Business Concentrates

ChiRex founders launch pharmaceutical services firm

Global Pharmaceutical Development (GPD), a drug development services start-up company formed by former executives of ChiRex, has received a $150 million capital investment from private equity firm Welsh, Carson, Anderson & Stowe. The new company plans to offer discovery support, preclinical and clinical services, drug substance and drug product development, and consulting for emerging pharmaceutical and biotech companies as well as for established drug firms, according to CEO Michael A. Griffith. "We are focused on what has become a big backlog of proof-of-concept clinical trials--the early-stage trials designed to appeal to both the clinicians and the money people," he says. Griffith, who estimates that about 1,500 emerging drug companies register over 80% of new pharmaceutical entities, spending more than $18 billion per year doing so, sees GPD as a comprehensive services firm with annual sales of $1 billion by 2010. He says he hopes to build through acquisition what he had envisioned for ChiRex, which was a product development and contract manufacturing firm when it was purchased by Rhodia in 2000 for $545 million. "Our design is to be a fee-for-services service provider with a toolbox that covers the waterfront," he says.

Crompton sees suits settled

Crompton expects to settle direct-purchaser class-action lawsuits in rubber chemicals, ethylene-propylene rubber, and nitrile rubber for a total of $97 million. The suits followed a government investigation into the fixing of prices for the three products. "We believe this settlement represents a good resolution of a very difficult issue," CEO Robert L. Wood says, because it allows the firm to reduce risks of prolonged litigation and potential treble damages. Kenneth R. Feinberg, former special master of the September 11 Victim Compensation Fund of 2001, has agreed to act as mediator of the settlement.

Industry has strong start

The global chemical industry is set to grow faster than gross domestic product this year, accompanied by high capacity utilization. That's the prognosis of BASF Chief Financial Officer Kurt W. Bock, who spoke last week at an investors' conference in New York City. And at a meeting in London, John Feldmann, who heads BASF's polymers and oil and gas operations, concurred: The outlook for the industry is good coming off a strong 2004, when, for the first time in 15 years, all regions showed growth--Asia, Latin America, the U.S., and Europe. And it was the first time in the past few years, Feldman added, when manufacturing--including chemical production--outpaced growth in world GDP.

Sanders named SCI medalist

Daniel S. Sanders, former president of ExxonMobil Chemical, will receive the Chemical Industry Medal of the Society of Chemical Industry (SCI), American Section. Sanders, who is also a past chairman of the American Chemistry Council, will accept the medal at a dinner on March 9 at the Plaza Hotel in New York City. SCI awards the medal annually to an industry titan who has made outstanding contributions to the quality of life. Last year's recipient was Thomas E. Reilly Jr., retired chairman of Reilly Industries and current head of ACC.

Wacker to buy protein maker

Wacker-Chemie will acquire the German biotech company ProThera and rename it Wacker Biotech. Created in 1999 by the Hans-Knöll Institute for Natural Products Research, ProThera concentrates on developing efficient processes for making microbially derived biologics. Gerhard Schmid, president of Wacker Fine Chemicals, says the purchase expands his firm's existing custom drug manufacturing activities by adding pharmaceutical protein production.

Drugmakers promise more information

Responding to criticism from lawmakers and medical journals, four trade associations representing drugmakers in the U.S., Europe, and Japan say their members have agreed to volunteer more data than they currently do about ongoing clinical trials. Pharmaceutical Research & Manufacturers of America (PhRMA) says its members have agreed to post information on all new clinical trials beginning on July 1 and to add information on all ongoing trials by September. Under current U.S. law, firms are required to provide information to the government website http://www.clinicaltrials.gov only on trials involving serious diseases. "We are doing this because our industry recognizes that sometimes what the law requires doesn't give patients all they need," PhRMA CEO W. J. (Billy) Tauzin says. Some drug companies, including Eli Lilly and GlaxoSmithKline, have already committed to post trial information on the Internet.

DSM to expand armor fiber

Because of strong U.S. military demand for bullet-resistant fabrics and fiber-reinforced armor, DSM plans to expand its high-density polyethylene fiber facility in Greenville, N.C. The expansion of the unit, which opened just last May, will increase DSM's global fiber and bullet-resistant sheet capacity by 20% and 25%, respectively, when it goes on-line in 2006. The firm also produces the superstrong fiber in the Netherlands and in a joint venture with Toyobo in Japan. Last June, competitors Honeywell and DuPont said they, too, plan to expand bulletproof fiber output.

Alcon strikes research deals

Alcon Research, a leading ophthalmic company, has formed research alliances with Albany Molecular Research and Morphochem. Albany will screen samples from its natural product collections to identify compounds that are active against ophthalmic-related biological targets. It will also provide custom chemical synthesis services. Morphochem will work with Alcon to develop small-molecule drugs against ophthalmic targets. Albany and Morphochem both say they can receive research payments, milestones, and royalties on sales from Alcon.

