COVINGTON — With construction ongoing at the manufacturing campus in Covington, Baxter International announced last week that it will split into two separate, independent global health care companies.
The decision to divide won’t affect the new facility coming to Newton County, but instead will give an opportunity to grow independently in the medical products and BioScience fields, according to Baxter executives.
“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., chairman and chief executive officer, in a press release. “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, health care providers and other key stakeholders.”
The biopharmaceuticals business brought in roughly $6 billion in 2013. This business’ strategy is aimed at improving diagnosis, treatment and standards of care across a wide range of bleeding disorders and chronic diseases.
The medical products business reported $9 billion in annual sales in 2013. The medical products company will focus on strengthening its market leadership through geographic expansion and increased penetration, developing comprehensive solutions to improve patient outcomes and safety, and enhancing profitability through a more streamlined and flexible cost structure.
The announcement “represents a significant milestone that will result in material benefits for key stakeholders,” said Ludwig N. Hantson, Ph.D., president, BioScience. “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.”
Both companies will be headquartered in Illinois. Parkinson will serve as chairman and chief executive officer of the medical products company, which will keep the Baxter International name. The biopharmaceuticals business has yet to be named, but will be overseen by Hantson.