07.29.15
$16.7 Billion
KEY EXECUTIVES:
Robert L. Parkinson Jr., Chairman & CEO
James K. Saccaro, Corp. VP and Chief Financial Officer
Jill M. Schaaf, Corp. VP and President, Renal
Marcus Schabacker, Corp. VP and Chief Scientific Officer
Paul Vibert, Corp. VP and President, International
Brik V. Eyre, Corp. VP and President, Hospital Products
Robert Felicelli, Corp. VP, Quality
Timothy P. Lawrence, Corp. VP, Operations
NO. OF EMPLOYEES: 50,000
GLOBAL HEADQUARTERS: Deerfield, Ill.
For Baxter International Inc., the 2014 fiscal year began with a split. No, the company’s not going anywhere; it’s separating into two distinct firms. In March, the Deerfield, Ill.-based healthcare company unveiled plans to create two separate, independent life-science firms—one focused on biopharmaceuticals and the other on medical products.
“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 CEO. “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, healthcare providers, and other key stakeholders.”
According to company officials, the spinoff would create two, “well-capitalized independent companies with strong balance sheets, investment grade profiles, and disciplined approaches to capital allocation.”
Baxter’s brass said the separation would result in other benefits, including:
Baxter’s BioScience division consisted of a portfolio of recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders, and plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions.
“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,” said Ludwig N. Hantson, Ph.D., who was president of Baxter’s BioScience division before the spinoff.
The Medical Products business consisted of a portfolio of intravenous (IV) solutions and nutritional therapies, drug delivery systems and administration sets, premixed and other injectable drugs, as well as inhalation anesthetics and hospital-based biosurgery products. This business also integrated the Swedish firm Gambro AB, which Baxter purchased in 2012 for $12 billion (the largest acquisition in Baxter’s more than 80-year history) and complemented the company’s existing renal therapies franchise.
The corporate headquarters of both companies will be located in northern Illinois.
Parkinson will serve as chairman and CEO of the medical products company, which will retain the Baxter International name. Hantson is CEO of the new biopharmaceuticals company, which was dubbed Baxalta (a combination of the Baxter name and a derivative of “altus,” which is Latin for “high” or “profound”). The division became official on July 1 of this year when Baxalta began trading as an independent company on the New York Stock Exchange under the ticker symbol “BXLT.” The split came via a tax-free distribution to Baxter shareholders of the new publicly traded stock.
Hantson joined Baxter in 2010 from Novartis Pharmaceuticals Corporation, where he served in a number of roles of increasing responsibility, the most recent of which was CEO, Pharma North America. Prior to Novartis, Hantson spent 13 years at Johnson & Johnson.
Wayne T. Hockmeyer, Ph.D., who joined Baxter’s board in 2007, serves as non-executive chairman of the board of Baxalta. Hockmeyer founded MedImmune Inc., and served as its chairman and chief executive officer.
This wasn’t the first time Baxter has spun off parts of itself. Other companies that Baxter has spun off in the past three decades include Edwards Lifesciences Corp., Caremark Corp., and Allegiance Healthcare Corp. It’s also part of a larger industry trend of refocusing on core businesses. Baxter’s Illinois neighbor, Abbott Laboratories, spun off its pharmaceutical arm to create a new firm—AbbVie Inc.
Once the split took place, Baxter separated into two new global business units: Hospital Products and Renal. The Hospital Products business manufactures products used in the delivery of fluids and drugs to patients across the continuum of care, including IV and other sterile solutions and administration sets, premixed drugs and drug-reconstitution systems, IV nutrition products, infusion pumps, and inhalation anesthetics. The business also provides products and services related to pharmacy compounding, drug formulation, and packaging technologies. The Renal portfolio addresses the needs of patients with kidney failure or kidney disease, and their healthcare providers, with a comprehensive range of therapeutic options across home, in-center, and hospital settings for better individualized care. The portfolio includes technologies and therapies for peritoneal dialysis, in-center and home hemodialysis, continuous renal replacement therapy, multi-organ extracorporeal support therapy, and additional dialysis services. Baxter’s research and development efforts also are pursuing a range of next-generation monitors, dialyzers, devices, dialysis solutions, and connectivity technology for home patients.
On the new product front in the medical products sector in FY14, the company received 510(k) clearance from the U.S. Food and Drug Administration in May for its next-generation Sigma Spectrum Infusion Pump with Master Drug Library. Enhancements to the infusion pump include increased capacity of the master drug library, which is safety software that enables a hospital to maintain a customized in-house library of facility-defined dosing parameters for infusions to minimize the likelihood of drug errors during care. In addition, new asset-tracking capabilities allow hospitals to effectively locate, manage and deploy Sigma Spectrum inventory, helping to ensure efficient allocation of hospital assets.