Chemical jobs rise a little

U.S. chemical employment increased in December from the previous month, but only by 100 jobs, to 890,400, according to the latest seasonally adjusted data from the Labor Department. The figure was down 5,500 from year-end 2003. The number of hourly production workers showed a solid increase, rising by 2,000 to 525,800. This was 4,200 ahead of December 2003. Average weekly production hours fell slightly, however, to 42.2 from 42.3 in November and from 42.5 in the previous December.

Isis pares its workforce

Isis Pharmaceuticals will be cutting approximately 40% of its workforce as part of a "strategic reorganization" to advance its drug development pipeline. The company, which employed 457 people as of March 2004, develops new chemistries and novel formulations for antisense drugs. CEO Stanley T. Crooke says Isis' upcoming "central tasks" are the development of the alicaforsen enema for the treatment of ulcerative colitis and the advancement of second-generation antisense drugs to address high cholesterol and diabetes.

Dow invests in Midland

Dow Chemical will invest more than $100 million at its headquarters site in Midland, Mich. The two-phase project will begin in 2005 with demolition of outdated structures, renovation of existing buildings, and addition of equipment to make adhesives and sealants for the automotive industry. This first phase will open in 2007. The second phase, to open in 2009, will add a plant making automotive filters. Together, the projects will add about 110 jobs.

Sanofi re-ups with Regeneron

Sanofi-Aventis is reaffirming a collaboration with Regeneron Pharmaceuticals to develop the VEGF Trap for cancer treatment. The vascular endothelial growth factor trap is geared to stop tumor growth by blocking off blood supply to growing tumors. Sanofi-Aventis is making a one-time payment of $25 million to Regeneron, 50% of which is repayable upon commercialization of the VEGF Trap. Regeneron has also earned an additional $25 million clinical development milestone.

Venture firm to raise funds

Biofusion, established in 2002 to commercialize university-generated intellectual property, will list its shares on the Alternative Investment Market (AIM) of the London Stock Exchange. The business intends to raise close to $20 million with the listing on AIM, which is designed for small to medium-sized companies. The funds will be used to develop Biofusion's current portfolio companies, as well as to establish new companies based on intellectual property developed at the U.K.'s University of Sheffield.

U.K. nanoscience work is funded

Cascade Fund, which provides early-stage funding to science developments at five universities in southeastern England, has given seed funding to a researcher in nanomaterials. The funding to S. C. Edman Tsang, professor of nanomaterials and catalysis at the University of Reading, will support commercialization of a method of producing magnetically separable nanoparticle catalysts. Tsang says the catalysts have potential applications in biotechnology, as well as in biomedical, chemical, and engineering sciences.

BUSINESS ROUNDUP

• Invitrogen will acquire antibody maker Zymed Laboratories for $60 million in cash. Zymed makes pathology products, cancer and cell biology reagents and biomarkers, and general immunochemical reagents for life sciences research and clinical diagnostics.

• U.K.-based Antisoma is buying U.S. oncology drug development company Aptamera for approximately $21.4 million. With the addition of Aptamera's aptamer drug AGRO100, originally developed at the University of Louisville, in Kentucky, Antisoma now has four drugs in clinical development.

• Cambrex will provide process development and current Good Manufacturing Practice services for DOR BioPharma's ricin vaccine, RiVax. DOR recently received a $5.2 million NIH grant for development of the vaccine.

• Elbion has raised $44 million in a first round of venture-capital funding co-led by Burrill & Co. and units of 3i Group and Deutsche Venture Capital. Elbion was founded in 2002 as a management buyout from Degussa's Asta Medica unit.

• BP has completed its acquisition of Solvay's 50% interest in BP Solvay Polyethylene Europe and Solvay's 51% stake in BP Solvay Polyethylene North America. BP will contribute the operations to the stand-alone olefins and derivatives company it intends to form this year.

• GE Global Research is extending, for up to three years, its licensing agreement with Symyx Technologies. GE will continue to use Symyx' combinatorial research methodologies and will deploy Symyx' Renaissance experimental information software.

• Kemira's Tikkurila unit will distribute Rohm and Haas's powder coatings in Finland, Sweden, Norway, and the former Soviet Union. The deal is expected to enhance Tikkurila's technical expertise and give Rohm and Haas access to Tikkurila's network in the regions.

• Nova Chemicals and CanWest Petroleum will jointly study the feasibility of deriving petrochemical feedstocks from the Pasquia Hills oil shale project in Saskatchewan. Nova will have rights to all future feedstocks.