BUSINESS CONCENTRATES Landing Page | March 28, 2005 Issue - Vol. 83 Issue 13 | Chemical & Engineering News
Volume 83 Issue 13 | pp. 14-15 | Concentrates
Issue Date: March 28, 2005

BUSINESS CONCENTRATES

Department: Business

Pharmaceutical, biotech merger activity picked up in 2004

Merger and acquisition activity increased in 2004 in both the pharmaceutical and biotechnology sectors. According to studies just released by the investment banking firm Young & Partners, a record 51 pharmaceutical deals were completed in 2004 with a value of $75.8 billion. That was an increase over the 37 drug deals completed in 2003 for $66.0 billion. Mammoth deals skewed values in both years. Last year, Sanofi's $67.3 billion purchase of Aventis dominated the acquisition scene, while Pfizer's $60.1 billion purchase of Pharmacia dominated 2003. Six large deals valued at more than $1 billion each led the 32 biotechnology deals completed in 2004 for a total value of $13.1 billion. The largest was Teva Pharmaceutical Industries' purchase of Sicor for $3.5 billion. In 2003, 29 biotech deals were completed with a value of $10.3 billion. Biotechnology firms were able to raise $3.9 billion in 68 equity offerings in 2004 versus $2.6 billion in 44 offerings in 2003. But that is still a "far cry," firm President Peter Young says, from the $17.1 billion raised in the heady year of 2000.

ACC names new president

Gerard
ACC PHOTO
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Gerard
ACC PHOTO

The American Chemistry Council has picked Jack N. Gerard as its new president and CEO. Gerard, cu rrently president and CEO of the National Mining Association, will take the helm on July 1. He will succeed interim president and CEO Thomas E. Reilly Jr., the former head of Reilly Industries who took over leadership of ACC last summer following the unexpected resignation of Gregori Lebedev. Reilly says Gerard's background in issue advocacy and association leadership makes him an ideal choice. "Jack will be able to hit the ground running and quickly lead ACC to new heights," he says.

Crompton sells a business

It took five years, but Crompton has finally found a buyer for its refined products business: a consortium led by Sun Capital Partners Group. The $80 million agreement includes a long-term contract allowing Crompton to operate the sodium sulfonate unit within the Amsterdam facility it is selling. The refined products business, with 2004 revenues of $265 million, is a leading supplier of white oils, petrolatums, and microcrystalline waxes. The deal came just nine days after Crompton agreed to acquire Great Lakes Chemical for $1.8 billion.

Pfizer to sell Michigan plant

Pfizer is ending active pharmaceutical ingredient (API) and intermediate production at its Holland, Mich., plant and putting the site up for sale as part of a plan to reduce manufacturing capacity following the 2003 acquisition of Pharmacia. If the plant can't be sold, Pfizer says, it will be closed. Production will be moved to other sites by the end of 2006. The Holland plant, which employs about 300 people, produces APIs such as gabapentin, the active ingredient in the pain and seizure drug Neurontin.

Bayer, Roche in biomarker deals

Bayer's diagnostics division is collaborating with Oxford Genome Sciences to evaluate biomarkers of interest for breast cancer diagnosis and treatment. OGS will apply its proteomics platform--informatics tools and a proteomics database--to biomarkers that Bayer has identified using arrays. Meanwhile, Roche Diagnostics and Iceland Genomics will jointly examine tumor biopsy samples from patients to validate biomarkers that can help predict cancer recurrence in specific tumors. Iceland Genomics will have access to a wide range of data to characterize the samples, including the Icelandic population-based clinical genomics database and biobank on cancer.

India moves on drug patents

India's parliament has approved a bill that will ban local companies from producing branded pharmaceuticals that are protected by patents in other countries. India pledged to change its laws on drug patents when it joined the World Trade Organization in 1995. The new law will grant patent protection for 20 years, starting from the date an application is filed. Patenting of microorganisms will not be allowed. In expectation of the passage of the bill, the government has already collected close to 9,000 patent applications, mostly from multinational corporations. The nongovernmental organization Doctors Without Borders is urging India to continue making AIDS drugs for developing countries. DWB says 70% of the AIDS patients it treats rely on drugs that Indian companies supply for about $250 per patient per year, compared with thousands for similar products bought from patent owners.

Innovene is new name for BP olefins unit

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BP is renaming its olefins and derivatives business Innovene, a name that BP now uses for its polyolefins production technology. The business, which has annual sales of more than $15 billion, will become a subsidiary of BP on April 1. BP plans to sell Innovene later in 2005, possibly by way of an initial public offering of stock. Innovene will be headquartered in Chicago and have more than 8,500 employees at 26 major sites around the world.

Solvay to buy French firm

Solvay has agreed to purchase the French pharmaceutical firm Fournier Pharma, maker of the cardio-metabolic therapy fenofibrate, for $1.7 billion. Fournier had sales of about $735 million in 2004, thanks in part to a fenofibrate marketing pact with Abbott Laboratories. Solvay Chairman Aloïs Michielsen points to growth potential from the combination of R&D pipelines. Fournier is developing new combinations of fenofibrate and other drugs and has projects under way in other therapeutic areas. Solvay was reported late last year to be in talks to buy the French firm (C&EN, Dec. 20, 2004, page 17).

