Baxter to Separate BioPharma and Medical Products Businesses

Baxter International (Deerfield, IL, USA) plans to create two independent global healthcare companies, effectively separating its biopharmaceuticals and medical products.

The two businesses already operate in distinct markets with corresponding infrastructure, and each possesses unique and compelling growth prospects, investment requirements, and risk profiles. The spinoff will thus create two well-capitalized 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 other material benefits to the stand-alone companies, including improved management of more focused businesses.

Baxter’s medical products business offers a broad portfolio of intravenous (IV) solutions and nutritional therapies, drug delivery systems and administration sets, injectable drugs, inhalation anesthetics, and hospital-based surgery products. The new business will also integrate recently acquired Gambro, which complements Baxter’s existing renal therapies franchise and provides customers a comprehensive portfolio of products and services to treat end-stage renal disease across the full continuum of care.

The biopharmaceuticals business consists of a diverse 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 separation will enhance the company’s capacity to meet growing demand for biotherapeutics, leveraging its 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 separation will allow each business to have the flexibility to pursue investment strategies resulting in revenue growth, improved profitability, and enhanced returns. The corporate headquarters of both companies will be located in northern Illinois (USA). 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 of BioScience, will be named CEO of the new biopharmaceuticals company, which will be named at a later date.

”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. “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.”

“Today's news represents a significant milestone that will result in material benefits for key stakeholders,” said Ludwig N. Hantson. “We are confident that this decision not only strengthens our outlook, it positions us well to execute on our future growth prospects, new product pipeline and other opportunities as we enter a new era in the journey to achieve our aspiration as a premier biopharmaceuticals company.”

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