Business Concentrates

ArQule moves into cancer drug development with Roche

ArQule and Roche have announced a partnership under which the companies will collaborate on oncology drug candidates using ArQule's activated checkpoint therapy technique for identifying novel pathways to selectively kill cancer cells. The technique kills cells through activation of a key cell death regulator called E2F. Roche will pay $15 million to ArQule in up-front research funding. Total payments to ArQule could reach $276 million plus royalties for the successful development and commercialization of a compound under the program. According to the agreement, ArQule is responsible for advancing drug candidates from early-stage development into Phase II clinical trials. The deal advances ArQule in its efforts to grow beyond supplying drug target identification services to partnering on downstream drug development (C&EN, July 28, 2003, page 21). "I believe this collaboration goes a long way to validating ArQule's emergence as a serious contributor to oncology research and development," says Stephen A. Hill, CEO of ArQule.

Shott buys engineering firm

Ian Shott Enterprises, a holding company formed earlier this year by veteran chemical industry executive Ian Shott, has purchased engineering firm WH Promation, Edinburgh, Scotland, forming Ian Shott Technology. Shott, who formed a consulting firm, Ian Shott Associates, last year, says the new company intends to design manufacturing plants and equipment for the pharmaceutical, food, and biotechnology industries. Earlier this month, Shott's new technology group signed a deal to design and build a fermentation plant for Angel Biotechnology, Cramlington, England. Promation has worked in the past with Angel, as well as with Procter & Gamble and Avecia. Shott, in recent years, has called for radical plant redesign and efficiency improvements in pharmaceutical manufacturing (C&EN, Nov. 24, 2003, page 15).

New catalyst activity

Belgian metals and specialty materials producer Umicore says it has a new technology that allows palladium to be used instead of platinum in diesel emissions control systems, particularly those in passenger cars. Palladium is roughly one-third the price of platinum. Umicore says the technology could be introduced commercially next year. Last year, the company bought the precious-metals division of OM Group. Separately, Kemira is pruning its product portfolio by selling its holding in Ecocat to the Finnish investment firm Eqvitec Partners for an undisclosed price. Ecocat, which had sales last year of about $57 million, produces catalytic converters for automotive use. "Catalysts for vehicles and small combustion engines were always outside Kemira's core business concept, and we decided to divest it," says Kaj Friman, Kemira's group treasurer.

Capital increases for major firms

Shareholders at Clariant and Rhodia have approved increases in capital at the two financially beleaguered specialty companies. At Clariant's annual meeting in Basel, Switzerland, shareholders endorsed a plan to increase by 50% its share capital by issuing new shares, raising approximately $710 million. The move gives the firm financial flexibility and the ability to implement its performance improvement program. Separately, in Paris, Rhodia shareholders accepted a program to raise $575 million in new shares and $732 million in bonds. Rhodia says the income from these two actions, plus proceeds from sales of assets this year of another $854 million, will supply $2.16 billion to help strengthen the company's financial structure and reduce its level of debt.

Lonza in deal with Japanese pharma firm

Lonza's Biologics Division has agreed with privately held Japanese biopharmaceutical company Y's Therapeutics to collaborate on cell-line construction and production of humanized monoclonal antibodies. Y's Therapeutics is developing the humanized therapeutic monoclonal antibody for its program in cancer and immune diseases. Lonza will use its GS Gene Expression System to create a production-grade cell line, and will also contribute its antibody manufacturing expertise. Says Rene Imwinkelried, head of R&D Biopharmaceuticals at Lonza, "This contract is a further step to strengthen our pipeline in the area of biopharmaceuticals."

DOE awards ethylene project

The Department of Energy has picked the team of Dow Chemical, Velocys, and Pacific Northwest National Laboratory to apply microchannel process technology from Velocys to the production of ethylene and other olefins. The three-year, $3.2 million project will focus on the development of a high-intensity oxidation process that could enable intensification of ethylene production and lead to substantial energy savings, reduction of pollutant emissions, and improved economics. The project includes reactor design, catalyst development, and process economic analysis.

Pemex moves forward on Phoenix

Pemex, Mexico's state oil company, is taking a step forward on its Phoenix Project to build a new 1 million-metric-ton ethylene cracker joint venture with partners from the private sector. Arturo García, the Pemex executive in charge of the project, tells C&EN his company has narrowed the list of some 20 companies interested in the project down to seven firms that will present proposals to Pemex in coming weeks. García hopes formal negotiations on the project will commence by the end of the year on the new cracker, to be located in either the Altamira or the Coatzacoalcos areas of Mexico. Pemex hopes to begin construction in 2005 and start up the plant in 2009.

