Baxter picks HQ for biopharma spinoff, and it's just up the road

Ludwig Hantson

Baxter's ($BAX) biopharma unit may be on track to spin off later this year, but it's not going far--geographically speaking, that is.

The new company, Baxalta, will set up camp in Bannockburn, IL, less than 6 miles up I-94 from Baxter's Deerfield headquarters. The long-term lease agreement for its 260,000-square-foot-building extends for more than a decade, Baxter said Monday.

"Selecting Baxalta's global headquarters is a key milestone on our journey to becoming a leading, independent biopharmaceutical company, and reaffirms our commitment to Northern Illinois and our strong employee base here," future Baxalta chief Ludwig Hantson said in a statement.

While the two companies may share a relative locale, they'll look pretty different after the split. Baxter will house the company's $9 billion medical products business, and Baxalta's $6 billion in annual revenue will come largely from its immunology and bleeding disorders products.

But Baxalta will need some help from its pipeline if it wants to stay competitive in the hemophilia arena. Last year, Biogen Idec ($BIIB) released two long-acting drugs--one each for hemophilia A and hemophilia B--and priced them on par with Baxter's older, less convenient therapies to encourage patient switching. Other companies, Germany's Bayer among them, have their own long-acting contenders in the works, too.

Baxalta's own lineup of up-and-comers will include BAX 855--a long-acting hemophilia A treatment, based on its flagship Advate, that the company submitted to the FDA in December--as well as a factor VIIa program in late-stage studies and an early-stage gene therapy program. Unlike its corporate base, Baxalta's research activities will be centered in Cambridge, MA, where Baxter inked a lease for a 200,000-square-foot facility last September.

- read Baxter's release

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