|Baxter CEO Robert Parkinson|
This year will be a rocky one for Baxter International ($BAX) as it aims to spin out its biopharmaceuticals business by mid-year to focus more closely on its diabetes-driven medical products. The new biopharma company already has been named Baxalta and its executives have been disclosed. Baxter declined to offer 2015 guidance for either of the companies.
But by 2016, Baxter expects to really focus and ramp up growth. "While 2015 will be a challenging year, momentum in the core business is building and we remain excited about our future prospects and we're poised for improved performance in 2016 and beyond," summed up Baxter chairman and CEO Robert Parkinson on an earnings call.
Its biopharma business grew by 7% in 2014 to $6.7 billion, while medical products added 15% to $10 billion. The company chalked up the strength in medical products to "strong U.S. performance across intravenous therapies, specialty pharmaceuticals, and products to treat end-stage renal disease," according to a statement.
After the split, Baxter will be largely focused on the dialyzer business it acquired when it bought Gambro in September 2013 for $4 billion. The company has previously said it needs to ramp up manufacturing to meet dialyzer demand and that it will invest about $600 million to expand production capacity.
The Gambro business had sales of more than $1.6 billion in 2014, an increase of 2%.
The acquisition combined Gambro's renal portfolio with Baxter's own home-based peritoneal dialysis therapy. It's ramping up manufacturing capacity to support both of these.
- here is the release