Biogen (BIIB) announced the spin-off of its hemophilia business on May 3, 2016. Biogen decided to spin off the business segment due to the different target patient population and market. The two companies will be strategically focused on their core competencies, thus well-positioned to provide better value to shareholders and customers.
On August 9, 2016, Biogen announced the name of its new independent hemophilia business spin-off. Bioverative will be the new company that will trade on the NASDAQ stock exchange under the symbol BIVV. Biogen filed the initial form ten registration, which is used to register the securities of a company for trading on the US exchanges, for Bioverative on August 11, 2016. The company expects to complete the spinoff by early 2017. Thus, the hemophilia business will continue to contribute towards Biogen’s revenues through the rest of 2016. For more on the spin-off rationale, read Biogen’s Hemophilia Drugs Could See Strong Revenue Growth.
Deal implications and potential opportunities
Bioverative will be able to focus on the company’s strong hemophilia product pipeline, as shown in the above diagram, after the spin-off through focused resources and expertise. After the spin-off, Bioverative is expected to continue developing and commercializing its hemophilia A and hemophilia B drugs Eloctate and Alprolix, respectively, under the existing collaboration agreement of Biogen with Sobi (Swedish Orphan Biovitrum AB). Biogen will continue some service transitioning and manufacturing of Eloctate and Alprolix over the next three to five years. The new hemophilia business entity, Bioverative, will be able to focus on an approximately $7 billion market opportunity in hemophilia markets worldwide.
Baxter (BAX) also identified the stiff competition in the hemophilia business and the need for focused resources and independent functioning of the business segment, which led to the company spinning off its hemophilia business into a new company, Baxalta (BXLT), in July 2015. Baxalta’s Advate, Pfizer’s Xyntha, and Novo Nordisk’s (NVO) NovoSeven are some of the drugs that compete with Biogen’s Alprolix and Eloctate. Investors interested in gaining exposure to Biogen can invest in the iShares Core S&P 500 ETF (IVV).
In the next part of this series, we’ll look at Biogen’s recent product launches and approvals.