The news last week was both bad and good for oligonucleotide-chemistry-based drug companies and their contract manufacturing partners. On the bad side, Corgentech reported that tests of its lead drug edifoligide, intended to prevent vein graft failure following heart surgery, failed in tests and that Bristol-Myers Squibb has ended a development collaboration. Edifoligide is manufactured for Corgentech by Avecia. La Jolla Pharmaceutical, which recently got unwelcome news from FDA about its oligonucleotide-based lupus treatment Riquent (abetimus), announced that it will lay off about 60 employees, leaving about 95 staff members. On the good side, Pfizer announced that it is working with Coley Pharmaceutical to develop a Coley oligodeoxynucleotide that treats cancers by directing the body's immune system to deliver a targeted antitumor response. Pfizer will make an initial payment of $50 million with the potential for $455 million in milestone payments and royalties. Pfizer has also committed to investing $10 million in Coley's stock in the case of an initial public offering. And Alnylam announced that Dow Chemical will manufacture oligonucleotide-based RNAi therapeutics for drug development programs in age-related macular degeneration and respiratory syncytial virus infection.
A good agricultural economy has prompted Monsanto and FMC Corp. to increase earnings forecasts. Monsanto says its performance is being driven by higher revenues from corn and soybean traits in the U.S., increased corn seed sales in the Europe-Africa region, and higher sales of Roundup and nonbranded glyphosate herbicides outside the U.S. Thus, Monsanto expects earnings per share from continuing operations, excluding unusual items, for its fiscal year ending Aug. 31 to be in the range of $2.00 to $2.05. Previous guidance predicted earnings per share at the upper end of a $1.85 to $2.00 range. FMC is seeing better than expected performance throughout the company, particularly in agricultural products, and now estimates that first-quarter earnings before restructuring and other income and charges will "significantly exceed" 71 cents per share, the top end of analysts' current estimates.
Lanxess' leather business has opened a laboratory and technical center in São Leopoldo, near Porto Alegre in southern Brazil, where the country's tanning and shoe industries are concentrated. Lanxess says the center will serve all of its South American customers. It will also work with Lanxess facilities in Argentina, where the company makes most of its leather chemicals for Latin America.
The Department of Defense has awarded Arch Chemicals a 20-year, $148 million contract for production and handling of hydrazine rocket propellant. Arch, which has supplied hydrazine to the Pentagon for more than 50 years, won the contract back from SpaceChem, a division of Santa Maria, Calif.-based United Paradyne, which was awarded a 20-year contract last year valued at $159 million. SpaceChem had planned to manufacture hydrazine at a new plant that would open in 2007 using technology from French company SNPE. Arch prevailed upon DOE's Defense Energy Support Center to reopen the bidding process last July (C&EN, Aug. 2, 2004, page 13).
International Specialty Products will increase capacity for emulsion styrene-butadiene-rubber elastomers at its Port Neches, Texas, site. ISP says the multi-million-dollar expansion will include the installation of new reactors and finishing lines to increase annual capacity to 750 million lb within two years from its current 400 million lb. ISP acquired the plant in 2003 from the bankrupt firm Ameripol Synpol.
In a cost-saving measure, Solutia plans to shut down the industrial fiber manufacturing unit at its integrated nylon 6,6 facility in Pensacola, Fla., by the end of May. As a result, about 140 contractors and six Solutia employees will lose their jobs. Although the Pensacola site will continue to manufacture nylon intermediates, plastics, and carpet fibers, Solutia will consolidate industrial nylon fiber production at its Greenwood, S.C., plant, which uses newer technology and has lower operating costs. The firm filed for bankruptcy reorganization in December 2003 under the weight of legacy environmental and retiree obligations.
Dr. Reddy's Laboratories has entered an agreement with ICICI Venture Funds, India's largest private equity investor. Under the deal, ICICI will fund the development, registration, and legal costs related to the filing of U.S. generic drug applications during Dr. Reddy's 2004–05 and 2005–06 fiscal years. The investment firm will put in $22.5 million during a first phase of the agreement with an option to invest an additional $33.5 million in a second phase. Upon commercialization of products, Dr. Reddy's will pay ICICI a royalty on sales for five years. "We are pleased to partner with ICICI Venture in what I believe is a unique R&D funding model," Dr. Reddy's CEO, G. V. Prasad, says.
