Baxter says it will spin out its pharma business to form two separate companies by 2015.
Baxter International announced late last week it intends to separate its biopharmaceutical business from its legacy medical product business in a move some commentators have viewed as similar to 2012’s Abbott split .
Speaking on a conference call to discuss the announcement, current CEO Bob Parkinson – who will remain head of the medical product business – described the spin-out as giving the biopharmaceutical part if the company “the opportunity to enhance profits with new biopharmaceutical offerings while optimising its international commercial focus.”
Though details are still in their infancy, CFO Bob Hombach said the split would be made easier due to the two sectors already having two very distinct manufacturing networks.
“While there may be some operating dilution right at the time of spin we think over several years there will be cost structure, streamlining, as well as other margin improvement opportunities we might find through portfolio mix.”
However, current President of BioScience, Ludwig Hantson - named CEO of the second company - added Baxter’s pharma division intended to continue to enhance its “manufacturing capacity footprint with internal expansion and external collaborations,” citing the building of a new plasma site in Covington, Georgia, as an example of this strategy.
The medical product business will retain the Baxter name and the new business name will be decided upon in the future.