Baxter International Inc. (BAX) plans to open a new global innovation and research and development (R&D) center for its new spun-off biopharmaceuticals business, Baxalta Incorporated, in Cambridge, MA.
Baxter has chosen the Cambridge biotech community for its global innovation and R&D operations. The center will help the company provide better patient care by developing its product pipeline.
Baxter is looking forward to bring about 400 R&D employees as well as business development, oncology and biosimilars teams at the innovation center. The R&D positions are now located in California and Europe, all of which will relocate to the new center.
However, Baxter will keep its R&D operations in Vienna, Austria. It will also have its corporate headquarters in northern Illinois.
Baxter anticipates opening the first phase of the 200,000-square feet facility in leased space later this year. It will continue to transition work to the new facility over the next couple of years to ensure continuity of current programs.
In March this year, Baxter had announced plans to split-up its biopharmaceuticals and medical device segments into two independent companies in order to put greater management focus on the two businesses, effectively commercialize product offerings, efficiently allocate resources to high growth areas, and bring flexibility in deciding on growth and investment strategies.
Baxter’s biopharmaceuticals/bioscience division will focus on immune deficiencies and blood-related disorders and includes the plan to form a partnership or sale of its drug development programs based on the flu and Lyme diseases.
Ludwig N. Hantson – the current president of BioScience division – will be named as the CEO of the new biopharmaceuticals company. Baxter director Wayne T. Hockmeyer will serve as non-executive chairman of the new unit.
Baxter’s medical products division manufactures intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, infusion pumps, and inhalation anesthetics.
The medical products business contributed $8.7 million or 57% to Baxter’s overall revenues in 2013. The business will continue to integrate the $4 billion acquisition of Swedish dialysis maker Gambro AB, completed last September, which complements its existing renal therapies franchise.
Baxter’s current CEO and chairman, Robert L. Parkinson Jr., will lead the medical products business in the future, retaining its international name.
Baxter expects to complete splitting up the business in mid-2015. The transaction will take the form of a tax-free distribution to the company’s shareholders of a new publicly traded stock in the new biopharmaceuticals company.
Baxter expects to incur one-time charges due to the split up during the reporting periods preceding the separation. However, the company does not expect it to impact the financial guidance for 2014.
Some well-performing stocks in the medical products industry include ICU Medical, Inc. (ICUI), LeMaitre Vascular, Inc. (LMAT), and ZELTIQ Aesthetics, Inc. (ZLTQ).
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