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Business Concentrates

December 6, 2004 | A version of this story appeared in Volume 82, Issue 49

Pfizer says strong pipeline will overcome generic threat

In a presentation to financial analysts at its Groton, Conn., R&D center last week, Pfizer said it is on track to achieving its goal of submitting 20 New Drug Application filings in the five-year period ending in 2006. The company said its portfolio of new molecular entities is now 20% larger than in mid-2003, reflecting what it calls the drug industry's premier R&D pipeline. CEO Hank McKinnell said this robust pipeline will help the company weather patent expirations over the next three years that will impact $14 billion in current sales. "We are in a much different situation than those companies that failed to anticipate or lacked the means to respond to these challenges," he said. John LaMattina, president of Pfizer Global R&D, said the company has plans to reduce the attrition of drug candidates, including investment of $500 million over six years to boost its small-molecule library to 3 million compounds. "In the past, overall candidate survival from preclinical development to approved product was about one in 20," he said. "We aim to decrease attrition to one in 10--a dramatic increase in R&D output."

Lyondell wraps Millennium deal

Millennium Chemicals is now part of Lyondell Chemical after the completion of the merger of the two companies last week. Lyondell says the combination creates North America's third largest independent, publicly traded chemical company, based on consolidated pro forma 2003 revenues of $11.4 billion and current market capitalization of $6.5 billion.

National ups Salisbury stake

National Starch & Chemical is spending $18 million to build a new pressure-sensitive solution acrylic and solution rubber adhesive plant and to expand its hair-spray polymer capacity in Salisbury, N.C. National will receive a 50% property tax break from local authorities over the next five years. The company already has specialty chemical production in Salisbury. It will keep its Meredosia, Ill., adhesives and specialty polymers plant open until the new unit in Salisbury starts up.

Fitzpatrick retiring from Rohm and Haas

Rohm and Haas President and Chief Operating Officer J. Michael Fitzpatrick, 57, is retiring in January to seek new opportunities. "This is the right time for me to bid farewell to the company," he says. A spokeswoman says Rohm and Haas will not name a new COO. Fitzpatrick's responsibilities will be reallocated among senior executives.

Bayer refocuses pharma R&D

Bayer HealthCare plans to restructure its global pharmaceutical R&D to suit "changed business conditions" at the unit. Research at the company will concentrate on the fields of cancer and cardiovascular risk management, including diabetes, at its sites in West Haven, Conn., and Wuppertal, Germany. As part of that focus, the company will cut the number of global personnel in R&D and production: About 110 jobs in the U.S. and 404 jobs in Germany will go. In the medium term, the company will set its R&D budget for its pharmaceuticals division at about 20% of sales. The recent agreement transferring its primary care business to Schering-Plough in the U.S. led to a loss of about 1,800 jobs in marketing and sales, the company says. The lost jobs and other "significant savings" will bring the division cost savings of roughly $100 million by 2006, boosting Bayer HealthCare's goal to reduce its cost base by approximately $1.3 billion by 2006.

Phase two set for Dow, GM fuel-cell pact

Dow and GM are expanding fuel-cell project.
Dow and GM are expanding fuel-cell project.

Dow Chemical and General Motors are launching the second phase of their program to test fuel cells at Dow's Freeport, Texas, complex. A single fuel cell was installed at the complex in February. As part of the second phase, a pilot plant producing 1 MW of electricity will be integrated into the complex's electricity grid and hydrogen pipeline system. Upon successful completion of this phase, Dow and GM will move forward with large-scale commercialization in 2007.

'Most polluted' lake targeted

The New York Department of Environmental Conservation (DEC) has proposed a cleanup of Onondaga Lake, which has been called one of the country's most polluted bodies of water. The lake, near Syracuse, was the site from 1881 to 1996 of AlliedSignal chemical units that released mercury as well as organic and calcite contaminants. Under the DEC plan, which was released last week, AlliedSignal successor Honeywell would clean up the lake at a cost of about $450 million.

Henkel deals and cuts jobs

German detergents and consumer goods specialist Henkel has launched a $500 million restructuring that is expected to achieve annual savings of $150 million starting in 2007. The program will entail a loss of some 3,000 jobs worldwide, most of which will be in Europe and North America. Separately, Henkel will launch an R&D project in applied adhesives with groups from five Chinese universities. Work to develop a new generation of adhesives based on silicone-modified materials will begin on Jan. 1, 2005. Meanwhile, Henkel has acquired the French company Concorde Participation, which makes industrial water treatment products in Europe.

France grants Tessenderlo stake to SNPE

French state-owned chemical company SNPE will take over the government's stake in Tessenderlo, a Belgian chemical company. Entreprise Minière et Chimique, a French government holding company, plans to sell 15 to 17% of its current stake in Tessenderlo prior to the transfer of 26 to 28% of the company to SNPE this month. While most of Tessenderlo's business is in inorganic commodity chemicals, an SNPE spokesman says there are some fine chemicals activities that will complement the French firm's Isochem operation. The Tessenderlo holding will not be integrated into SNPE, he says, nor will sales be consolidated.

