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Business

Business Concentrates

July 4, 2005 | A version of this story appeared in Volume 83, Issue 27

DuPont invests in R&D at home

DuPont will spend $80 million on its R&D center in Wilmington, Del., and will assist the state of Delaware in various technology initiatives. Delaware will provide $5 million for the initiatives. The bulk of the money from DuPont will go toward a new innovation center at the company's Experimental Station. The center will house scientists and sales personnel together, in line with DuPont's "market back" approach, in which R&D focuses on marketplace needs. CEO Charles O. Holliday Jr. says DuPont is excited about the opportunity to "continue to put our science to work here in Delaware." DuPont also has been working with organizations such as India's National Chemical Laboratory in an effort to "go where the growth is" and globalize its R&D. As part of the Delaware agreement, the company will donate intellectual property to the state's Emerging Technology Center and collaborate with the state on biotechnology seminars for high school students.

Police probe hits Rhodia

As part of an investigation begun in March into the accuracy of Rhodia's accounts between 1999 and 2002, French police last week searched the firm's headquarters. The company says it is cooperating fully. "A search is under way as part of the inquiry that has been opened," says a spokeswoman, who adds that she does not know whether documents were taken away. Police also searched France's finance ministry last week. Finance Minister Thierry Breton was on Rhodia's board from early 1998 until late 2002 and headed Rhodia's audit committee.

Sartomer buys Goodyear resins

Sartomer has agreed to buy Goodyear's hydrocarbon adhesive resins business for $65 million. Sartomer, a unit of French energy firm Total, will take over a manufacturing unit in Beaumont, Texas, adjacent to a Goodyear synthetic rubber plant. Goodyear will continue to supply raw materials to the hydrocarbon resins plant, which Sartomer plans to expand.

LG to boost Chinese ABS

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Credit: LG CHEM PHOTO
Credit: LG CHEM PHOTO

LG Chem is spending $75 million to expand its 330,000-metric-ton-per-year acrylonitrile-butadiene-styrene plant in Ningbo, China. When the expansion is completed in the second half of next year, the facility will have annual capacity for 480,000 metric tons. The venture, Ningbo LG Yongxing Chemical, is owned 75% by LG and 25% by local company Yongxing Chemicals.

Huntsman signs Saudi deal

Huntsman Corp. has signed a letter of intent with the Al-Zamil Group to build an ethyleneamines facility in Jubail Industrial City, Saudi Arabia. The plant, expected to be on-line in 2008, will have capacity to produce 66 million lb per year of ethyleneamines. The 50-50 joint venture will license Huntsman technology. Huntsman and Al-Zamil are partners in a maleic anhydride/butanediol facility, also in Saudi Arabia.

Dow and Nova suffer outages

Dow Chemical says a "significant" equipment failure at its Freeport, Texas, ethylene cracker on June 26 will sideline the facility for three to five weeks. Dow says a tornado that hit Alberta and took out ethane supplies in the Canadian province did not materially impact its plants there. Nova Chemicals, however, says weather-related outages have reduced ethane availability at its Joffre, Alberta, site, which is operating at 40% of capacity. Nova expects to be operating at full capacity in the third quarter but expects to lose up to 350 million lb of ethylene output and $50 million in pretax revenue.

DuPont snaps up Rhodia HFCs

DuPont will buy Rhodia's Isceon line of hydrofluorocarbon (HFC) refrigerants, which are used to replace ozone-depleting refrigerants in air-conditioning, cold storage, domestic refrigeration, and process cooling. For Rhodia, the sale marks a further step in the refocusing of Rhodia Organics. Rhodia will continue to produce and sell refrigerant R-22 from its plant in Avonmouth, England.

Genentech sets production plan

Genentech has revealed plans for more manufacturing capacity to meet demand for its biotechnology products. In addition to the purchase of Biogen Idec's Oceanside, Calif., plant (C&EN, June 27, page 12), Genentech will "significantly" increase its available capacity by paying Amgen and another, undisclosed, firm a combined $41 million to stop making products for them. The firm is also advancing contracts with Lonza, Novartis, and Wyeth to make Genentech drugs and is expanding its own plants in Porriño, Spain, and Vacaville, Calif.

Abbott, Brazil in AIDS dispute

Abbott Laboratories is facing an ultimatum from Brazil to lower its price for the AIDS drug Kaletra by close to 50%. Brazil's health minister, Humberto Costa, has declared Abbott's protease inhibitor a "public interest" subject to "obligatory licensing." If no agreement is reached, Brazil plans to break the patent and produce a cheaper generic version of the drug in its state-run Farmanguinhos Laboratory. Abbott says Brazil cannot legally issue a compulsory license and that the practice is not in the best interest of the drug discovery and development process. With global sales last year of $896 million, Kaletra is Abbott's third-best-selling drug.

Hexion builds Canadian plant

Newly formed Hexion Specialty Chemicals is building a plant in Sturgeon County, Alberta, to produce resin-coated sand proppants for the local oil and gas industry. The proppants, used in hydraulic fracturing, increase the yield and working life of oil wells. The plant will be completed early next year and have 150 million lb of annual capacity. The phenolic resins used to coat the sand will come from a nearby Hexion plant.

