Issue Date: May 2, 2005
Shire Pharmaceuticals' plan to acquire the protein therapy firm Transkaryotic Therapies (TKT) in a deal valued at about $1.6 billion is meeting stiff opposition from a major investor group. Britannic Asset Management, which owns 2% of Shire, says the midsized U.K. drug company is "destroying shareholder value" by overpaying for the unprofitable firm. In another sign of discontent over the deal, TKT's CEO, Michael J. Astrue, resigned after the sale was announced. Stock analysts at Morgan Stanley, however, issued a report saying the acquisition will strengthen Shire's existing renal and hematology products and provide a pipeline for future growth. Cambridge, Mass.-based TKT markets Replagal, a genetically engineered form of -galactosidase A for treatment of Fabry disease, and will begin marketing Dynepo (epoetin delta), an anemia treatment, in Europe next year. Shire CEO Matthew Emmens told shareholders last week that the acquisition will result in $200 million in tax breaks and cost savings. He also pointed to growth potential from TKT's pipeline. "We expect that TKT's protein-based drugs and clinical development pipeline will enable us to diversify and broaden our revenue base while continuing to grow our profits," he said. A team of Shire executives is reported to have met with Britannic last week, but failed to persuade the group of the logic of the deal.
Degussa is buying out Cytec Industries' 50% stake in Cyro Industries, a polymethyl methacrylate joint venture the companies have shared since 1976. For $95 million, Degussa will get full ownership of a company that generated about $320 million in sales in 2004 and that has plants in Wallingford, Conn.; Fortier, La.; Osceola, Ark.; and Sanford, Maine. Degussa will integrate Cyro with its other methacrylate business, Rhm, which uses the Plexiglas brand name in Europe. Cytec says it will use the proceeds to pay down debt from its recent purchase of UCB's surface specialties business.
Danisco is planning changes at Genencor International following its acquisition of the enzymes producer. Danisco completed the purchase of Genencor on April 19 by both buying out Eastman Chemical, Danisco's joint-venture partner, and purchasing Genencor's publicly traded shares for a combined $615 million. Danisco says it has no long-term interest in owning all of Genencor's fledgling health care business and that it is seeking new shareholders in the operation. In addition, Genencor CEO Jean-Jacques Bienaim has stepped down; he was replaced by Danisco board member Robert H. Mayer.
BASF has launched what it describes as a new generation of binders for architectural coatings. In the products, inorganic nanoparticles are homogeneously incorporated into organic polymer particles of water-based dispersions. The resulting nanocomposite dispersions combine the hardness and permeability of inorganic binders with the elasticity and water resistance of organic binders, the company says. BASF is one of 23 partners from seven European Union countries in Nanosafe2, a project intended to develop methods for the safe use of nanoparticles. Its main emphasis is on workplace and plant safety.
The industry-commissioned assessment of the economic impact of REACH--the regulatory program for chemicals proposed by the European Commission--was published last week, and it has something for everybody. Environmental activists welcomed the report, by consultants KPMG, because it concludes that costs would be at about the level estimated earlier by the commission--$3.2 billion over 11 years for the European chemical industry and $3.6 billion to $7.4 billion for the economy overall. Industry economists had estimated much higher costs. Executives at chemical companies and their customers, on the other hand, can point to conclusions that REACH as currently proposed would have a particularly dramatic impact on small and medium-sized companies. The report examined case studies across the automotive, electronics, flexible packaging, and inorganic materials value chains. According to a joint statement from the European Chemical Industry Council and UNICE, the European employers federation, the case studies show that the cost of REACH will force companies to rationalize their portfolios, that European industry competitiveness needs to be safeguarded, that the loss of chemical substances has to be synchronized with market needs, that a more cost-effective REACH program will foster innovation and business flexibility, and that confidential business information remains a key issue.
Huntsman Corp. plans to expand its U.S. maleic anhydride capacity by 100 million lb per year, bringing its domestic capacity to 335 million lb by the first quarter of 2008. In the U.S., Huntsman produces the unsaturated polyester intermediate in Pensacola, Fla. The company is evaluating several of its sites for this expansion, however. The firm said recently that maleic anhydride is one of the best businesses in its portfolio (C&EN, April 25, page 13).