GE venture has new composite

Credit: GE PHOTO
Credit: GE PHOTO

GE Advanced Materials and Azdel, GE's thermoplastic composite joint venture with PPG Industries, have debuted Azdel Rail-Lite composites for interior panels and parts for the passenger rail industry. The composite, based on glass fibers and Ultem polyetherimide, is 50% air, making it up to 60% lighter than aluminum and 45% lighter than other fiber-reinforced polymers. GE has signed a development agreement with China Railway Long Dragon New Composite Materials.

Grace may be indicted soon

W.R. Grace expects to be indicted by a federal grand jury in first-quarter 2005 for obstruction of federal agency proceedings, violations of federal environmental laws, and related charges. The U.S. attorney for the District of Montana is pursuing a case involving asbestos contamination resulting from Grace's operation of a now-closed vermiculite mine in Libby, Mont.

Merisant sues Splenda maker

Merisant, maker of Equal brand aspartame sweetener, has filed a false advertising complaint in Philadelphia federal court against Splenda maker McNeil Nutritional. Merisant contends that McNeil misleads consumers by claiming that Splenda is "made from sugar, so it tastes like sugar." Instead, Merisant says, McNeil's claim should read "made from dextrose, maltodextrin, and 4-chloro-4-deoxy--d-galactopyranosyl-1,6-dichloro-1,6-dide-oxy-ß-d-fructofuranoside." A McNeil spokeswoman says consumers are not misled. Merisant seeks unspecified damages and advertising to clarify that Splenda is a synthetic product.

Achillion and Gilead in deal

Gilead Sciences and Achillion Pharmaceuticals are collaborating to develop Achillion's small molecules for the treatment of hepatitis C virus infections. The compounds inhibit viral replication by interfering with a viral protease. Gilead is paying a $5 million up-front fee to Achillion and will purchase $5 million of equity. Milestone payments to Achillion could reach $100 million.

Orgasynth buys French plant

France's Orgasynth has agreed to purchase a Merck KGaA drug active ingredient production site in Pithiviers, France, for an undisclosed sum. Under the agreement, 77 of the 94 employees at the facility will transfer to Orgasynth. The French firm says it plans to operate the site as a subsidiary called Orgapharm that will have sales of about $27 million in 2005. A supply agreement with Merck will cover about 50% of production beginning next year. Orgasynth will also take on a drug development contract as part of the deal.

Merck protects top executives

In a filing with the Securities & Exchange Commission, Merck has revealed a plan geared to avoiding the "distraction" of losing key personnel that may occur due to "rumored or actual fundamental corporate changes." The plan could affect some 230 executives. Upon termination or within two years following "a change of control" of the company, the managers would receive severance pay that can reach up to three years of their salary. A "change in control" is defined as a merger, consolidation, reorganization, or acquisition of more than 20% of Merck shares by another company.

BP to close plants in U.K.

BP is closing plants at its Hull site in northeast England that make acetic acid, formic acid, propionic acid, and acetone. Combined output of about 380,000 metric tons per year will be lost when they close by early 2007. BP says it has invested nearly $600 million in the site over the past five years and that the remaining plants are state of the art. The site will remain the largest acetyls plant in Europe, with combined capacity for more than 1 million metric tons per year of acetic acid, acetic anhydride, ethyl acetate, and vinyl acetate.

Clariant has sold its Japanese emulsions subsidiary to Nippon Synthetic Chemical Industry Co. for roughly $24 million. The subsidiary makes powder emulsions used primarily in the construction industry.

Bayer will spend $26 million on two expansions in Antwerp, Belgium, for the polyurethane raw material aniline. The firm plans to build a 50,000-metric-ton-per-year unit to open in early 2006. And it will expand an existing aniline unit by 25,000 tons, bringing its capacity to 165,000 tons.

Micromyx has been launched in Kalamazoo, Mich., by former Pharmacia scientists. The company, the 14th at the Southwest Michigan Innovation Center, will pursue discovery and development of antimicrobial agents as a contract research organization.

Lonza has sold the assets of its diketene production plant in Pasadena, Texas, to Gulf Bayport Chemicals, a company formed in June with the intention of purchasing Lonza's assets. Lonza says it will continue to produce diketene at its plant in Visp, Switzerland.

Basell and Sahara Petrochemical Co. have agreed to build a 450,000-metric-ton-per-year polypropylene unit and propane dehydrogenation plant in Al-Jubail, Saudi Arabia, slated for start-up at the end of 2007. The polypropylene plant will use Basell's new Spherizone technology.


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