Baxter attracts Thermo Fisher, Celltrion as potential buyers for biopharma contracting business: Reuters

Remember Baxter’s Baxalta biopharmaceutical spinoff in 2015? The Illinois company is auctioning off businesses again and has reportedly attracted several suitors.

Celltrion and Thermo Fisher Scientific have circled Baxter’s biopharma solutions business for a potential buyout, Reuters reports, citing people familiar with the matter. Private equity firms and regular healthcare buyers KKR and the Carlyle Group have also expressed interest in the business, according to Reuters.

In a securities filing (Korean) published Tuesday, Celltrion confirmed that it has indeed reviewed a potential acquisition of Baxter’s biopharma solutions business “to secure stable global production facilities” but “nothing has been confirmed,” according to a translated version of the document.

The department performs contracted services such as drug manufacturing and packaging for biopharma companies and mainly for infused or injectable products. The Baxter CMO arm signed on to help make COVID-19 vaccines by Novavax and Moderna in 2021.

Biopharma solutions pulled in $644 million in revenues for Baxter in 2022—roughly 4% of the entire company—as demand for COVID-related products declined. And the unit could fetch Baxter more than $4 billion, according to Reuters’ sources.


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Baxter named biopharma solutions as part of a restructuring launched in January. At that time, Baxter said it was exploring alternatives—including a potential sale—for the CMO business and will spin its renal care and acute therapies businesses into an independent, publicly traded company. The goal is to narrow Baxter’s focus on hospital solutions and connected care.

Gains from the separations could help Baxter pay down debt incurred in its hard-fought $10.5 billion acquisition of fellow medtech company Hill-Rom in 2021. To support the Hill-Rom deal, Baxter took on about $11.8 billion debt. As of the end of 2022, Baxter had about $1.7 billion of cash and cash equivalents but about $16.6 billion of long-term debt and other obligations.

As part of the overhaul, Baxter in February unveiled a plan to slash up to 5% of its workforce and expects to save more than $300 million in 2023. The additional measure came as Baxter recorded a net loss of $2.4 billion in 2022.

“Our priorities for cash deployment are focused on accelerating debt repayment, maintaining our dividend and resuming share repurchases over time while we continue to assess additional inorganic growth opportunities for our new streamlined operations,” Baxter’s CFO Jay Saccaro said last month in a press release about the company’s fourth-quarter earnings.

Over the past decade, Baxter has narrowed its focus. In 2014, the Illinois company sold its marketed vaccines portfolio, including a meningitis shot and a vaccine against tick-borne encephalitis, to Pfizer. Baxter in 2017 bought Claris Injectables to expand its generic injectable medicines portfolio but in 2015 spun out its biopharmaceutical therapeutics department into Baxalta.

Celltrion has been scaling up. In 2020, the South Korean company made a $453 million investment to build a new manufacturing site and R&D center in Korea to bolster its biologics capabilities. Thanks to growth from biosimilars, Celltrion’s revenue hit a record high last year to reach 2.3 trillion won ($1.75 billion).

As for Thermo Fisher, the diagnostics maker generated nearly $45 billion in revenues for 2022, up about 15% from 2021. But plummeting COVID test sales were obvious toward the latter half of the year, and the company recently disclosed a layoff round affecting 230 jobs at three manufacturing sites in California.