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Business

Business Concentrates

July 18, 2005 | A version of this story appeared in Volume 83, Issue 29

American Pacific to acquire Aerojet Fine Chemicals for $119 million

American Pacific Corp. (Ampac) has agreed to acquire Aerojet Fine Chemicals (AFC) for $119 million. GenCorp, Aerojet's parent company, announced its intent to sell the unit last year as part of a program to focus on its core business of aerospace and defense technology. The announcement ends months of speculation as to what company would purchase AFC, which specializes in contract manufacturing of high-containment, hazardous, and energetic materials and had sales of $66 million in 2004. Among the firms said to have investigated acquiring AFC is BASF, the German conglomerate that recently purchased Orgamol, a Swiss fine chemicals firm. "AFC is a perfect fit for our company," says John R. Gibson, CEO of Ampac. "It is an attractive, profitable business that complements our existing specialty chemical and energetic product portfolio." Ampac's current product line includes energetic chemicals such as sodium azide for space flight, defense systems, and airbags; fire-extinguishing agents; and water treatment equipment. With the acquisition of AFC, Ampac takes a stake in an extremely competitive market, which in recent years has faced a significant scale-back in contract work from major pharmaceutical companies. However, according to fine chemicals market analyst Peter Pollak, Aerojet's niche expertise in azide chemistry and simulated-moving-bed technology position the firm well for growth. Aerojet's profitability is attributed to a restructuring program implemented by CEO Joseph Carleone in 2000.

 

Transkaryotic board defends Shire deal

Transkaryotic Therapies (TKT) issued an open letter to shareholders last week urging them to approve the $1.6 billion sale of the company to Shire Pharmaceuticals, a deal announced last April. The letter comes in response to protests from two shareholders, Porter Orlin and Millenco, claiming that the deal is ill-timed and undervalues TKT, a biotech firm that focuses on therapies for rare diseases. In the letter, TKT's board claims that it rejected Shire's first two offers as inadequate before agreeing on one that "fully values" the business. The board also argues that the timing is ideal, given the company's need to secure a commercial partnership for Dynepo, a gene therapy for kidney disease currently in clinical trials. Shareholders will vote on the proposed acquisition on July 27.

 

Chatterjee pulls out of Basell bid

The Chatterjee Group has dropped out of a consortium to buy the Basell polyolefins joint venture between BASF and Shell Chemicals. According to published reports, the government of West Bengal, India, is holding up the deal because it is refusing to allow Chatterjee to put up Haldia Petrochemical--a firm controlled by Chatterjee, but also with the government as a shareholder--as collateral. Access Industries, however, is moving forward with the $5.7 billion deal, organized by its affiliate Nell Acquisition and consisting of 80% debt and 20% equity. "All funds and firm financial commitments are in place for a late-July or early-August close," says an Access spokesman.

 

Employment rises in June

U.S. chemical employment rose in June from May, according to seasonally adjusted data from the Labor Department, but total employment remained well below where it was a year earlier. The government data show total chemical employment in June at 878,300, up 700 from the previous month. An annual comparison shows total chemical employment in June still down 10,500 from where it was in the same month last year. The number of production workers also picked up last month, rising by 1,500 to 515,700. Again, this was below the 520,100 seen in June 2004. While the number of production workers was rising, the average weekly hours they worked fell slightly to 42.1 from 42.2 in May.

FIS expands custom capacity

FIS has completed construction and passed FDA inspection on three kilo labs at its headquarters in Vicenza, Italy, according to Roger Laforce, marketing manager. The project added kilo-scale capacity for cytotoxics, steroids, and highly potent active ingredients at a cost of about $2.4 million. The company is in the process of converting part of its intermediates production facility in Permoli, Italy, to current Good Manufacturing Practice production, a $6 million project, Laforce says.

 

Solvay proceeds with drug buy

Following up on a deal tentatively announced in March, Solvay has agreed to acquire Fournier Pharma for roughly $1.56 billion in cash. Fournier is a global leader in fenofibrate, a successful cardio-metabolic product for treating elevated levels of blood lipids. Solvay has said the deal will boost its drug sales by one-third, raise its operating profits by 58%, and make the cardio-metabolic area its largest business sector. Fournier's other activities include gynecology, gastroenterology, and psychiatry, all of which match Solvay's own therapeutic areas.

 

More emulsion powders at ICI

ICI has agreed to acquire the emulsion powders business of Celanese for $25.5 million. The Frankfurt, Germany-based emulsions business had sales of about $38 million and operating profit of $2.3 million in 2004, with about 50 employees. The acquisition will strengthen the Elotex business unit of ICI's National Starch & Chemical division. Elotex provides polymeric additives used to enhance the properties of building materials.

