Business Concentrates

Serono signs development deals in small and large molecules

The Swiss biopharmaceutical firm Serono has entered two agreements for molecular development and commercialization. In the first, Serono is working with California-based BioMarin to develop two BioMarin small-molecule drug candidates: Phenoptin and Phenylase. Both products have shown potential in the treatment of phenylketonuria, and the active ingredient in Phenoptin, a synthetic form of the naturally occurring enzyme cofactor 6R-BH4, may also be useful in treating diabetes and cardiovascular diseases. Serono will make an up-front payment of $25 million to BioMarin, plus milestone payments of up to $232 million and royalties. In the second agreement, Serono will collaborate with the Swiss company NovImmune to develop two of NovImmune's fully human monoclonal antibodies, NI-0401 and NI-0501. One antibody targets the CD3 antigen, a regulator in the activation of T cells, a hallmark of many autoimmune diseases. The other targets interferon-γ, a cytokine involved in the regulation of immune and inflammatory responses. The two materials are currently in preclinical development. NovImmune will be responsible for the two products until the completion of Phase IIa clinical trials, when Serono will take over development. Serono will make a $6.1 million equity investment in NovImmune and could make milestone payments of up to $105 million, as well as pay royalties.

Sumitomo buys Dow LEP unit

Sumitomo Chemical has purchased Dow Chemical's Lumation light-emitting polymers business for an undisclosed sum. Dow calls Lumation "an important, and potentially disruptive, advance" in organic light-emitting diode technology, but one that the company doesn't have the market presence to quickly advance. Sumitomo, in contrast, says it already offers fluorescent and phosphorescent LEPs and is developing new materials such as dendrimers in cooperation with the U.K. firm Cambridge Display Technology.

DuPont boosts MIT funding

DuPont is adding $25 million in funding to the DuPont MIT Alliance, a next-generation materials research program it established at Massachusetts Institute of Technology in 2000. DuPont originally invested $35 million over five years. At MIT last week, DuPont Chief Technology Officer Thomas M. Connelly Jr. announced a five-year extension, creating a 10-year, $60 million commitment that he called the largest corporate R&D investment at MIT. The first five years focused on new materials from nature and biology, Connelly said, while the second five will include nanocomposites, nanoelectronic materials, alternative energy technology, and safety and protection materials.

EaglePicher keeps investing

EaglePicher Pharmaceutical Services (EPPS) continues to invest despite the recent Chapter 11 bankruptcy filing by its parent company. The firm says it has completed a previously unannounced current Good Manufacturing Practices radiolabeling suite in Lenexa, Kan., in anticipation of a doubling of radiolabeling revenues in the next three years. It's also upgrading analytical capabilities in Lenexa and Harrisonville, Mo. EPPS President Steven E. Westfall says capital spending will continue at about 15% of 2005 sales and that future projects will add large-scale hydrogenation, and possibly fermentation, capabilities.

BP takes blame for accident

A BP investigative team turned up a number of failures that it says led to the isomerization unit explosion and fire at the firm's Texas City, Texas, refinery on March 23. More than 170 people were injured and 15 died in the accident. "The mistakes made during the start-up of this unit were surprising and deeply disturbing," says Ross Pillari, president of BP Products North America. Among other things, the investigative team found that managers overfilled and then overheated the unit's raffinate splitter and that water or nitrogen in the tower at start-up may have contributed to the explosion and fire. BP is contacting families of the deceased to expedite claim settlements. James W. Stanley, former deputy assistant secretary for OSHA, is leading a company review of processes and operations.

Bayer executive pleads guilty

A former Bayer executive has agreed to plead guilty, serve four months in prison, and pay a $50,000 fine for his role in fixing prices for rubber chemicals, the U.S. Department of Justice says. Wolfgang Koch is the second former Bayer executive to plead guilty to participating in the scheme, which ran from January 1999 to December 2001. Two former Crompton executives have also pleaded guilty to participating in the scheme. Their employers earlier pleaded guilty to the charges.

Investment firm opposes Blackstone in Celanese deal

Minority owners of Celanese AG shares have a new ally in the fight against the investment firm Blackstone Group and its attempt to complete its purchase of the chemical maker. U.S. investor group Paulson & Co. says it has amassed more than 11% of Celanese AG--enough to prevent Blackstone from completing the buyout. Blackstone bought 85% of Germany-based Celanese AG last year, gaining operational control. It then established Celanese Corp. as a U.S.-based company with a listing on the New York Stock Exchange. However, Blackstone needs to own at least 95% of Celanese AG to complete the takeover and squeeze out remaining shareholders. Paulson is holding out for at least $92.31 a share, claiming that is the true value of the shares based on the January initial public offering price for the U.S.-based company. Paulson presented a resolution at the Celanese AG annual meeting last week opposing Blackstone's $53.11 per share offer to remaining minority shareholders.

