Baxter to split in two next year

pharmafile | March 28, 2014 | News story | Medical Communications, Research and Development, Sales and Marketing AbbVie, Abbott, baxter, biopharma, gambro 

Baxter is taking a plunge into the world of restructuring by splitting into two entities: one which is yet to be named and will concentrate on pharma and the other, called Baxter International, focussing on medical products.

The split is expected to be made permanent by the middle of next year when, in a move reminiscent of Abbott’s creation of AbbVie 15 months ago, Baxter will comprise a pair of separate, independent global companies – although both will have their HQ in northern Illinois.

Baxter insists the new firms will have strong balance sheets: the drugs business brought in $6 billion in revenue last year, while its medical products division – which recently acquired dialysis specialist Gambro – accounted for more than $9 billion.

Ludwig Hantson, currently president of bioscience at Baxter will run the new unnamed biopharma firm. “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,” he says.

“Baxter has an established history of executing successful spin-offs, and we have continued to evaluate the separation of these two businesses in response to diverging business dynamics and the rapidly changing macro-environment,” explains Robert Parkinson, Baxter’s chief executive.

Parkinson will become the boss of the medical products company, and went on to say that the move would be in the best interest of shareholders, would improve Baxter’s ability to compete and would ‘create value’ for patients.

Baxter believes that the separation will offer greater management focus on the two areas, giving the companies greater potential to commercialise new and existing products.

Flexibility and the ability to innovate – and to push resources to the areas of highest growth potential – will also be improved, the company’s management thinks.

Adam Hill

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