Dallas, Texas 04/02/2014 (FINANCIALSTRENDS) – The diversified pharmaceutical business Baxter International Inc. (NYSE:BAX) has gained attention for several of its strategic moves to grow its bio-Pharma segment since late 2013. The company entered a strategic alliance over myeloid leukemia drug Pacritinib’s with Cell Therapeutics Inc (NASDAQ:CTIC) last year, then it was found eying for a vaccine business buyer and now it is spinning off the bio-pharma business as a whole. The last of the three moves is a good hint that Pictranib is nearing an approval for commercial production as the approval will be followed up with liquidity infusion from Cell Therapeutics inc (NASDAQ:CTIC) under the marketing collaboration agreement between the two companies.
Pactrinib’s Value Offering to Baxter
As sole -distribution and marketing agent for CTIC’s tri-Kinase inhibitor, Baxter is entitled to payments up to $112 million for regulatory and clinical milestone achievements. Upon commercial launch royalties from on-net sales outside the US, will also accrue to the company. CTIC’s Pacritinib treats malignant Myelofibrosis, (Myeloid leukemia).
Baxter Share Price may Stumble, as BioPharma is Spun-Off
According to accounting and finance experts tax-free spin offs have their way of improving stock prices for two reasons. Firstly, companies only spin off a segment when its nearing a growth phase in its life cycle within a growth industry. According to a report from the center of economic performance (CEP) in Europe, most such tax-free spin-offs perform upbeat while parent companies struggle on the stock screener for a few years to come. Secondly, is a unit is cannibalizing the liquidity arising from elsewhere on the business portfolio. For Baxter International Inc. (NYSE:BAX)’s reason is obvious.
Amid an assortment of diversified large cap competitors, business of oncology bio-pharma may be a riskier proposition but it offers growth potential for the supply side partners. The CTIC partnership will give it a cash inflow for clinical milestones achieved as well as for
To make things better!
Pacritinib’s, being an, single dose oral treatment has only a few competing drugs. Iclugis from Ariad Pharmaceuticals Inc (NASDAQ:ARIA) a big contender for top spot in Oncology innovation has already been repositioned as a drug of last resorts for its cardiovascular side effects.