Frontier Carbon, working with TDA Research, says it has begun producing fullerene materials in the U.S. In 2003, Frontier started up a 40-ton-per-year plant in Japan to produce low-cost fullerenes. The firm's new U.S. operation, Frontier Carbon Corp. America, will sell pure, mixed, and functionalized fullerenes under the Nanom name. Established in December 2001, Frontier is a joint venture of Mitsubishi Chemical Corp. and Mitsubishi Corp. TDA, based in Wheat Ridge, Colo., licensed a combustion-based fullerene production process from Massachusetts Institute of Technology that is used in Frontier's Japanese plant.
FPG Oleochemicals, a joint venture between Procter & Gamble Chemicals and Felda Palm Industries, will build a fatty acid plant at its site in Kuantan, Pahang state, Malaysia. According to P&G, the plant will produce up to 120,000 metric tons per year of vegetable-based fatty acids to complement the methyl esters, fatty alcohols, and glycerine already being produced at the site. P&G is seeking talks with "potential customers and partners who are interested in investing in derivative manufacture and may consider Kuantan as a production base," says Martin Herrington, manager of P&G Chemicals Asia.
At the European Coatings Show later this month in Nuremberg, Germany, Bayer will be exhibiting Artwalk, a custom floor coating in which works of art are embedded in a two-component polyurethane system. Bayer has signed agreements with six companies that will market and co-brand the floor covering. According to Werner Ebert, Bayer's construction materials marketing manager, "The combination of artistic design and ultimate functionality makes Artwalk the perfect floor coating" for hotels, restaurants, shipping centers, and other commercial spaces.
Monsanto is buying "selected agricultural assets" from Icoria for $6.75 million in cash, milestone payments, and additional considerations. In 1999, Monsanto and Icoria signed a $55 million collaboration agreement related to functional genomics for agricultural applications. But now Icoria is transitioning out of the agricultural market and into "biomarker-enabled drug discovery," according to CEO Heinrich Gugger. Icoria ended 2004 with 188 employees and expects to have fewer than 120 by the end of the second quarter.
Dainippon Ink & Chemicals has bought Eques Coatings, a Dutch manufacturer of UV-curable coatings and adhesives for optical disks. Eques is the former coatings division of Philips Electronics that was spun off in a management buyout in 1998. DIC says it needs to bolster its presence as the global market for the UV coatings becomes increasingly competitive. DIC says it hopes to boost its 50% share of the global market to 60%.
China Petroleum & Chemical Corp. (Sinopec) increased its net profit by 70% to $3.9 billion in 2004 compared with 2003. Sales in 2004 were up 42% to $71.3 billion. Chemicals accounted for 30% of operating profit in 2004, compared with 9% in 2003, even though chemicals represented 20% of sales in both years. The conglomerate noted that it boosted annual ethylene capacity by 270,000 metric tons at its subsidiary Qilu Ethylene. Subsidiary Yizheng Chemical Fibre saw its net profit fall by 3.7% to $28 million. Yizheng disclosed that its board has approved spending $175 million to build a 1 million-metric-ton purified terephthalic acid unit to open in 2007.
Crompton Corp. and the private equity firm Hamilton Robinson are combining their respective polymer processing equipment businesses into a joint venture called D-S LLC. It will have annual sales of about $220 million, $180 million of which will be from Crompton's Davis-Standard equipment unit. Crompton CEO Robert L. Wood has said that he wants to sell Davis-Standard.
BASF is increasing vinyl chloride copolymer capacity in Ludwigshafen, Germany, to 12,000 metric tons per year. The company says the $8 million project is in response to growing demand for specialty coating systems.
Polycarbon Industries experienced an explosion at its Leominster, Mass., plant on March 22. The custom synthesis firm says it is investigating the cause of the incident, in which one employee suffered a minor burn.
PPG Industries' chairman and CEO, Raymond W. LeBoeuf, 58, will retire on July 1 after nearly 25 years with the company. Charles E. Bunch, 55, president and chief operating officer, has been elected president and CEO, effective immediately.
Biogen Idec and Elan Corp. have reported a third death from progressive multifocal leukoencephalopathy, a rare but often fatal disease associated with Tysabri, the firms' multiple sclerosis drug. The drug was pulled from the market in February after two deaths were discovered.
Bayer will build a polyurethane formulation facility, or system house, near New Delhi, its first on the Indian subcontinent. In addition, Bayer is doubling capacity at Bayer Jinling Polyurethane, a polyurethane foam joint venture in Nanjing, China. Both projects will be complete around the end of the year.
Yara, the fertilizer spin-off of Norsk Hydro, will acquire a 30% stake in Burrup Holdings, which is building an ammonia plant on Australia's Burrup Peninsula set to open later this year. Burrup is considering ammonium nitrate and urea facilities as well.