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Business Concentrates

November 15, 2004 | A version of this story appeared in Volume 82, Issue 46

Bristol-Myers, Medarex sign a deal, while Aventis and Genta cancel one

Big drug companies giveth, and they taketh away. Bristol-Myers Squibb has formed an agreement to develop and commercialize MDX-010, a fully human antibody developed by Medarex that is in Phase III clinical trials for the treatment of metastatic melanoma. The collaboration also includes MDX-1379, a peptide-based vaccine being developed for use in combination with MDX-010. Medarex will receive an initial cash payment of $50 million, half of which will be for Medarex stock. Medarex could receive up to $205 million more if all regulatory milestones are met and up to $275 million in sales-related milestones. Separately, Aventis has ended a similarly structured agreement it formed in 2002 to commercialize Genasense (oblimersen), an antisense compound developed by Genta for fighting cancer. The pact called for Genta to receive $135 million up front and hundreds of millions more in milestone payments. However, in May of this year the drug was rejected by FDA as a melanoma treatment, and it recently showed mixed results as a leukemia treatment. Genta's stock fell almost by half last week after Aventis announced the end of the deal.

Three firms sign phytosterol pact

Procter & Gamble Chemicals, Bunge Ltd., and Peter Cremer North America have formed an alliance to make and market phytosterols and phytosterol esters, plant-derived materials said to reduce serum cholesterol levels when added to foods. The partners say the agreement builds on raw materials from Bunge, the world's largest processor of oilseeds; manufacturing from Peter Cremer, an oleochemicals producer; and marketing and sales expertise from P&G.

Bulriss leaves Great Lakes

A search for a new CEO is under way at Great Lakes Chemical following Mark P. Bulriss' sudden resignation for what the company says are personal reasons. Investment banking firm Goldman Sachs notes that Bulriss "leaves after six stormy years at the helm, a period marked by many market-inflicted and self-inflected wounds." Under Bulriss' tenure, Goldman says, efforts to expand the company into cleaning products caused "investor concerns." In the meantime, Nigel D. T. Andrews, a former General Electric executive, is temporary nonexecutive chairman, and John J. Gallagher III, previously the chief financial officer, is acting CEO.

New Japanese drug company sets targets

Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical have released a midterm management plan for Astellas Pharm, the company that will emerge when they complete their merger next April. Astellas will concentrate R&D efforts on diabetes, infectious diseases, gastrointestinal disorders, central nervous system disorders, urology, immunology, and inflammatory disorders. Astellas' merged sales force will deploy 2,700 people in Japan. Marketing plans are more vague for North America and Europe, where Yamanouchi and Fujisawa hope Astellas will "accelerate business operations" for most of their products. The companies project that Astellas will achieve sales of $9.5 billion in the 2007 fiscal year. They expect that the merger will by then yield annual cost savings of $235 million.

Novozymes and Solvay in deal

Solvay Pharmaceuticals and Novozymes are collaborating to develop products for enzyme replacement therapy in patients with diseases that affect the pancreas. The substances would originate from "a biotechnologically engineered microbial enzyme line." Solvay currently markets a pancreatic enzyme preparation called Creon. Pancreatic enzyme products of various types, including those of bovine and porcine origin, have been available for many years without FDA regulation. This spring, the agency began requiring all such products to have New Drug Applications.

W.R. Grace employees sue over funds

Employees of W.R. Grace claim they were cheated of nearly $40 million in their personal retirement accounts. According to a lawsuit filed in U.S. district court in Covington, Ky., Grace hired an investment bank in early 2004 to liquidate employees' Grace stock at $3.50 per share, despite employee objections. The firm's stock price tripled soon after, and last week traded as high as $14.65. Grace had not responded to a request for comment as of press time.

Metabolix, ADM in renewables alliance

Credit: Metabolix Images
Metabolix says PHA's resistance to hot moisture makes it suitable for plastic cutlery and coated hot drink cups.
Credit: Metabolix Images
Metabolix says PHA's resistance to hot moisture makes it suitable for plastic cutlery and coated hot drink cups.

Metabolix and Archer Daniels Midland are planning a 50-50 joint venture to commercialize polyhydroxyalkanoate (PHA), a plastic derived from renewable resources. The companies say they will establish a 50,000-ton-per-year facility "somewhere in the Midwest" that will make PHA for applications including film, coated paper, and molded goods. Under the agreement, agribusiness giant ADM will obtain exclusive manufacturing and certain marketing rights to Metabolix's PHA technology. Metabolix will receive payments for technology transfer and scale-up. PHA is produced using a fermentation process that starts with agricultural raw materials such as corn sugar.