“Clinicians are looking for integrated systems that are efficient and cost effective, and allow hospital staff to focus on providing quality care for patients,” said Brik Eyre, president of Baxter’s Hospital Products business. “We are excited to bring the next generation of Baxter’s Sigma Spectrum Infusion Pump with Master Drug Library and its advanced, patient-centered safety technology to the U.S. marketplace.”
Infusion pumps are used throughout hospitals and other acute and chronic care settings to deliver fluids and medications. Baxter’s Sigma Spectrum Infusion Pump provides multiple safety features, including dose error reduction software and an automatic default to use of the drug safety library at the initial start of dose programming. It also offers an option for wireless connectivity to integrate data into a hospital’s electronic medical record system, to facilitate the transfer of data to and from the system for updating drug libraries, and to create continuous quality improvement reports.
Early in the fiscal year, European regulators greenlighted Baxter International’s Vivia hemodialysis system for the E.U. market. The device is designed for more comprehensive high-dose hemodialysis (HD), which can be performed during short daily sessions or at night while sleeping. The Vivia’s touchscreen interface was developed for patient use, since the system is intended to stay in the patient’s home, and instructions on the screen include graphical illustrations on setup, treatment, and cleaning. To help guarantee safety, the Vivia features a sensor that detects dislodged needles and sends a signal for the machine to stop pumping.
Additionally, as with many at-home medical devices coming to market, the Vivia features wireless connectivity to share its hemodialysis regimen data with the patient’s physician.
Baxter introduced Vivia in a limited number of European dialysis clinics in 2014 to allow patients and healthcare providers to become familiar with the system and its patient-friendly features. The company expanded the launch to other European countries this year.
“Globally, less than 1 percent of the estimated 1.9 million patients requiring hemodialysis currently perform high dose HD therapy,” said Bruce Culleton, M.D., senior medical director at Baxter. “Vivia will allow a greater number of hemodialysis patients access to high dose HD therapy in their home environment.”
As part of its filing for CE marking, Baxter submitted data from U.S. and Canadian clinical studies that evaluated the safety and efficacy of Vivia in more than 1,000 treatments.
An estimated 1.9 million end-stage kidney disease patients worldwide undergo hemodialysis, with the vast majority receiving conventional hemodialysis (CHD), which usually is performed three times a week for three to five hours per session in a center or clinic. High-dose HD therapy is a more frequent therapy, usually performed as short daily treatments at least five days per week for sessions that typically run less than four hours, or as nocturnal treatments where sessions are conducted for more than six hours while the patient sleeps. Data has shown high-dose HD therapy to improve survival and health-related quality of life compared with CHD.
For fiscal year 2014 (ended Dec. 31), Baxter’s net income totaled $2.5 billion, or $4.56 per diluted share. Compared to the prior year, excluding special items and discontinued operations, Baxter’s adjusted income from continuing operations increased 4 percent to $2.7 billion, and earnings per diluted share of $4.90 advanced 4 percent, exceeding the company’s previously issued guidance for the year. Baxter’s worldwide revenues in 2014 totaled $16.7 billion and rose 11 percent (or 13 percent excluding the impact of foreign currency). Compared to the prior year, BioScience sales of $6.7 billion grew 7 percent (or 8 percent excluding the impact of foreign currency), while Medical Products sales of $10 billion advanced 15 percent (or 16 percent excluding the impact from foreign currency). After adjusting both periods for the contribution of Gambro, Medical Products sales increased 2 percent (or 4 percent excluding the impact of foreign currency) on a full-year basis.
In April this year, Baxter announced plans to expand its medical device plant in Mountain Home, Ark.
Baxter will add 25,000 square feet and undisclosed equipment at the facility, spokeswoman Deborah Spak said. She did not disclose the cost of the project, due for completion later this year.
The Mountain Home factory, one of the largest in Baxter’s medical products division, has 550,000 square feet and employs about 900 workers. When the expansion is done, employment will rise by about a dozen. The facility has been a medical-oriented operation since 1964.
Spak noted the Mountain Home expansion is typical of Baxter’s frequent upgrades and expansions to “ensure that we are operating in a manner that delivers high quality products as well as efficiency and responsiveness to customer demands.” She did not disclose the types of medical devices made in the Arkansas plant. The Medical Products unit’s applications include intravenous equipment and nutrition products, drug reconstitution systems, infusion pumps and inhalation anesthetics.
In late summer last year, Baxter announced an expansion at its Opelika, Ala., manufacturing location that will cost $300 million. The project is focused on boosting production capacity for dialyzers, a component for hemodialysis therapy needed by patients with kidney failure. The unit will add more injection molding equipment and more than double current staff levels by about 170. Baxter is targeting project completion in 2016.