Merck in pact with Metabasis

Merck and Metabasis Therapeutics will develop small-molecule therapeutics for the treatment of diseases including type 2 diabetes, hyperlipidemia, and obesity. Metabasis, which has a technology for discovering compounds that activate a protein kinase in the liver known to regulate cholesterol and fat levels, could receive payments totaling $54 million to $74 million, plus royalties. Merck paid Metabasis $5 million and will help fund research.

Abgenix pares R&D operations

Abgenix will lay off about 15% of its workforce to focus on its development pipeline. The biopharmaceutical firm, which employed 523 workers at the end of last year, will end research at its headquarters in Fremont, Calif., and consolidate all research and preclinical activities at its facility in Burnaby, British Columbia. The firm's lead product, panitumumab, is a fully human monoclonal antibody developed with Amgen to treat cancer.

Cephalon links with Alkermes

Cephalon and Alkermes will codevelop Vivitrex, a drug in the Alkermes pipeline for treating alcohol dependence. Cephalon will make an initial payment of $160 million to Alkermes and an additional $110 million payment if Vivitrex is approved. Alkermes could receive up to $220 million more in milestone payments. Vivitrex is an injectable form of naltrexone that is under development as a once-a-month treatment using Alkermes' drug delivery technology. Naltrexone binds to opioid receptors in the brain, a process believed to reduce alcohol craving.

New drug fund buys Xenova

Celtic Pharma, a just-formed private equity investment fund, has agreed to acquire the U.K. biotechnology company Xenova for roughly $37 million. Xenova specializes in vaccines for nicotine and cocaine. Celtic Pharma seeks to assemble a portfolio of 12 to 18 late-stage drug development programs to fund and manage through clinical and regulatory approval. It has raised $125 million and expects to have $300 million at its disposal by year's end.

Drought hits Thai chemicals

Drought has resulted in a water shortage in northeast Thailand that may affect chemical companies at the Map Ta Phut industry park in Rayong province. PTT, Thailand's largest oil and petrochemical producer, said its business would continue to run smoothly after the park announced a 40% cut in water supplies. But Siam Cement, another major chemical producer, warned that it would cut operating rates at the site by about 40%. Deputy Prime Minister Somkid Jatusripitak ordered park officials to keep up the water supply and find another solution.

Venezuela sets chemical firm

Venezuela has launched Corporación Petroquímica de Venezuela (CPV), meant to replace Pequiven, the chemical arm of state oil company Petroleos de Venezuela (PDVSA), and to operate independently of PDVSA. The company also set a strategic plan for 2005­12 that calls for $10 billion in new petrochemical investments and annual sales at CPV of $12 billion, 10 times what they are today. As part of that program, CPV is studying a 400,000-metric-ton-per-year polypropylene joint venture with Braskem for Venezuela's El Tablazo petrochemical complex. Also part of the program is modernization of the El Tablazo and Morón sites, construction of a new site in Güiria, and streamlining of a site in Jose, where a new ethylene plant is planned.

Production stable in May

U.S. production of all chemicals increased slightly in May from the previous month, while output of basic chemicals fell a bit, according to the latest seasonally adjusted data from the Federal Reserve Board. The government's production index for all chemicals in May was 112.4 (1997 = 100), up just 0.1% from April, and just 1.9% ahead of the comparable month in 2003. The government estimates May capacity utilization for the industry at 76.6%, up from 76.5% in April and from 75.5% in May 2004.

BUSINESS ROUNDUP

Cabot Corp. and Shanghai Coking Chemical will invest close to $30 million in a specialty carbon black unit in China's Tianjin Economic & Technological Development Area. The partners already make standard carbon black there.

Octel has appointed Paul W. Jennings as president and CEO. Jennings, formerly chief financial officer, has been acting CEO since mid-April, when Dennis J. Kerrison resigned for violating the firm's code of ethics.

GlaxoSmithKline has started resupplying Paxil CR to U.S. pharmacies after fixing manufacturing problems. The firm withdrew the drug in February under pressure from FDA.

Dowpharma has licensed its Pfenex Pseudomonas-based expression technology to Iomai for the production of heat-labile enterotoxin, a key component of Iomai's transcutaneous immunization platform.

Tranzyme Pharma, a Canadian biopharmaceutical firm, has picked CiVentiChem to provide medicinal chemistry, custom compound synthesis, and process development services. CiVentiChem will serve Tranzyme from its Research Triangle Park, N.C., and Hyderabad, India, laboratories.

Crompton Corp. has completed the sale of its refined products division to private equity firm Sun Capital Partners. The maker of white oils, petrolatum, and microcrystalline waxes, now named Sonneborn, had sales of $265 million in 2004.

EMS-Chemie and Showa Denko will dissolve their Japanese specialty nylon venture. EMS will become the sole owner of the venture, which has annual sales of about $35 million.

 

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