Business Concentrates

Two biotechnology firms pare staff

Genaissance Pharmaceuticals is reducing its workforce by 10% in November, making the "majority" of the cuts in its R&D staff. The firm employed 127 at the end of 2003, 108 of whom were in R&D. The company expects to take a $400,000 charge in the fourth quarter for the staff cut. Genaissance aims to integrate pharmacogenomics into drug discovery. It also markets tests for two genetic causes of sudden cardiac death. Tapestry Pharmaceuticals, meanwhile, will discontinue developing its gene-editing technologies, including programs in sickle cell disease and diagnostics. It will continue developing a Huntington's disease program but will wind down all other activities in its genomics division. The firm will close its Newark, Del., facility and lay off about 20 people, or 25% of its workforce. CEO Leonard P. Shaykin says the company will focus on its nearer term oncology program. He anticipates filing Investigational New Drug Applications for a taxane and a quassinoid drug by the end of the year.

Degussa adds in solvents, admixtures

Degussa has begun planning for a new isophorone line at its site in Herne, Germany. The line, which would represent an investment "in the high-double-digit million euro range," would open in 2007, assuming board approval. Degussa already operates two lines for the specialty solvent and its derivatives in Herne, as well as one in Mobile, Ala. Separately, the company's admixture systems business has acquired the concrete admixture operations of Modern Betongteknologi Scandinavia of Stockholm. The business will be integrated into Degussa Construction Chemicals, which last year had sales of approximately $2.1 billion and operating earnings of about $230 million.

Akzo Nobel sees better times

Akzo Nobel reported only positive signs ahead at its annual fall meeting with stock analysts. Speaking about the firm's different divisions, CEO Hans Wijers said efforts "to fix pharma and increase the cash generation and growth potential of our businesses have put the company in a strong position for the future. Our medium-term human pharmaceuticals pipeline is promising, and the growth of coatings will accelerate as we expand organically and through acquisitions. Also, following the completion of the recent divestment program and the wide-ranging restructuring efforts, [the chemical business] is now showing a satisfying performance." Akzo Nobel, he added, is expanding its biotechnology activities--which already represent nearly 20% of sales at its human pharmaceuticals unit--by opening a new research center in the U.S. next year.

Cepsa expands aromatics

Spanish oil company Cepsa is spending close to $400 million on benzene and downstream aromatics projects in Spain. In Huelva, the company is installing a new light naphtha reformer that will use Chevron Phillips Chemical's Aromax technology to produce 220,000 metric tons of benzene per year. At a nearby plant, Cepsa's Ertisa subsidiary is building a 300,000-metric-ton cumene unit and a plant that can make 200,000 metric tons of phenol and 125,000 metric tons of acetone. Cepsa says it will be Europe's second largest phenol producer when the projects are completed in the second half of 2006.

BioVectra will make Virulizin

Lorus Therapeutics has signed a supply agreement with fine chemicals company BioVectra for the commercial manufacture of Virulizin, a bovine bile extract currently in Phase III clinical trials for the treatment of pancreatic cancer in combination with gemcitabine. BioVectra will produce Virulizin in a custom manufacturing facility it opened in Prince Edward Island last year.

Symyx to buy supplier of lab notebooks

Symyx, a supplier of instruments and software for high-throughput experimentation in chemical and drug discovery, has agreed to acquire IntelliChem, a maker of electronic laboratory notebooks, for $28.9 million. Symyx says it plans to combine IntelliChem's iELN notebook system with its own Renaissance research software suite. Symyx expects the deal to close before the end of the year, pending Intellichem stockholders' consent.

Honeywell buys out Mitsubishi

Honeywell has acquired Mitsubishi Chemical's 40% stake in GEM Microelectronic Materials, giving it full ownership of the venture, which the two firms formed in 2001 to combine their business in wet chemicals for the semiconductor industry. GEM has annual sales of $40 million. The transaction is the latest of several in electronic chemicals. Arch Chemicals is selling its electronics business to Fuji Photo Film, and Germany's Merck recently put its wet chemicals business up for sale.

Perrigo adds generics to OTC business

Over-the-counter drugmaker Perrigo will acquire the Israeli generic drug company Agis Industries for $818 million. Agis specializes in drugs for dermatological, cardiovascular, gynecological, and allergic diseases; the company's Chemagis division manufactures generic active pharmaceutical ingredients in Israel and Germany via a range of technologies including hydrogenation, Grignard reactions, high-pressure chemistry, and chiral synthesis. "We now have the platform to fully launch our generic strategy," Perrigo CEO David T. Gibbons says.