 

Lanxess refines strategy for fine chemicals

Lanxess aims to make its loss-making fine chemicals division a legally independent unit by the end of first-quarter 2006 at the latest, Chairman Axel Heitmann told Euro am Sonntag magazine. Heitmann also said Lanxess wants to restructure its loss-making La Wantzenau, France, site, which produces nitrile rubbers. Separately, the company is strengthening its leather-chemicals business, with formation of a strategic alliance in fatliquors with Newark, N.J.-based Atlas Refinery.

 

GRAND OPENING
[+]Enlarge
Credit: DOW CORNING PHOTO
CEO Stephanie A. Burns (center) opens an application center expansion in Shanghai.
Credit: DOW CORNING PHOTO
CEO Stephanie A. Burns (center) opens an application center expansion in Shanghai.

Dow Corning grows in China

Dow Corning has opened an applications center in the Songjian Industrial Zone of Shanghai, doubling the size of its existing facilities. The 2,500- m2 addition, adjacent to the existing center, adds laboratories and equipment to boost product development and analytical testing.

Schering-Plough and ViroLogic agree

Schering-Plough will pay ViroLogic $4.8 million for multiyear use of patient-testing technology. As Schering-Plough brings its AIDS drug candidate vicriviroc to late-stage clinical trials this year, ViroLogic's assays will help determine the likelihood of the drug candidate's success by seeing what degree of resistance HIV develops to the drug. FDA has recommended that biotechnology companies build these types of tests into their drug development process.

 

Toray expands materials for plasma displays

Toray Industries will more than double capacity to 2,160 metric tons per year at a plant in Shiga, Japan, that makes photosensitive paste for plasma display panels. The plant will provide these critical materials to the world's largest plasma display plant, being build in Ibaraki, Japan, by a 75-25 joint venture of Matsushita and Toray. Toray says the panel plant, with a capacity of 3 million units per year, will come on-line this September. Toray says its photosensitive paste simplifies the plasma panel manufacturing process.

 

DSM dissolves joint ventures

DSM has bought out the 40% stake held by Société générale de financement du Québec (SGF), in the two firms' joint venture, DSM Biologics Holding, for an undisclosed sum. DSM now is sole owner of the venture, formed 10 years ago to produce biological pharmaceuticals. R&D and manufacturing sites are in Montreal and in Groningen, the Netherlands. Separately, DSM has completed its exit from the bakery ingredients business with the sale of its 50% stake in South African yeast products maker Rymco to partner Daniel Mills & Sons. The sale price is just under $47 million.

 

Diversa hits DuPont targets

Diversa Corp. has delivered enzymes for the integrated corn-based biorefinery consortium partly funded by the Department of Energy and led by DuPont. Diversa will receive milestone payments of more than $500,000 for meeting and exceeding performance targets. The consortium got under way in 2003 and also includes Deere & Co., the National Renewable Energy Laboratory (NREL), and Michigan State University. It is geared to demonstrate the practicality of converting corn and other biomass feedstocks into sugars for use in the production of fuels and chemicals.

 

Abbott, Brazil settle dispute

Abbott Laboratories has reached an agreement with the government of Brazil, settling their dispute concerning the protease inhibitor Kaletra (C&EN, July 4, page 11). The pact specifies that the price of the drug will be dependent on the number of patients treated, but will not be at the low price quoted for local and generic manufacturers. Abbott agreed to provide assistance to Brazil to enable local manufacturing of Kaletra for HIV/AIDS patients once the patent expires in 2015.

BUSINESS ROUNDUP

  • The European Commission has cleared Celanese's acquisition of Acetex, following an in-depth inquiry into the proposed merger. Competitors would exert sufficient competitive pressure on the parties to prevent abuse of market position, the commission concluded.

  • Bayer and Shell have entered a license agreement that allows Shell to use Bayer's Double Metal Cyanide (DMC) technology to produce polyether polyols. Bayer's patents cover the process that uses DMC catalysis for polyoxyalkylation.

  • Cognis has opened a $24 million facility in Illertissen, Germany, to produce plant sterols and conjugated linoleic acids. Separately, Cognis and Golden Hope Plantations Berhad say they plan to expand their Malaysian oleochemical joint venture, which opened in 1989.

  • ChemDiv, a contract drug discovery firm, is part of a team to receive a $9 million three-year grant from NIH to develop the New Mexico Molecular Library Screening Center. 

  • Honeywell will invest $5 million over five years to advance research into the next generation of semiconductor materials at Albany NanoTech, part of the State University of New York, Albany.

  • India's Nicholas Piramal has entered an agreement under which it will market BioSyntech's products in Asian markets. The companies have also agreed to explore drug discovery opportunities using BioSyntech's technology platform. Nicholas Piramal will buy 7.5 million shares of BioSyntech stock.

  • VioQuest Pharmaceuticals has agreed to acquire Greenwich Therapeutics, which owns the exclusive rights to two anticancer agents, sodium stibogluconate and triciribine, for an undisclosed sum.

 

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