Business Concentrates

India's Malladi buys U.S. API firm

India's Malladi Drugs & Pharmaceuticals has acquired Novus Fine Chemicals, a Carlstadt, N.J., maker of pseudoephedrine, phenylephedrine, and other active pharmaceutical ingredients (APIs). The $23 million deal, backed by private equity investors from the U.S. and India, is the first purchase of a U.S. API producer by an Indian company, according to Novus President Joseph Fusco. Novus and Malladi are both leading makers of pseudoephedrine, a controlled substance that can't be imported into the U.S. Fusco notes that Novus already buys feedstock ephedrine from India and now will have ensured supply of the raw material via its ties with Malladi. Fusco says the Indian firm also will invest in expanding Novus' pilot-plant capabilities to create a partner for drug and biotechnology customers that combines U.S. manufacturing with low-cost Indian intermediates production. "We see this as the future for the API business," he says.

Victrex buys Degussa plant

Victrex, the British producer of PEEK brand polyether ether ketone polymer, has acquired a Degussa plant in Seal Sands, England, that makes difluorobenzophenone, the main raw material for PEEK. The price was about $30 million and includes a fluoboric acid plant. "The transaction completes another step for Victrex in consolidating our supply chain," CEO David Hummel says. Degussa announced late last year that it had acquired 80% of the Chinese firm Changchun Jida High Performance Materials as part of an effort to enter the polyether ether ketone business, which now is dominated by Victrex.

National Starch debuts new films

A National Starch project to incorporate soaps, shampoos, hair dyes, and other personal care products into thin dissolvable films is becoming a reality. At the New York Society of Cosmetic Chemists Suppliers' Day last week, National Starch announced a manufacturing and marketing alliance with films maker Acupac Packaging to commercialize dissolvable film technology for personal care companies. At the show, the partners demonstrated the convenient single-use films, which are based on starch, acrylate, and other film-forming materials.

Job cuts set at two biotechs

Two small biotech firms are cutting jobs as part of refocusing efforts. Aphton will reduce its staff, which numbered 51 at the end of 2004, by 35% following a decision to stop developing Insegia, a drug for pancreatic cancer that recently failed a clinical trial. Aphton will focus on an antibody it is developing with Xoma and on other cancer treatments. NeoRx is scaling back operations to focus on developing picoplatin (NX 473), a platinum cancer drug. The firm has discontinued clinical development of STR, its compound for multiple myeloma and other indications, and says it will cut staff by 40% to about 29 employees.

AaiPharma files for Chapter 11

AaiPharma filed for bankruptcy reorganization last week after announcing an agreement to sell its pharmaceuticals division, which accounts for about a third of its sales, to an unspecified buyer for $170 million. In addition, the firm announced a deal to secure $210 million in debtor-in-possession financing to cover operations while in bankruptcy. The firm, which last year lost a battle with Cephalon to purchase Cima Laboratories, said recently that it would have to restate third-quarter 2004 earnings.

Bayer expands polycarbonates

Bayer MaterialScience is expanding its global polycarbonate capacity by 60,000 metric tons per year by year-end and is considering additional investments after that. The company, which also expanded capacity by 60,000 metric tons last year, says construction is under way on projects that will raise its total polycarbonate capacity to 1.05 million metric tons at plants in Texas, Belgium, Germany, and Thailand. In addition, the company says it will accelerate its $450 million polycarbonate investment in Caojing, China. As a result, it will have 200,000 metric tons of capacity there by 2007 instead of 2009 as originally planned. The company expects polycarbonate growth of 8 to 10% annually. "We want to keep pace with this growth and are therefore urgently looking into options for further expansion," says Günter Hilken, head of Bayer's polycarbonate business.

ImClone ending chemistry push

ImClone Systems, maker of the antibody drug Erbitux, is discontinuing a small-molecule development program. The action will result in the elimination of 40 to 50 jobs and the closure of a chemistry lab in Brooklyn, N.Y. The company notes that its pipeline and research heritage are in development of antibodies.

Crompton is rechristened

As soon as Crompton completes its pending merger with Great Lakes Chemical, first announced in March, it will be reborn as Chemtura. CEO Robert L. Wood says: "We will not be Crompton. We will not be Great Lakes. We will be the Chemtura team, focused on the future." Crompton shareholders will be asked to approve the new name when they vote on the merger later this year.

Air Products, Praxair sign H₂ fuel deals

Air Products & Chemicals has signed an agreement with Proton Energy Systems for the supply of PES's HOGEN hydrogen generators, which are based on proton-exchange membrane electrolysis, for hydrogen filling stations. Air Products is planning three such stations for California in 2005. In addition, the companies are working on hydrogen filling stations in Vermont and at the University of Nevada, Las Vegas. Separately, Praxair has inked a deal to become PES's exclusive supplier of HOGEN systems in the U.S. and Canada for the electric utilities industry.

Akzo Nobel sets investments

Akzo Nobel will invest roughly $30 million in two chemical businesses in Sweden. It will expand its ethyleneamines plant in Stenungsund and will build a water treatment chemicals plant in Skoghall. The expansion in Stenungsund is already under way and will boost annual capacity for ethyleneamines to 75,000 metric tons by the end of 2006. The new Skoghall facility, scheduled to open by the end of the year, will produce up to 35,000 metric tons per year of ferric chloride.

Codexis enters production pact

In a deal that marks Codexis' first foray into direct product marketing, the biotechnology firm has entered a manufacturing and supply agreement with India's Shasun Chemicals & Drugs for a generic drug intermediate. Under the deal, Shasun will manufacture a compound developed via Codexis' biocatalytic technology platform. Codexis will market the product.

Employment rises modestly

U.S. chemical employment increased in April for the second straight month. April also marked the highest employment level this year. According to seasonally adjusted Labor Department data, the U.S. chemical industry had 877,500 employees in April, up 800 from th previous month; however, the April number was still down 13,300 from the comparable month in 2004. The number of hourly production workers, meanwhile, declined by 1,000 on a month-to-month basis to 510,800 in April. The latest number was 9,000 fewer than that for April of last year.

DSM invests in fuel additives ...

DSM Venturing has taken an interest in Oryxe Energy International, an Irvine, Calif., firm that develops additive technologies for cleaner-burning fossil fuels. The two companies already have a supply agreement under which DSM provides an ingredient, dubbed Isomixtene, for an Oryxe additive. Oryxe is currently commercializing two diesel additive products. It says target markets include Texas and California because they have strict automotive-emissions regulations.

... and closes vitamin plant

DSM will close its bulk vitamin C plant in Belvidere, N.J., the last such plant in the U.S., and consolidate production in Dalry, Scotland. The company attributes the move, which will eliminate about 150 jobs, to a competitive market and a drive to optimize assets. DSM is also developing vitamin C production alliances in China and its own one-step fermentation process. The Belvidere site will continue to formulate vitamins and produce arachidonic acid for baby formula, the firm says.

Rhodia advances silicone venture

Rhodia and China National Blue Star are looking to broaden a previously announced silicones agreement (C&EN, Oct. 25, 2004, page 18). The two partners already plan a plant in Tianjin, China, that will make methylchlorosilane using Rhodia technology. The plant will have an initial capacity of 200,000 metric tons per year and is slated for startup in fourth-quarter 2007. Now, the two are looking at combining their upstream and downstream silicone activities in a strategic alliance. The partners say such an alliance would combine Blue Star's silicon metal production, both firms' silicon intermediates production in France and China, and Rhodia's full range of silicone specialties.

Dow, DuPont in ag R&D deals

Dow AgroSciences has entered a two-year R&D pact with the Biodesign Institute at Arizona State University. The collaboration will focus on plant-made vaccines for the animal health industry. DuPont Crop Protection, meanwhile, has signed a research agreement with Seattle's CompleGen under which CompleGen will employ its XenoGene system to discover targets of crop protection compounds that are identified by DuPont. CompleGen calls this approach "reverse chemical genomics."

BUSINESS ROUNDUP

Evotec OAI has restructured its supervisory board to support the company's new focus on drug discovery and development. Development of a central nervous system drug pipeline, the company told shareholders last week, is one of the main drivers for its future success.

Air Products & Chemicals has been picked to supply bulk specialty gases to Samsung's recently expanded dynamic random access memory plant in Austin, Texas. The gases are nitrogen trifluoride, silane, nitrous oxide, and hexafluoroethane.

Solvay will sell its industrial films business to the German plastic films maker Renolit for roughly $425 million. The business had sales last year of more than $600 million.

Solvay will build a new unit for Algoflon polytetrafluoroethylene fine powders and a new line for Hyflon PFA/MFA fluorinated copolymers. The projects, in Spinetta Marengo, Italy, will be operational in 2007, Solvay says.

Occidental Petroleum has sold 11 million shares of Lyondell Chemical stock for about $300 million, resulting in a gain in second-quarter net income of approximately $90 million. Occidental still owns 30.3 million shares, or about 12% of Lyondell stock.

Eastman Chemical has begun a cash tender offer for about $500 million in outstanding notes. The action is part of Eastman's plan to reduce debt and the company's annual interest expense.