Dow boosts cellulosics

Dow Chemical is expanding its capacity for methylcellulose and hydroxypropyl methylcellulose by 20,000 metric tons per year across three of its plants. The company is upping capacity for the products by 17,000 metric tons between its Midland, Mich., and Plaquemine, La., sites. The Midland expansion is expected to come onstream in 2007; the Plaquemine expansion is expected by 2007 or 2008, depending on local tax incentives. The company is also expanding capacity in Stade, Germany, by 3,000 metric tons by early next year.

BASF expands nylon capacity

BASF will expand capacity for nylon 6 polymer in Freeport, Texas, with a new production line within its existing facilities. When the expansion is finished, the site will become the company's manufacturing base for its North American nylon intermediates and polymers business. After the Freeport expansion comes onstream, which is scheduled for early 2007, BASF will close its other nylon polymer facility in Enka, N.C. About 50 jobs will be lost in Enka, the firm says, and about 10 jobs added in Freeport.

Chemical prices rise again

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U.S. prices for all chemicals increased in February, while industrial chemical prices resumed their climb, according to data from the Labor Department. The producer price index for all chemicals rose 0.5% in February from the previous month to 186.3 (1982 = 100) and was 11.2% ahead of the comparable month in 2004. The index for industrial chemicals, which had slipped a slight 0.4% between November and January, more than recovered, jumping 1.2% in February from the month before to 179.2. The index for this sector was up 19.2% over February of last year.

Sterol facility set in Finland

Tall oil fractionator Forchem Oy will build a plant in Rauma, Finland, to separate plant sterol from tall oil, a by-product of the wood pulping industry. Forchem says the plant will cost $53 million to build and will produce some 4,000 to 6,000 metric tons of plant sterol per year, making it the largest such facility in Europe. Arboris, a joint venture between Arizona Chemical and Härting, opened a similar-sized plant in Savannah, Ga., last year. Plant sterols are added to food to reduce blood cholesterol levels. Forchem says the European plant sterol market was worth $75 million in 2003.

Japan Tobacco, Gilead in pact

Japan Tobacco has licensed to Gilead Sciences exclusive rights to develop and commercialize a novel HIV integrase inhibitor, JTK-303, worldwide, excluding Japan. Gilead will pay Japan Tobacco $15 million up front and additional milestone payments of as much as $90 million. Japan Tobacco is also working with Toray Industries and Torii Pharmaceutical to develop and market TRK-820, a selective k opioid receptor agonist discovered by Toray for treating uremic pruritus in hemodialysis patients.

Petro-Canada buys a plant

Petro-Canada has spent about $74 million to buy El Paso Corp.'s 51% interest in Coastal Petrochemical, a p-xylene joint venture in Montreal with Quebec government-owned Société Générale de Financement du Quebec. El Paso and SGF recently spent $135 million to refurbish and restart the unit. The plant feeds an SGF purified terephthalic acid joint venture with Spain's Cepsa, which, in turn, feeds the new Shell-SGF polytrimethylene terephthalate unit. Petro-Canada already supplies mixed xylenes from its nearby refinery.

Synthetic silica plant planned

Minerals Technologies is planning to build a facility in Chester, S.C., producing up to 200,000 tons per year of Synsil, a proprietary composite mineral used to make glass. The firm, a producer of refractory materials and precipitated calcium carbonate for paper production, says it invented the silica- and lime-based material in its Bethlehem, Pa., labs. By using Synsil, the company says, glassmakers can expect better yields, increased throughput, reduced energy use, and lower emissions.

BUSINESS ROUNDUP

GlaxoSmithKline exercised its option to license a third respiratory therapy program from Theravance under an alliance agreement signed last year. Theravance could receive up to $252 million in payments if the new program results in both single-agent and combination products.

Biotage is acquiring all of Argonaut Technologies for $21.2 million in cash, amending a previous agreement. Biotage earlier agreed to buy Argonaut's consumables business for $19.9 million.

Dow AgroSciences and Singapore's MerLion Pharmaceuticals are developing agrochemicals together. Dow AgroSciences plans to screen candidates from MerLion's collection of natural products.

Celanese's Ticona technical polymers unit says it is in negotiations with a number of different companies to sell its Topas cyclo-olefin copolymers business. The company put the business up for sale in December.

Arkema is licensing its tin stabilizer technology to Akzo Nobel's Akcros Chemicals unit. The royalty-based agreement will allow Akcros to make the stabilizers for polyvinyl chloride-based fencing, decking, and siding.

Konarka Technologies and Evident Technologies are collaborating on research to increase the sensitivity of plastic solar cells to a wider range of the light spectrum. The effort will employ Konarka polymers and Evident quantum dots.

 
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