Baxter ($BAX) has tapped a couple of new execs for the biopharma unit it plans to spin off next year. And with new competition in one of the division’s bigger markets, its new leaders could have their work cut out for them.
Robert Hombach and John Orloff will join future CEO Ludwig Hantson in the spinoff’s C-suite, with Hombach, Baxter’s current CFO, taking his role to the new company and Orloff heading up R&D. Hombach has served in a number of finance positions since joining Baxter in 1989, and Orloff, a vet of Merck Serono and Novartis ($NVS), will bring along “significant scientific and leadership expertise,” according to Hantson.
“He will be a valuable member of our executive leadership team and a guiding force for effectively executing the development strategy for our organization,” he said in a statement.
The appointments come as Baxter prepares to take its $6 billion biopharma business solo, following in the footsteps of pharma giants like Pfizer ($PFE), Abbott ($ABT), Merck ($MRK) and Novartis that have decided to divest noncore assets and focus on what they do best. In Baxter’s case, the deal–set to wrap by mid-2015–will allow it to double down on its growing medical products operations.
That’s not to say its biopharma unit isn’t growing, too. Just Wednesday, it bought out sickle cell disease player AesRx, whose star, Aes-103, will join a pipeline that also features long-acting treatments for hemophilia.
Problem is, when it comes to the next-gen hemophilia meds, Biogen Idec ($BIIB) has already gotten there first–and its decision to price its newer, more convenient products on par with older meds could give Baxter fits. Biogen’s newcomer Eloctate, a treatment for hemophilia A, is now primed to lure patients away from the Illinois company’s Advate, which analysts estimate generated about $1.8 billion in sales last year.
Baxter will have some competition in the hemophilia B space too, with Biogen’s new Alprolix going up against its Rixubis. All in all, 58% of Baxter’s biopharma sales–or about $3.4 billion–could soon be in jeopardy, The Wall Street Journalreported in March.
Medical device and drug maker Baxter International Inc reported higher-than-expected quarterly earnings and revenue, helped by surging sales in its medical products division.
Net adjusted income rose to $692 million, or $1.26 per share in the second quarter ended June 30, from $639 million, or $1.16 per share, a year earlier.
Revenue rose about 16 percent to $4.3 billion.
Analysts on average had expected adjusted earnings of $1.22 per share, excluding items, on revenue of $4.12 billion, according to Thomson Reuters I/B/E/S.
Deerfield, Illinois-based Baxter’s stock closed at $76.60 on the New York Stock Exchange on Wednesday