KEY EXECUTIVES:
Robert L. Parkinson Jr., Chairman & CEO
James K. Saccaro, Corp. VP and Chief Financial Officer
Jill M. Schaaf, Corp. VP and President, Renal
Marcus Schabacker, Corp. VP and Chief Scientific Officer
Paul Vibert, Corp. VP and President, International
Brik V. Eyre, Corp. VP and President, Hospital Products
Robert Felicelli, Corp. VP, Quality
Timothy P. Lawrence, Corp. VP, Operations
NO. OF EMPLOYEES: 50,000
GLOBAL HEADQUARTERS: Deerfield, Ill.
For Baxter International Inc., the 2014 fiscal year began with a split. No, the company’s not going anywhere; it’s separating into two distinct firms. In March, the Deerfield, Ill.-based healthcare company unveiled plans to create two separate, independent life-science firms—one focused on biopharmaceuticals and the other on medical products.
“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 CEO. “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, healthcare providers, and other key stakeholders.”
According to company officials, the spinoff would create two, “well-capitalized independent companies with strong balance sheets, investment grade profiles, and disciplined approaches to capital allocation.”
Baxter’s brass said the separation would result in other benefits, including:
- Greater management focus on the distinct businesses of biopharmaceuticals and medical products;
- Ability to more effectively commercialize new and existing product offerings;
- Ability to drive innovation across the franchises and allocate necessary resources to the areas presenting the highest growth potential; and
- Flexibility to pursue respective growth and investment strategies resulting in revenue acceleration, improved profitability and enhanced returns.
Baxter’s BioScience division consisted of a portfolio of recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders, and plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions.
“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,” said Ludwig N. Hantson, Ph.D., who was president of Baxter’s BioScience division before the spinoff.
The Medical Products business consisted of a portfolio of intravenous (IV) solutions and nutritional therapies, drug delivery systems and administration sets, premixed and other injectable drugs, as well as inhalation anesthetics and hospital-based biosurgery products. This business also integrated the Swedish firm Gambro AB, which Baxter purchased in 2012 for $12 billion (the largest acquisition in Baxter’s more than 80-year history) and complemented the company’s existing renal therapies franchise.
The corporate headquarters of both companies will be located in northern Illinois.
Parkinson will serve as chairman and CEO of the medical products company, which will retain the Baxter International name. Hantson is CEO of the new biopharmaceuticals company, which was dubbed Baxalta (a combination of the Baxter name and a derivative of “altus,” which is Latin for “high” or “profound”). The division became official on July 1 of this year when Baxalta began trading as an independent company on the New York Stock Exchange under the ticker symbol “BXLT.” The split came via a tax-free distribution to Baxter shareholders of the new publicly traded stock.
Hantson joined Baxter in 2010 from Novartis Pharmaceuticals Corporation, where he served in a number of roles of increasing responsibility, the most recent of which was CEO, Pharma North America. Prior to Novartis, Hantson spent 13 years at Johnson & Johnson.
Wayne T. Hockmeyer, Ph.D., who joined Baxter’s board in 2007, serves as non-executive chairman of the board of Baxalta. Hockmeyer founded MedImmune Inc., and served as its chairman and chief executive officer.
This wasn’t the first time Baxter has spun off parts of itself. Other companies that Baxter has spun off in the past three decades include Edwards Lifesciences Corp., Caremark Corp., and Allegiance Healthcare Corp. It’s also part of a larger industry trend of refocusing on core businesses. Baxter’s Illinois neighbor, Abbott Laboratories, spun off its pharmaceutical arm to create a new firm—AbbVie Inc.
Once the split took place, Baxter separated into two new global business units: Hospital Products and Renal. The Hospital Products business manufactures products used in the delivery of fluids and drugs to patients across the continuum of care, including IV and other sterile solutions and administration sets, premixed drugs and drug-reconstitution systems, IV nutrition products, infusion pumps, and inhalation anesthetics. The business also provides products and services related to pharmacy compounding, drug formulation, and packaging technologies. The Renal portfolio addresses the needs of patients with kidney failure or kidney disease, and their healthcare providers, with a comprehensive range of therapeutic options across home, in-center, and hospital settings for better individualized care. The portfolio includes technologies and therapies for peritoneal dialysis, in-center and home hemodialysis, continuous renal replacement therapy, multi-organ extracorporeal support therapy, and additional dialysis services. Baxter’s research and development efforts also are pursuing a range of next-generation monitors, dialyzers, devices, dialysis solutions, and connectivity technology for home patients.
On the new product front in the medical products sector in FY14, the company received 510(k) clearance from the U.S. Food and Drug Administration in May for its next-generation Sigma Spectrum Infusion Pump with Master Drug Library. Enhancements to the infusion pump include increased capacity of the master drug library, which is safety software that enables a hospital to maintain a customized in-house library of facility-defined dosing parameters for infusions to minimize the likelihood of drug errors during care. In addition, new asset-tracking capabilities allow hospitals to effectively locate, manage and deploy Sigma Spectrum inventory, helping to ensure efficient allocation of hospital assets.
