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Business
Business Concentrates
July 26, 2004
| A version of this story appeared in
Volume 82, Issue 30
Venture-capital-backed firms experienced good job and revenue gains during the economic downturn of 2000 to 2003, while national employment fell and most U.S. firms experienced weak sales growth. According to a study (PDF) conducted by Global Insight for the National Venture Capital Association, firms receiving venture funding registered gains of 6.5% in jobs and 11.6% in revenues, while national employment declined 2.3% and U.S. company revenues rose just 6.5%. Mark G. Heesen, president of NVCA, says the study puts the technology bubble of 2001 in context: "In venture capital, failures occur very early on, but successes last a very long time." Venture-backed biotechnology firms, for instance, increased employment by 23% and revenues by 28% compared with private company peers, where employment and revenues rose 5% and 22%, respectively. The study also points out that venture-supported companies, often in conjunction with academic institutions, are doing a greater share of total U.S. R&D. The value of R&D conducted by companies with fewer than 500 employees rose from $4.4 billion in 1984--or 5.9% of business R&D expenditures--to $40.1 billion in 2003--or 20.7%.
UCB has agreed to sell its films business to an investment consortium for roughly $400 million. The group is led by Denis Matthewman, who will chair the new company, and investment firm Candover Partners. The business had sales last year of about $450 million in products ranging from cellophane film to biaxially oriented polypropylene. It has plants in the U.K., Australia, Belgium, and the U.S. The move is expected to be the first of several as UCB divests its remaining chemicals businesses in order to focus on biotech and pharmaceuticals. Earlier this year, UCB acquired U.K. biotech company Celltech for $2.85 billion.
In a deal with GlaxoSmithKline, Diversa will work out the chemistry required to move a new anti-infective compound into clinical development. GSK discovered the entity and is setting performance criteria for Diversa, retaining commercialization rights in exchange for milestone payments, fees, and royalties. If GSK does not exercise its right, Diversa will have that option. Diversa is applying directed evolution technology to both pharmaceutical and industrial compounds. Last week, the company launched Luminase, a biodegradable enzyme that increases paper brightness and whiteness.
CytRx and the University of Massachusetts Medical School are broadening a previous agreement to explore RNAi applications. For a three-year period, CytRx, a specialist in RNAi, will be able to license new technologies related to RNAi, type 1 and type 2 diabetes, obesity, cytomegalovirus, and neurodegenerative diseases. For two years, UMMS will disclose inventions in these areas to CytRx in return for cash payments. As UMMS spokesman Mark Shelton explains, the school has been "aggressive for the past eight or nine years in trying to find partners in industry that will help bring our scientific discoveries to human application."
Another university-industry alliance aims to scale up work in molecular diagnostics. For his large-scale gene association study, John Todd, a professor at Cambridge University's Juvenile Research Foundation/ Wellcome Trust Diabetes & Inflammation Laboratory, is partnering with Affymetrix and ParAllele BioScience to compare 1,000 diabetic to 1,000 control samples. Earlier this year, the two companies linked up to offer reagent kits, software, and arrays in customizable packages for researchers seeking to analyze tens of thousands of single-nucleotide polymorphisms, or SNPs, at a time.
Alphora Research, a new contract R&D firm, has opened labs at Sheridan Research Park in Mississauga, Ontario. Alphora was started in 2003 by Jan Oudenes, who previously founded the Canadian firm Torcan. Torcan was acquired by Avecia in 2000 for $40 million. Alphora's new labs are staffed by 15 scientists, including seven Ph.D. chemists. The firm says it is "executing plans" for the construction of a pilot plant.
BASF's plant science unit and U.K.-based Amaethon will work together on genes involved in the biosynthesis of polyunsaturated fatty acids (PUFAs) in plants. The contract provides BASF with a nonexclusive research license and the option to secure a full commercial license on a group of genes discovered by the Centre for Novel Agricultural Products at the University of York, in England. Amaethon is charged with commercializing technology developed at CNAP.