Lanxess' previously announced restructuring in styrenics and fine chemicals will lead to the loss of up to 1,200 jobs, according to Chairman Axel Heitmann. Restructuring of these two units is particularly urgent, he says, to help the company regain profitability following the net loss of almost $15 million it posted in its 2004 pro forma results. Savings of roughly $130 million a year are required to enable these businesses to catch up with the competition, the company said at its first annual results press conference, held in Dsseldorf, Germany, last week.
New Jersey's Department of Environmental Protection has approved the $13.2 million cleanup of polychlorinated biphenyl-contaminated soil at the Hatco site in Fords, N.J. W.R. Grace, former owner of the site, and synthetic lubricant maker Hatco Corp., present owner, will fund the cleanup. An unusual feature of the deal will hold remediation firm Weston Solutions and the insurance firm Ace USA responsible for future liability involving the project. Because Grace is bankrupt, the court supervising the firm must approve the agreement at a hearing scheduled for later this month.
The biotechnology firm Diversa has reached an agreement with China's BITeomics to develop enzymes for breaking fluids, which are used to maximize the recovery of oil or gas from wells. Diversa says its Pyrolase enzymes can do this better than can the chemical breakers commonly employed in China. "We see this new relationship with BITeomics as a first step for Diversa in China," says William H. Baum, an executive vice president. Separately, Diversa reported that product sales in its first quarter were more than 90% higher than in the same period last year.
BASF will build a plant in Schwarzheide, Germany, for the biodegradable plastic Ecoflex. The facility will have capacity for 6,000 metric tons a year when it opens early next year, complementing an 8,000-metric-ton plant in Ludwigshafen, Germany. Ecoflex is a biodegradable copolyester used primarily in blends with renewable raw materials such as starch, cellulose, and polylactic acid. "The world market for biodegradable materials is developing very dynamically," says Dietmar Heufel, head of global business management for Ecoflex.
The massive Airbus A380 flew successfully last week with the help of materials from at least two chemical companies. DSM's Stanyl nylon engineering polymer became the first thermoplastic used by Rolls-Royce in aircraft engines. A Stanyl grade was developed specifically for use in the infill panels of the engines to reduce noise and minimize environmental impact. DuPont materials used to construct the plane include Kevlar and Nomex aramid fibers, Tefzel fluoropolymers, and Oasis wire insulation. When the double-decker A380 begins commercial flights in 2006, it will be able to carry 555 passengers.
DuPont has signed a research agreement with the National Chemical Laboratory in Pune, India. Thomas M. Connelly Jr., DuPont's chief science and technology officer, says the agreement boosts his company's efforts "to go where the growth is and globalize our R&D operations." The lab, part of India's Council of Scientific & Industrial Research, has 300 full-time Ph.D. scientists on staff and 360 doctoral students with expertise in chemical and materials science. Its first project for DuPont will concentrate on titanium dioxide.
Thailand's National Petrochemical will expand the size of the ethylene plant it is building to 1 million metric tons per year from the 410,000 metric tons it was previously planning (C&EN, Nov. 22, 2004, page 32). The project will now cost $760 million, up from $444 million previously, and is expected to start up in 2009. It also includes polyethylene and ethylene vinyl acetate plants. The project is a venture of National Petrochemical and its parent PTT, formerly a state-owned company.
PharmaCore has acquired aromatic cross-coupling technology from DSM Pharma Chemicals. PharmaCore, a provider of small-molecule chemistry for drug discovery, says the technology will give it an economic edge in producing unsymmetrical biaryl compounds.
Arch Chemicals says the U.S. Defense Department has lifted the suspension of the firm's contract to supply hydrazine propellants beginning in 2007. The move came after the department denied a competing bidder's protest.
Bayer and Asahi Glass have signed a license agreement on double metal cyanide polyol technologies. Bayer is allowing Asahi to sell such polyols worldwide, while Asahi is allowing Bayer to sell the polyols in Japan using its Preminol technology.
GlaxoSmithKline has reached a consent decree with FDA regarding its Cidra, Puerto Rico, plant, where production of Paxil CR and Avandamet was halted in March. GSK says it has determined the manufacturing problems and is remedying them. The firm expects to resume making the two drugs by midyear.
Lyondell Chemical has expanded capacity in Rotterdam, the Netherlands, for its Arcosolv PM propylene glycol methyl ether solvent by more than 35% to 130,000 metric tons per year. With the increase, Lyondell's global capacity for the product will be 190,000 metric tons.
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