Baxter International to spin off biopharma business in 2015

US drug and medical-products maker Baxter International yesterday said that it would spin off its biopharmaceuticals business into a publicly traded company by the middle of next year and focus on its core medical technology business.

With 2013 annual revenues of around $6 billion, Baxter's biopharmaceuticals business has a diverse portfolio of recombinant and plasma-based proteins to treat haemophilia 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.

Its medical products business, which had annual sales of more than $9 billion in 2013, has a broad portfolio of 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.

This business is also integrating the Gambro AB acquisition, which complements Baxter's existing renal therapies franchise.

The Illinois-based company said that the medical products company will focus on strengthening its market leadership through geographic expansion and increased penetration, leveraging its extensive hospital presence and global footprint.

The corporate headquarters of both companies will be located in northern Illinois and Robert Parkinson, Jr., will be chairman and CEO of the medical products company, retain the Baxter International name.

Ludwig Hantson, who currently serves as president, BioScience, will be the CE of the new biopharmaceuticals company, which will be named at a later date.

Baxter has an established history of executing successful spinoffs, and has continued to evaluate the separation of these two businesses in response to diverging business dynamics and the rapidly changing macro-environment, said Parkinson.

Baxter had earlier spun off other companies, including Edwards Lifesciences Corp, Caremark Corp and Allegiance Healthcare Corp.

The spin off is similar to Abbott Laboratories-spun off AbbVie Inc last year, a trend that is gaining popularity with US energy and  pharmaceutical companies.