Akzo forms biotech pact

Akzo Nobel's Organon business will collaborate with Lexicon Genetics to discover, develop, and commercialize biotherapeutics. The pair will select up to 300 genes that encode secreted proteins or potential antibody targets, and Lexicon will separately contribute two of its advanced drug discovery programs. Organon will pay Lexicon $22.5 million for access to its drug target discovery capabilities and the exclusive right to codevelop biotherapeutic products that modulate the selected genes. Organon will also provide research funding to Lexicon totaling up to $50 million over four years.

Syngenta signs biopharma and agchem deals

The agrochemical maker Syngenta has entered a three-year collaboration with China's Hubei Biopesticide Engineering Research Center. HBERC will collect microorganisms from natural habitats in China, screen them for biological activity, and produce information on their chemical properties. Syngenta will provide technological and financial support and will pay HBERC royalties on any products developed from the research. Separately, Syngenta's biopharma unit has entered a drug development agreement with Fulcrum Pharma. Syngenta aims to move its lead projects toward clinical development by implementing document-driven tools and processes from Fulcrum.

Chemical price rise slows

U.S. chemical prices continued to increase in April, according to data from the Labor Department. The producer price index for all chemicals rose a moderate 0.3% from March to an index of 189.9 (1982 = 100), down from a 4.1% month-to-month rise from February to March. The April index was up 11.9% from the comparable month in 2004. Meanwhile, the index for the important industrial chemical segment rose 0.6% from the previous month to 187.7, again much lower than the 7.9% month-to-month increase seen in March. The April index for industrial chemicals was up 21.9% from the same month last year.

Siegfried buys bulk drug firm

The Swiss fine chemicals company Siegfried has acquired Penick Corp., a Newark, N.J., maker of controlled substances such as codeine and morphine, for $30 million. The deal follows the recent purchase of another New Jersey controlled substances firm, Novus Fine Chemicals, by India's Malladi Drugs & Pharmaceuticals (C&EN, May 16, page 14). Penick holds one of four currently issued import licenses for controlled substance raw materials. Siegfried says it will move Penick's operations to its existing facility in Pennsville, N.J.

Dow sets new trucking rules

In response to what it sees as troubling trends in the North American trucking industry, Dow Chemical is setting new shipping standards for two of its businesses. The company says the chemical industry has been suffering because of limited driver availability, high fuel costs, transportation industry consolidation, and the strengthening North American economy, which together have strained the transportation system. Across its chemicals and intermediates and its performance chemicals and thermosets businesses, Dow will set new standards such as full loading requirements and minimum order quantities, the kinds of standards that previously varied from business to business. "Dow has set standards designed to make the most efficient use of the shrinking shared transportation industry resources," says Rob Broomham, director of distribution sales at Dow.

BUSINESS ROUNDUP

• BASF will establish a polyurethane system house at an existing site in Bangpoo, Thailand, by the first quarter of 2006. The plant will produce tailor-made polyurethane systems for industries such as footwear, appliances, automotive, and construction.

• Boehringer Ingelheim has entered a long-term manufacturing agreement to produce VEGF-2 (vascular endothelial growth factor 2) plasmid DNA for Corautus Genetics. The therapy is now in Phase IIb trials for the treatment of severe angina.

• Innovene, the BP olefins and derivatives business, has completed a 650 million-lb-per-year ethylene expansion at its Chocolate Bayou, Texas, complex. The project adds capacity and helps the site meet new Texas air quality standards.

• Fournier Pharma has extended a chemistry service agreement with ComGenex, a Hungarian drug discovery service provider. ComGenex says it will be involved with design of initial chemical structures during the three-year agreement.

• General Electric has opened a center of excellence for the automotive industry in Southfield, Mich. The company says the center houses all its automotive-related businesses, including GE Advanced Materials, GE Infrastructure, and GE Energy.

• Celanese has sold its polybenzimidazole fire-resistant fiber and polymer business to the InterTech Group, a security services firm. InterTech says existing management and employees will remain with the business, which is based in Charlotte, N.C., with manufacturing in Rock Hill, S.C.

• BP and Nova Chemicals have signed a binding agreement to merge their European styrenic polymers business into a joint venture to be called Nova Innovene. The combination was announced in November 2004 and is expected to be complete in the third quarter of this year.