“Clinicians are looking for integrated systems that are efficient and cost effective, and allow hospital staff to focus on providing quality care for patients,” said Brik Eyre, president of Baxter’s Hospital Products business. “We are excited to bring the next generation of Baxter’s Sigma Spectrum Infusion Pump with Master Drug Library and its advanced, patient-centered safety technology to the U.S. marketplace.”
Infusion pumps are used throughout hospitals and other acute and chronic care settings to deliver fluids and medications. Baxter’s Sigma Spectrum Infusion Pump provides multiple safety features, including dose error reduction software and an automatic default to use of the drug safety library at the initial start of dose programming. It also offers an option for wireless connectivity to integrate data into a hospital’s electronic medical record system, to facilitate the transfer of data to and from the system for updating drug libraries, and to create continuous quality improvement reports.
Early in the fiscal year, European regulators greenlighted Baxter International’s Vivia hemodialysis system for the E.U. market. The device is designed for more comprehensive high-dose hemodialysis (HD), which can be performed during short daily sessions or at night while sleeping. The Vivia’s touchscreen interface was developed for patient use, since the system is intended to stay in the patient’s home, and instructions on the screen include graphical illustrations on setup, treatment, and cleaning. To help guarantee safety, the Vivia features a sensor that detects dislodged needles and sends a signal for the machine to stop pumping.
Additionally, as with many at-home medical devices coming to market, the Vivia features wireless connectivity to share its hemodialysis regimen data with the patient’s physician.
Baxter introduced Vivia in a limited number of European dialysis clinics in 2014 to allow patients and healthcare providers to become familiar with the system and its patient-friendly features. The company expanded the launch to other European countries this year.
“Globally, less than 1 percent of the estimated 1.9 million patients requiring hemodialysis currently perform high dose HD therapy,” said Bruce Culleton, M.D., senior medical director at Baxter. “Vivia will allow a greater number of hemodialysis patients access to high dose HD therapy in their home environment.”
As part of its filing for CE marking, Baxter submitted data from U.S. and Canadian clinical studies that evaluated the safety and efficacy of Vivia in more than 1,000 treatments.
An estimated 1.9 million end-stage kidney disease patients worldwide undergo hemodialysis, with the vast majority receiving conventional hemodialysis (CHD), which usually is performed three times a week for three to five hours per session in a center or clinic. High-dose HD therapy is a more frequent therapy, usually performed as short daily treatments at least five days per week for sessions that typically run less than four hours, or as nocturnal treatments where sessions are conducted for more than six hours while the patient sleeps. Data has shown high-dose HD therapy to improve survival and health-related quality of life compared with CHD.
For fiscal year 2014 (ended Dec. 31), Baxter’s net income totaled $2.5 billion, or $4.56 per diluted share. Compared to the prior year, excluding special items and discontinued operations, Baxter’s adjusted income from continuing operations increased 4 percent to $2.7 billion, and earnings per diluted share of $4.90 advanced 4 percent, exceeding the company’s previously issued guidance for the year. Baxter’s worldwide revenues in 2014 totaled $16.7 billion and rose 11 percent (or 13 percent excluding the impact of foreign currency). Compared to the prior year, BioScience sales of $6.7 billion grew 7 percent (or 8 percent excluding the impact of foreign currency), while Medical Products sales of $10 billion advanced 15 percent (or 16 percent excluding the impact from foreign currency). After adjusting both periods for the contribution of Gambro, Medical Products sales increased 2 percent (or 4 percent excluding the impact of foreign currency) on a full-year basis.
In April this year, Baxter announced plans to expand its medical device plant in Mountain Home, Ark.
Baxter will add 25,000 square feet and undisclosed equipment at the facility, spokeswoman Deborah Spak said. She did not disclose the cost of the project, due for completion later this year.
The Mountain Home factory, one of the largest in Baxter’s medical products division, has 550,000 square feet and employs about 900 workers. When the expansion is done, employment will rise by about a dozen. The facility has been a medical-oriented operation since 1964.
Spak noted the Mountain Home expansion is typical of Baxter’s frequent upgrades and expansions to “ensure that we are operating in a manner that delivers high quality products as well as efficiency and responsiveness to customer demands.” She did not disclose the types of medical devices made in the Arkansas plant. The Medical Products unit’s applications include intravenous equipment and nutrition products, drug reconstitution systems, infusion pumps and inhalation anesthetics.
In late summer last year, Baxter announced an expansion at its Opelika, Ala., manufacturing location that will cost $300 million. The project is focused on boosting production capacity for dialyzers, a component for hemodialysis therapy needed by patients with kidney failure. The unit will add more injection molding equipment and more than double current staff levels by about 170. Baxter is targeting project completion in 2016.