Baxalta (BXLT) was created on July 1st 2015 when Baxter (BAX) spun-off its biopharmaceutical division.
Baxalta may be new, but it is no start-up company. Baxalta has estimated annual revenues of around $6 billion, and 16,000 employees.
Around 50% of Baxalta's sales come from the United States, with the other 50% from international markets. The company operates in 3 segments:
The hematology segment currently accounts for about 60% of sales for Baxalta. The immunology segment makes up the other 40%. Where does that leave oncology?
The oncology segment will be operational when Baxalta acquires blockbuster leukemia drug treatment Oncaspar from Italian company Sigma-Tau Finanziaria S.p.A. for $900 million. The acquisition is expected to close in the 2nd half of fiscal 2015.
Onscapar currently generates around $100 million a year in revenue. Baxalta expects to grow the treatment to around $500 million a year in revenue by 2020.
Earnings Calculation & Valuation
As a spin-off, Baxalta does not have historical stand-alone financial reports. The company's pro-forma 2014 financial statements do give insight into the earnings power of the company.
Baxalta's pro-forma 2014 financial statements shows adjusted pre-tax income of $2,073. Baxter had a tax rate of 22% last year. Baxalta's tax rate should be similar to Baxter's tax rate last year. Using a 22% tax rate, Baxalta had net profit of $1,617 billion in fiscal 2014.
Baxter distributed 80.5% of Baxalta to Baxter shareholders on July 1st, 2015. Baxter shareholders received 1 share of Baxalta for every share of Baxter. In total, there are approximately 544 million shares of Baxalta.
This works out to about $2.39 in earnings-per-share for Baxalta. The company currently trades for about $32.00 a share, for a price-to-earnings ratio of 13.4. The price-to-earnings ratios of other large biopharmaceutical companies are shown below:
