Anticipating its Jan. 31 launch on the Frankfurt stock market, Lanxess is cutting personnel expenses. "We must adapt our cost structures to the economic requirements," Chairman Axel C. Heitmann says. The firm aims to cut nearly $30 million this year, primarily by holding down pay for many of its German employees. Some 3,900 employees at the company's German sites will see cuts in any payments above collectively agreed rates. Managers will also shoulder some of the savings. The salaries of German managers will be frozen this year, and smaller budgets will be available for salary increases for managers in foreign operations. In the Jan. 31 spin-off, Bayer will grant its stockholders one Lanxess share for each 10 Bayer shares they hold. Lanxess will comprise most of Bayer's chemical activities and about a third of its polymer operations. The spin-off will leave Bayer free to concentrate on health care and nutrition, agrochemicals, and what it defines as high-tech polymers and materials.
This year's focus for Degussa will be "consistent use of opportunities for organic growth," particularly to enhance positioning in markets such as Eastern Europe and China. That's the word from Chairman Utz-Hellmuth Felcht, who has revealed the company's capital expenditure plans for the next three years. Between now and 2007, the company plans investments of about $3 billion. The figure for 2005, about a third of the total, is a 13% increase over 2004. The budget includes funding for a methionine plant in Antwerp, Belgium; a plant for isophorone and derivatives in Herne, Germany; and further investments in R&D facilities.
Occidental Chemical will exit the unprofitable vinyl specialty resins business by closing its plant in Pottstown, Pa., resulting in the loss of about 220 jobs. The company says it will take a pretax fourth-quarter charge of $53 million to cover the closure. In addition, the firm will take a $12 million pretax charge related to closure of chlor-alkali facilities in Delaware City, Del., that use mercury-cell technology. OxyChem says the moves are intended to strengthen its core chlor-alkali and PVC businesses.
DuPont has acquired a 10% interest in brand authentication technologies firm Identif, a subsidiary of German biotech firm November AG. Financial details are not available. However, along with the stake in Identif, DuPont has obtained a five-year exclusive license to market the firm's nanotech- and biotech-based eye- and machine-readable anticounterfeit technologies. Incorporated in packaging and labels, the technologies guard against forged drugs, luxury goods, media products, and similar items.
FDA has approved active pharmaceutical ingredient producer Ash Stevens Inc. to manufacture clofarabine, the active pharmaceutical ingredient in Clolar, a Genzyme drug used to treat a pediatric leukemia disorder. Ash Stevens CEO Stephen Munk says the API will be made in his firm's Riverview, Mich., plant. During the past two years, Ash Stevens won approval to manufacture 5-azacitidine, the API in Pharmion's Vidaza, and bortezomib, the API in Millennium Pharmaceutical's Velcade.
Strube wins Palladium Medal
Jürgen F. Strube, supervisory board chairman of BASF, will receive the International Palladium Medal Award of the American Section of the Société de Chimie Industrielle. Strube will receive the medal at a dinner to be held on May 26 at the Roosevelt Hotel in New York City. The medal, awarded every other year, is given to an individual who has made significant contributions to the chemical industry. Recent recipients include former Crompton CEO Vincent A. Calarco, Dow Chemical Chairman William S. Stavropoulos, and former Eastman Chemical CEO Earnest W. Deavenport Jr.
After nine months, Geo Specialty Chemicals emerged from bankruptcy reorganization on Dec. 31. The privately held firm, which had faced a cash crunch, repaid prebankruptcy debt with newly issued financing of $125 million. According to William P. Eckman, executive vice president, the firm's financial performance has improved, with revenues up 11% to $170 million and operating income up 45% to $22 million in the 12 months that ended on Nov. 30.
Novartis and Infinity Pharmaceuticals are designing a small-molecule collection using Infinity technology that applies diversity-oriented synthesis. Novartis says that it previously made a "significant equity investment" in Infinity, and that it expects to pay an additional $10 million over the course of the two-year cooperation. Infinity has also struck a deal with Johnson & Johnson under which J&J will identify small-molecule therapeutics using Infinity's existing compound collection. J&J will pay an up-front license fee and make an equity investment in Infinity. Infinity says its combinatorial synthesis techniques deliver complex three-dimensional molecules with multiple stereocenters.
SAFC, Sigma-Aldrich's custom chemical division, has broken ground on an expansion of its Madison, Wis., facility, site of the Tetrionics business that it acquired in June. According to SAFC, when the project is completed in early 2006, it will add 38,000 sq ft to an existing 23,500-sq-ft building. The expansion is being driven by an increase in demand for custom chemical manufacturing services for highly potent active pharmaceutical ingredients, including FDA category III and IV items, the firm says.
AstraZeneca is pulling its application with the European Medicines Authority for Iressa (gefitinib) following findings that in a lung cancer trial Iressa failed to significantly prolong survival when compared to a placebo. The company calls the results "disappointing," but it remains in discussions with U.S. FDA and Japanese health authorities about the drug. Separately, AstraZeneca received an FDA warning letter about a direct-to-consumer ad for the cholesterol-lowering medication Crestor (rosuvastatin). According to FDA, the company makes "false or misleading safety claims that minimize the risks associated with Crestor.
Dover Chemical plans to increase capacity at its Dover, Ohio, liquid organophosphite plant during 2005 because of high demand for the polymer stabilizer trisnonylphenol phosphite (TNPP). The company says the debottlenecking process will add 10,000 tons of annual capacity for TNPP. Dover is also studying adding TNPP production at its Hammond, Ind., plant. In addition, the firm says it will add 10,000 tons of capacity in Dover to make the polyvinyl chloride stabilizer triphenyl phosphite (TPP) and 5,000 tons to make TPP esters.
In a preliminary prospectus filed with the Securities & Exchange Commission, Celanese says it will gross as much as $1.2 billion in an initial public offering of its shares. The share price has been set at a maximum of $21. Celanese is offering 50 million shares, plus 7.5 million shares set aside in case the deal's underwriters need to cover over-allotment. The company is also making a $200 million offering of preferred stock. The company plans to use the net proceeds of about $950 million to pay down debt and pay out a special dividend to shareholders. Last fall, the company said it would raise about $750 million in the stock offering.
Following last year's closure of a plant in Nashua, N.H., Dow Chemical has sold assets related to its Hamposyl sarcosinate surfactants business. Dow sold technology, surplus equipment, and North American rights to the Hamposyl trademark to Chattem Chemicals. Dow dealt proprietary business information, a global customer list, and the rights to the Hamposyl trademark outside North America to Japan's Kawaken Fine Chemicals. Separately, Dow has completed the sale of its Derakane resins business to Ashland for $90 million.
U.S. chemical shipments increased 4.6% in November from the previous month, according to the latest seasonally adjusted data from the Commerce Department, and they were up 11.0% from the same month in 2003. Demand for chemicals, excluding pharmaceuticals, rose 4.7% from October and 11.8% from the year-earlier month. Meanwhile, inventories for all chemicals rose a slight 0.8% from October and were up 5.4% from November 2003, while inventories for chemicals, excluding drugs, increased 1.1% and 4.8%, respectively. The inventories-to-shipments ratio for all chemicals declined to 1.29 from 1.34 in October and 1.35 in the previous November. The ratio, excluding pharmaceuticals, fell to 1.02 from 1.05 in October and from 1.08 a year earlier.
China Petroleum & Chemical Corp. (Sinopec) has offered to buy the 30% of Sinopec Beijing Yanuha Petrochemical that it doesn't already own for $494 million. Sinopec would pay owners of the shares, listed on the Hong Kong stock market, an 11% premium above their recent closing price. Sinopec says consolidating the subsidiary would eliminate intragroup competition and make for a more efficient group structure. Four other Sinopec subsidiaries are listed in Shanghai, and analysts expect that they may be acquisition candidates.
Ortho-McNeil, a Johnson & Johnson company, and Arena Pharmaceuticals are collaborating to develop drug candidates for diabetes and other conditions. Arena will receive an up-front payment of $17.5 million and could receive up to $295 million in milestones. According to Arena, the project will first focus on two of its lead compounds that act on a G-protein-coupled receptor for which information has been lacking. This receptor is found mainly on pancreatic islet beta cells, where insulin is produced.