Gases firms set Asian facilities

Air Products & Chemicals and Air Liquide have teamed up in a 50-50 venture that will invest $30 million in the construction of an air separation unit in Beijing. The plant will supply Beijing BOE Optoelectronics Technology, a Chinese manufacturer of thin-film-transistor liquid-crystal displays, when it opens in the second half of 2005. Meanwhile, BOC Edwards and subsidiary BOC Lienhwa Industrial Gases will spend $75 million on facilities to supply gases to nine new semiconductor and flat-panel-display plants throughout Taiwan. The two companies will build high-purity nitrogen generators to supply four new semiconductor plants at Hsinchu Science Park. They will build a nitrogen generator at Taichung Science Park, also to supply a semiconductor plant. And they will build four nitrogen plants in Taoyuan, Hsinchu, and Tainan to supply new display plants.

Dow to reduce vinyl chloride ...

Dow Chemical will reduce vinyl chloride production and cease production of ethylene dichloride at one facility in Oyster Creek, Texas. The reduction, the company says, accounts for about 4% of total North American vinyl chloride capacity. The remaining chlor-alkali, ethylene dichloride, and vinyl chloride plants in Oyster Creek will not be affected. About 10 to 20 employees will be impacted by the phasedown, Dow says. Vinyl chloride customers will be supplied from Dow's other plants and via commercial agreements.

... while Solvay will increase it

Vinythai, a Thai company 46.4% owned by Solvay, will double vinyl chloride capacity at its Map Ta Phut complex to 400,000 metric tons per year. The project, expected to be complete in September 2006, will cost about $57 million. Solvay says the raw material ethylene dichloride will be imported; the firm is studying whether to back-integrate into the chlorine needed to make ethylene dichloride. Separately, Solvay has licensed its vinyl chloride technology to the Chinese firm Singpu Chemical Industries, which plans to build a 200,000-metric-ton-per-year plant in Jiangsu province by first-half 2006.

Chemical jobs fall in October

U.S. chemical employment declined again in October, according to seasonally adjusted data from the Department of Labor. The government figures show a 1,600-employee decline from September to 889,900. Compared with the same month last year, employment was down 9,200. There were 524,300 hourly production employees in October, down 100 from the previous month. The October number, however, was up 1,800 from October 2003. Compared with September, the average workweek stayed steady at 42.7 hours, as did the index of aggregate workhours of production--a product of the number of workers and the hours they work--which stood at 99.6 (2002 = 100).

Ineos adds and sheds catalysts

Ineos Silicas will make a "substantial investment" to expand its Liverpool, England, plant that makes microspheroidal silica products for use in supporting polyolefin catalysts. Set for completion by early 2006, the project will double capacity for the silica supports, which are used for Ziegler-Natta, single-site, and chromium-coated catalyst systems. Separately, the company will sell its specialty high-pore-volume, high-surface-area chromium catalyst business to polyolefins producer Basell.

Singapore gets sucralose plant

British sugar company Tate & Lyle is adding capacity in a big way for its sugar-based noncaloric sweetener sucralose. It has announced that it will build a $175 million plant to produce sucralose in Singapore, with completion slated for January 2007. The company has also slated two expansions at its existing plant in McIntosh, Ala., that together will more than double capacity by April 2006. Other sugar derivatives that Tate & Lyle is advancing include 1,3-propanediol, the fiber intermediate being developed with DuPont, and astaxanthin, a dextrose-derived pigment that is fed to farm-raised fish.

Water treatment acquisitions

In one of two deals in the water treatment business, Finland's Kemira has snapped up U.S. coagulant producer Eaglebrook International, which has annual sales of about $65 million in iron and aluminum coagulants for waste- and potable water. Kemira will combine Eaglebrook with its Kemiron subsidiary, resulting in a company with combined sales of more than $165 million and nearly 500 employees. Separately, Ciba Specialty Chemicals has bought AB CDM, a Swedish supplier of chemicals for the water and paper treatment industries with 42 employees.


Cabot Corp. and joint-venture partner Shanghai Coking & Chemical are planning a carbon black plant in Tianjin, China. The plant's first production unit is expected to open in early 2006 with capacity for 50,000 metric tons per year. Cabot expects to expand it later in 2006.

Inion, a Finnish biomedical polymers producer, plans an initial public offering on the London Stock Exchange, with a goal of raising approximately $55 million. The company specializes in biodegradable polymer implants for the orthopedic fixation market.

Novartis has picked a clinical candidate from Vertex Pharmaceuticals called VX-322, a selective protein kinase inhibitor for which Vertex will be receiving $10 million. The protein kinases being targeted are involved in growth regulation in tumor cells.

DuPont will open an R&D and applications development center at the Korean Institute of Science & Technology in Seoul, South Korea. The center will focus on electronic materials for displays.

Rhodia will build a plant to produce engineering nylon at its site in Shanghai. When completed, the new plant will have capacity of 40,000 metric tons per year for a variety of resins, including nylon 6, 6/6, and 66/6.

Crompton Corp. has named John A. Lacadie to the newly created position of vice president and chief technology officer. A 28-year veteran of the firm, Lacadie will head a new centralized technology organization.


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