Baxter Announces Divestiture of U.S. Generic Injectables Business to Hikma Pharmaceuticals
DEERFIELD, Ill.--(BUSINESS WIRE)--Oct 29, 2010 - Baxter International Inc. (NYSE:BAX) announced today that it has entered into a definitive agreement to divest its U.S. generic injectables business to Hikma Pharmaceuticals PLC (LSE:HIK). The consideration for the divestiture arrangement totals approximately $112 million, subject to closing adjustments. The sale of this business will allow Baxter to redirect resources toward its proprietary, enhanced packaging offerings and formulation technologies, consistent with the company's focus on product differentiation. Baxter expects to record an after-tax special charge in the third quarter of approximately $70 million (or $0.12 per diluted share), principally to write down the assets of the business.
Hikma will acquire Baxter's high-volume, generic injectable products in vials and ampoules, which are sold primarily in the United States including chronic pain, anti-infective and anti-emetic products, along with the Cherry Hill, N.J., manufacturing facility, and Memphis (Southpoint), Tenn., warehouse and distribution center. Approximately 750 employees who support the business will also transfer as part of the arrangement.
“The divestiture of this business is driven by Baxter's continued focus on differentiated product offerings derived from the company's formulation technologies and enhanced packaging expertise,” said Camille Farhat, general manager of Baxter's Pharmaceuticals and Technologies business.
Baxter's U.S. “multi-source” generic injectables business will be integrated into West-Ward Pharmaceuticals Corp., the U.S. agent for, and wholly-owned subsidiary of, Hikma Pharmaceuticals PLC. Customers can expect continued product supply and service during the West-Ward transition.
West-Ward has a growing portfolio of generic products in the U.S., including dozens of products commercially available and under development. Hikma Pharmaceuticals is a fast-growing multinational group focused on developing, manufacturing and marketing a broad range of both branded and non-branded generic and in-licensed products. Subject to regulatory approvals and other conditions, the companies expect to complete the transaction within the next three months.
Baxter purchased the Cherry Hill manufacturing facility in 2002, when it acquired the business from ESI Lederle, a division of Wyeth. Sales of this business totaled approximately $170 million in 2009. The company does not expect this transaction to impact its previously-issued earnings guidance.
Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.
This release includes forward-looking statements concerning the divestiture of the company's U.S. generic injectables business. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: actions of regulatory bodies and other governmental authorities; changes in laws and regulations; failure to obtain the necessary consents or to satisfy other closing conditions; a material adverse change in the multi-source business; product quality or patient safety concerns; and other risks identified in the company's most recent filing on Form 10-K and other SEC filings, all of which are available on the company's website. The company does not undertake to update its forward-looking statements.
Contact: Baxter International Inc.
Erin Gardiner, (847) 948-4210
John O'Malley, (847) 948-3206
Mary Kay Ladone, (847) 948-3371
Clare Trachtman, (847) 948-3085
Posted: October 2010