Baxter International Inc. (NYSE:BAX) is planning to offload its U.S.-based generic injectables business to British drug firm Hikma Pharmaceuticals PLC (LSE:HIK).
The deal is worth about $112 million to the Deerfield, Illinois-based company, according to a statement.
The agreement is comprised of Hikma acquisition of Baxter’s injectable products in vials and ampules, which are marketed primarily in the U.S., in addition to its Cherry Hill, New Jersey, plant and Southpoint, Tenn., distribution center. After the companies close the deal, the Baxter business will be integrated into Hikma subsidiary West-Ward Pharmaceuticals Corp. and the unit’s approximately 750 employees will also transfer, according to Baxter.
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Baxter said the divestiture is “consistent with the company’s focus on product differentiation” and will enable it to focus its resources on its “proprietary, enhanced packaging offerings and formulation technologies.” For its third quarter, the company expects to record an after-tax special charge of approximately $70 million, or $0.12 per diluted share, to write down the assets of the business, according to the company.
The medical products maker posted net income of $595 million, or $1.01 per diluted share, on sales of $3.22 billion during the three months ended Sept. 30. That compares with net income of $530 million, or 87 cents per diluted share, on sales of $3.15 billion during the same period last year, for a profit increase of 12.3 percent and a sales increase of 2.5 percent.
Baxter bought the Cherry Hill manufacturing facility in 2002, when it acquired the business from Wyeth division ESI Lederle. Sales of the unit came to about $170 million in 2009. Baxter does not expect the deal to change its earnings guidance.
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The Massachusetts Medical Devices Journal is the online journal of the medical devices industry in the Commonwealth and New England, providing day-to-day coverage of the devices that save lives, the people behind them, and the burgeoning trends and developments within the industry.
