News Feature | March 28, 2014

Baxter To Split Into Two Companies

By Marcus Johnson

Baxter International has released a statement detailing its intention to break the company into two smaller companies. One of the companies would work on medical products, while the other would work on developing new biotechnologies and other traditional pharmaceutical products. The company is expected to finalize its divide by the third quarter of 2015.

Baxter's statement says that the company is following industry trends and expects to be more efficient following the split. The company stated that their current drug division had revenues of $6 billion last year, while their medical-products division had revenues of $9 billion. Robert Parkinson Jr., chief executive officer for Baxter International, said that the division will “enhance prospects for growth in both mature and emerging markets.” Parkinson will remain the CEO of the company working on medical products.

Industry analysts and investors think that Baxter's split is a move that will help the company focus and find new opportunities. “It’s a very good move. They’ll be able to focus on businesses they do best, and unleash opportunities for franchises which could have been hidden inside a larger organization,” said Joanne Wuensch, a BMO Capital Markets analyst.

Most industry analysts believed that Baxter would remain focused on hemophilia and other bleeding disorders, which the company confirmed in a conference call. Ludwig Hansen, who will become CEO of the new biotechnology company, was quoting as saying that the company will remain hemophilia focused. He also stated that company goals include “driving scientific innovation and leveraging expertise into new therapeutic areas through acquisitions and collaborations.”