction, and the effectiveness of a Form 10 registration statement to be filed with the U.S. Securities and Exchange Commission.
The spinout will entail a tax-free distribution to Baxter shareholders of a new publicly-traded stock in the new biopharma. Its leadership will include a non-executive chairman, Wayne T. Hockmeyer, Ph.D., the founder and former chairman and CEO of MedImmune. Dr. Hockmeyer joined Baxter's board in 2007.
Baxter said it expects to incur unspecified one-time charges related to the deal during reporting periods preceding the spinout, adding that it does not otherwise expect the deal to impact its financial guidance for 2014.
The corporate headquarters of both companies will be located in northern Illinois, according to Baxter.
