Malta regulators announced this week that healthcare giant, Baxter International Inc. (BAX) is slated to add 30 new jobs at its Malta facility over the next 18 months and is also set to invest in the infrastructure therein.
Following the announcement, shares of BAX inched up 0.3% to close at $73.39 yesterday. Shares of BAX have already been rising since the announcement of its decision last week to split its pharmaceuticals and medical products businesses into separate companies.
BAX will add new members to its research & development workforce at the Malta facility. The new positions will consist of engineers who will operate in different technical disciplines within the Baxter's Medical Products business, complementing other existing R&D resources around the world.
In March 2013, BAX had reportedly dismissed 97 employees from the Malta office, which represented about 16% of its workforce in Malta at the time. The current additions would only partly make up for the reported job cuts last year.
BAX is seen making efforts to meet its current and future business needs by investing in its manufacturing infrastructure and employee capabilities while also increasing its manufacturing capacity over the coming years.
Last week, BAX revealed that it will split-up its biopharmaceuticals and medical device segments into two independent companies in an attempt to boost innovation and profitability by separately managing the two businesses.
The split-up would enable BAX to lay greater management focus on the two businesses, effectively commercialize product offerings, optimally allocate resources to high-growth areas and bring flexibility in decision-making with respect to growth and investment strategies.
BAX anticipates completing the split-up by mid-2015 in the form of a tax-free distribution of publicly traded shares in the new biopharmaceuticals company to its shareholders. The company expects to incur one-time charges due to the split-up during the reporting periods preceding the separation. However, BAX does not expect it to impact its financial guidance for 2014.
Over the last seven days, BAX has witnessed rising estimate revisions mainly on account of its planned business split-up. For 2014, one estimate moved upward causing the Zacks Consensus Estimate to improve 0.6% to its current level of $5.16 per share.
Currently, BAX carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry are Enzymotec Ltd (ENZY), Meridian Bioscience, Inc. (VIVO) and SurModics, Inc. (SRDX). While Enzymotec sports a Zacks Rank #1 (Strong Buy), Meridian Bioscience and Surmodics carry a Zacks Rank #2 (Buy).
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