News agency Reuters earlier identified competitors Korea’s Celltrion Healthcare and Thermo Fisher Scientific of the US as interested in a takeover, along with private equity firms and regular healthcare buyers such as KKR and the Carlyle Group.

Analysts calculate that the business could fetch more than $4 billion.

In a securities filing dated Mar. 21, Celltrion confirmed that it has reviewed a potential acquisition of the Baxter business “to secure stable global production facilities” but had taken no further action.

The CMO activities with 2002 sales of $644 million, around 4% of the Baxter total, performs drug manufacturing and packaging services for biopharma companies, primarily for infused or injectable products.

Baxter supported production of the Novavax and Moderna vaccines in 2021, but revenues have begun to deteriorate as demand for the vaccines slumped. In January 2023, the company announced a restructuring scheme designed to save as much as $300 million.

In presenting financial results for the fourth quarter and full year 2022, Baxter said it was exploring alternatives that could include a potential sale of the CMO unit. At the same time, it said it planned to spin off its renal care and acute therapies businesses into an independent, publicly traded company focusing on hospital applications.

The adjustments could foresee operations split into four core business units for medical products and therapies, healthcare systems and technologies. Each would have its own management team, R&D and commercial departments, along with dedicated manufacturing sites.

Several thousands of jobs at the US company could face the ax, reports say, when the plans take effect early in the upcoming second quarter, with estimates running as high as 3,000 positions.

Baxter is expected to use the proceeds from the disposals to pay down debt incurred in its $10.5 billion acquisition of medical tech company Hill-Rom in 2021.

Author: Dede Williams, Freelance Journalist