Cognis forms radcure venture

Cognis has formed a joint venture with Taiwan's Eternal Chemical Co. to produce acrylate monomers and oligomers for use in ultraviolet- and electron-beam curing polymers. The joint venture, Eternal Specialty Chemical (Zhuhai), will be located in Zhuhai, at the mouth of the Pearl River in southern China. A new plant to be operated by the joint venture is scheduled to open by the end of this month. Cognis says it is a worldwide leader in radiation curing oligomers and polymers and that Eternal is a leader in the technology in Asia.

Solvay, Russians in vaccine deal

Solvay Pharmaceuticals and Russia's Petrovax Pharm are joining to build a flu vaccine facility near Moscow. The Petrovax-owned plant, expected to open in 2006, will produce vaccines that combine new cell culture antigens from a Solvay unit in the Netherlands with an immune-enhancing adjuvant--polyoxidonium--developed by Petrovax. The vaccines are intended for Russian and Commonwealth of Independent States markets; the two firms also say they will cooperate on next-generation vaccines. Petrovax was spun out of the Institute of Immunology, in Moscow.

IFF, Rhodia in China moves

International Flavors & Fragrances is planning a $29 million aroma chemical plant in China's Hangzhou Economic & Technology Development Area. IFF says it already operates six aroma chemical plants around the world--the most in the industry--but that increasing demand necessitates another one. The plant will open in late 2006. Meanwhile, Rhodia has taken full control of Wuxi Specialty Chemicals, a Chinese subsidiary, by acquiring its partner's 30% stake. Wuxi makes surfactants and other products for the personal and home care markets.

Great Lakes hiking bromine

Great Lakes Chemical is installing a new well for the extraction of elemental bromine at its El Dorado, Ark., facility. The company is also doubling capacity at the site for polybrominated styrene flame retardants, used in engineering polymers such as high-temperature nylon. Both projects are set for completion in the first quarter of next year.

Chemical prices soar again

U.S. chemical prices continued their upward momentum in October, rising 0.6% from September and 11.0% from October 2003 to an index of 179.9 (1982 = 100), according to data from the Labor Department. The index for industrial chemicals rose 0.9% from September and 24.0% from the comparable month last year to 174.6, spurred by basic organic chemicals, where the index of 189.3 was up 1.1% from September and 30.9% from last October.

Novartis extends drug venture in Shanghai

Novartis and the Shanghai Institute of Materia Medica are extending a natural-product-based drug discovery collaboration until 2007. SIMM will isolate 1,500 new compounds from Chinese medicinal plants, which will then undergo high-throughput screening by Novartis. Since the collaboration started in 2001, SIMM has isolated more than 1,800 compounds from Chinese medicinal plants. According to Novartis, several validated hits from this screening have entered the drug development pipeline.

Serono signs protein deals

Serono is working with protein evolution company Nautilus Biotech to develop a next generation of human growth hormone. Nautilus will receive up-front and milestone payments that, along with Serono's option to develop a potential drug candidate, could total $24 million. Nautilus' technology is geared toward improving the potency, stability, and toxicity of proteins by slightly changing their amino-acid sequence. Separately, Serono is expanding a collaboration with Inpharmatica to validate novel protein sequences. More than 200 novel protein sequences have been identified since their partnership began in 2001.

Lonza has started commercial production at a 1,000-L microbial biologics facility in Visp, Switzerland. The company has also filed an application to modify its license with Swiss authorities in order to produce recombinant vaccines.

Tripos has announced a "multi-million-dollar, multi-year" extension of its software licensing agreement with Pfizer. Tripos currently provides drug discovery software and compound library services to Pfizer.

BASF will work with the cosmetics firm Shiseido to develop new UV protection materials for use in sunscreen. The firms say they will develop products that offer UVA and UVB protection as well as high transparency.

PPG Industries and Japan's Kansai Paint have launched a joint venture, PPG Kansai Automotive Finishes. Initially, the partners will concentrate on Japanese auto firms with operations in North America and Europe. Later, they intend to serve companies in China and other Asian countries.

Merck has signed an agreement with Rigel Pharmaceuticals under which the two will investigate ubiquitin ligases, a new class of drug target, to find cancer treatments. Rigel will receive a cash payment, research funding, and possible milestone payments.

Locus Pharmaceuticals will use its computational technology to discover small-molecule compounds for Dow AgroSciences' fungal targets. Locus will receive milestone and royalty payments from Dow and will have an option to develop human therapeutic applications.

Bayer shareholders have approved, as expected, the spin-off of Lanxess, a new chemical and polymer company with about $7 billion in annual sales. Bayer is concentrating on health care, crop science, and high-tech materials.

Innovatti, a joint venture between Cargill and Hatco Corp., has completed a new plant in Mairinque, São Paulo, Brazil. The plant makes esters and vegetable-based lubricants for automotive, refrigeration, steel, and oil-drilling applications.