Morphochem has chosen Evotec OAI for chemical and pharmaceutical development of Oxaquin, a quinolone-oxazolidonone hybrid antibiotic it is developing. Biogen Idec also has renewed its five-year partnership with Evotec under which Evotec provides R&D and current Good Manufacturing Practices services for an unspecified small-molecule drug candidate. Meanwhile, the European Molecular Biology Laboratory and the German Cancer Research Center have chosen Tripos to provide drug discovery services for a small-molecule screening facility they are setting up in Heidelberg, Germany.
Sumitomo Chemical will build a 100-acre facility in Wuxi, China, to cut polarizing film and make light-guide plates for liquid-crystal displays. Sumitomo already operates a plant in Shanghai that cuts and finishes polarizing films, but it has run out of room to expand and is finding that local labor costs are becoming too high. The Wuxi facility will be built in two stages. By next summer, Sumitomo expects to be able to produce up to 5,000 metric tons of light-guide plates per year and 10 million sheets of polarizers per month. One year later, it will have doubled and tripled, respectively, capacity for the two products. Production in Shanghai will be gradually phased out.
U.S. chemical production in June increased only slightly over the previous month, according to seasonally adjusted data from the Federal Reserve Board, but showed a healthy rise over June 2003. The government numbers indicate chemical production rose just 0.1% in June from May to an index of 110.9 (1997=100). This index, however, was up 7.2% from June of last year. The government's estimate of seasonally adjusted chemical plant capacity utilization in June was 75.9%, the same as it had been in May. In June 2003, capacity use was just 71.8%.
Continental Carbon has renewed a contract with union workers at its Sunray, Texas, carbon black plant, but a three-year lockout against union workers at its Ponca City, Okla., facility continues. Members of the Paper, Allied-Industrial, Chemical & Energy Workers International Union (PACE) in Texas voted to accept a new six-year labor agreement. But PACE charges that Continental wants to cut average wages by $20,000 for 86 union workers in Oklahoma where, a union official says, executives "are letting their personal animosities guide the company's behavior." Leslie C. Y. Koo, chairman of Continental's parent, China Synthetic Rubber, charges that PACE negotiators in Oklahoma are not willing to bargain in good faith.
Symyx and BP will extend their high-throughput experimentation (HTE) collaboration by one year. The aim of the collaboration, originally set to expire in January 2005, is to develop catalysts for commodity chemicals. BP will have exclusive rights to market newly discovered materials, and Symyx will receive royalties. Though the partners have been quiet on specifics, a recent article in BP's internal magazine, Frontiers, says the collaboration's results "have exceeded targets for experimental throughput and product yields."
Following a major capacity increase last year, Teijin Twaron will again expand output of its high-performance p-aramid fiber Twaron. Teijin will raise capacity by 5 to 10%, depending on product mix, at its plant in Emmen, the Netherlands. The expansion will entail the construction of a specialty line by the third quarter of 2005. The firm expects 8% annual growth over the next few years for Twaron in safety and protection products and other markets.
DSM's melamine unit and the chemical arm of China National Offshore Oil Corp. have agreed to study the feasibility of building a 120,000-metric-ton-per-year melamine plant on Hainan Island off of China's south coast. DSM would own 70% of the venture, and CNOOC would own the remaining 30%. A final decision on the plant, expected to cost about $100 million, will come early next year; the plant would open by the end of 2007.
- LG Chem will spend $17 million to expand capacity at its 30,000-metric-ton neopentyl glycol plant in Yeosu, South Korea, to 50,000 metric tons per year. The work is scheduled for completion next year.
- Almatis, the former Alcoa Specialty Chemicals, will invest $18 million to expand tabular alumina capacity at its Qingdao plant in the Shangdong province of China.
- Asahi Glass will spend $18 million to boost capacity of its Kashima, Japan, ethylene tetrafluoroethylene copolymer plant by 25%. The material is used to insulate electric cables and as a film component.
- The International Trade Commission has ruled that Chinese, Malaysian, and Thai plastic bag makers are dumping their products in the U.S. market (C&EN, June 30, 2003, page 10). The Department of Commerce will now decide on punitive duties.
- Goodyear Tire & Rubber has decided to take its chemical business off the selling block. The company says it concluded that the business is more valuable to the company if retained than if sold.
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- Cambria Biosciences has formed a three-year collaboration with Syngenta in which the drug discovery services company will work on small-molecule compounds supplied by Syngenta in an effort to develop new classes of insecticides.
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