Baxter International Inc. Chief Executive Bob Parkinson shook up his management team, disclosing this afternoon the departure of two senior executives and a plan to combine the company’s renal and medication delivery businesses into a “single global unit.”
The move essentially turns Baxter into a company focused on two divisions: medical products and bioscience treatments. The medical products business will include medication delivery devices such as intravenous systems while the bioscience business will include drugs to treat immune system disorders and blood diseases such as its flagship drug Advate to treat people with hemophilia.
Parkinson promoted Robert Davis to the position of vice president and president of medical products, from his previous role as president of the company’s renal business, which includes devices and drugs to treat patients with kidney disease. In his new role, Davis, who is also a former Baxter chief financial officer, he will also oversee the larger medical products business. Peter Arduini, who has run the medication delivery business, is “leaving the company for another opportunity,” Baxter said in a statement.
Meanwhile, Joy Amundson, who is leaving after six years as head of the bioscience business, is being replaced by Ludwig Hantson, who joined Baxter in May as vice president and president of the company’s international business.
The Deerfield-based medical product giant makes the moves after a year of turmoil that has seen the company battle regulatory issues across several businesses and flagging sales in its lucrative bioscience business.
Baxter has had to halt sales of certain products or even remove problematic devices from the market such as its Colleague home infusion pumps that the Food and Drug Administration ordered off the market and out of hospitals across the country earlier this year due to flawed alarm systems the agency said were a threat to patient safety.
In his announcement, Parkinson did not mention any of the regulatory issues but said the new structure will allow Baxter to “serve customers and other stakeholders with greater efficiency.”
“This new organization reinforces Baxter’s commitment to maintaining a diverse business model while accelerating the company’s ongoing efforts to lower cost and drive productivity,” Parkinson said in a statement released after the close of trading on the New York Stock Exchange.
Shares of Baxter were up 7 cents before the closing of trading this afternoon to $49.42 but the company’s share price is off more than 12 percent in the last year amid the regulatory issues.
In its most recent financial reporting period, Baxter said second-quarter profit dropped 9 percent in part on declining sales in its biosciences unit.
Baxter said net income fell to $535 million, or 90 cents a share, from $587 million, or 96 cents a share. Revenue rose 2 percent, to $3.19 billion. Baxter’s sales in its biosciences business were $1.4 billion, down 4 percent in the second quarter.
The company said sales were hurt by larger rebates on its products it gives to state Medicaid programs for the poor as part of the new health care reform law. In addition, the company said it had weaker sales from antibody therapies and vaccines.
“2010 has been a challenging year,” Baxter Chairman and Chief Executive Bob Parkinson told analysts on the second-quarter earnings call.