Employment inches up

U.S. chemical employment increased in March from February, but only by 200 workers to 894,800, according to seasonally adjusted data from the Labor Department. The March total was still down 21,400 from the same month in 2003. The number of production workers increased by 400 from February to 520,200; however, this was 8,400 fewer than in March of last year. The average workweek for March fell slightly to 43.2 hours from February's 43.3, while the government's index of aggregate weekly hours--a product of production employees and the hours they work--declined to 100.0 (2002 = 100) from 100.1 in February.

GE completes Amersham buy

GE has completed its $10.2 billion purchase of medical diagnostics and life sciences company Amersham. GE will combine the new unit with GE Medical Systems to form GE Healthcare, which will have approximately $14 billion in annual sales this year. GE Healthcare will also spend about $1 billion annually in R&D and employ 42,000 people. Joseph M. Hogan, GE vice president of health care technologies, says the deal will combine GE's expertise in physics, engineering, and informatics with Amersham's in biology and chemistry. "It is the first time in the industry that these core competencies have been combined into one company," he says.

Soda ash updates

Solvay America plans to shut down solution mining of natural sodium bicarbonate and will discontinue conversion to soda ash at the American Soda operations in Parachute, Colo., because of high energy costs. Soda ash customers will receive supplies from Solvay's Green River, Wyo., facility. Solvay purchased American Soda from the Williams Cos. last September. Separately, soda ash and calcium chloride maker General Chemical Industrial Products has emerged from bankruptcy reorganization. The company filed for bankruptcy in December 2003 with $158 million of debt and emerged with $52 million in debt remaining.

Sumitomo cedes acrylic acid

Sumitomo Chemical will transfer its stakes in various acrylic acid ventures in Singapore to Nippon Shokubai. In 2002, Sumitomo had transferred to Shokubai its Japanese acrylic acid operations in exchange for Shokubai's Japanese methyl methacrylate business. As part of the Singapore deal, Sumitomo will transfer to Shokubai a 51% stake in Singapore Acrylic, a 60,000-metric-ton-per-year acrylic acid venture that is now 60% owned by Sumitomo and 40% by Toagosei. Sumitomo will also transfer to Shokubai its 100% stake in a 25,000-metric-ton glacial acrylic venture. Finally, Shokubai will own Sumitomo's 25% stake in an 82,000-metric-ton acrylic ester venture that is 75%-owned by Toagosei. Sumitomo says the deal is consistent with its strategy of focusing on its core competencies. Terms of the deal, to be executed in June, were not disclosed.

Celanese sheds fuel cells

Celanese has spun off its fuel-cell activities to Conduit Ventures, a consortium of investors that includes Johnson Matthey, Mitsubishi, and Shell Hydrogen. Celanese will hold a minority stake in the venture, which will be called Pemeas Fuel Cell Technologies. The new company--whose roots go back to Celanese's predecessor company Hoechst--will continue to be based in Frankfurt, producing membrane electrode assemblies for high-temperature polymer electrolyte membrane fuel cells. Conduit is a London-based venture-capital company focused on fuel cells and related hydrogen technologies.

BUSINESS ROUNDUP

• Rhodia Pharma Solutions says it has completed a $9.2 million extension of its current Good Manufacturing Practices production plant in Dudley, England. The project included the addition of a chemical reaction stream to the former Sterling Chemical pharmaceutical actives manufacturing site. 

• Tecan, a biotechnology company, will supply, install, and provide customer support for the South African Police Service's fully automated forensic DNA typing system. The contract, worth just over $10 million, uses Tecan's large-scale technology to permit automated DNA typing from blood and other body fluid, as well as from tissue samples collected at the scene of a crime.

• DuPont will sell its Invista textile fibers operations to Koch Industries for $4.2 billion--$200 million less than originally agreed on--and now expects to close the sale by April 30 instead of June 30.

• The U.S. District Court in Western Louisiana denied class-action status to a lawsuit challenging the safety of wood treated with chromated copper arsenate (CCA). Defendants were construction products retailers Home Depot and Lowes and CCA suppliers Arch Chemicals, Chemical Specialties, and Osmose.

• BASF will phase out industrial coatings production at Batavia, Ill., by year-end and transfer it to factories in Belvidere, N.J.; Decatur, Ala.; and Morganton, N.C. About 80 positions will be eliminated. 

• Petrobras, Brazil's state oil company, says it will appeal a decision in a lawsuit brought on by Porto Seguro Imóveis--a minority shareholder in Petro–bras' chemical firm, Petroquisa--over losses stemming from Petrobras' privatization in the 1990s of petrochemical assets. The decision requires Petrobras to transfer $2.4 billion to its chemical arm, and will also be required to pay an additional $590 million in legal fees and payments to the plaintiff.

• DuPont has agreed with DuPont Dow Elastomers partner Dow Chemical to take responsibility for the government antitrust investigation of synthetic rubber markets. DuPont will fund liabilities up to $150 million and 75% of any further liabilities.