DSM Invests In Medical Polymers

AS PART OF ITS SHIFT toward the specialty materials business, DSM will acquire Polymer Technology Group (PTG), a privately held maker of biomedical polymers.

The deal is expected to close in the second quarter of this year, subject to regulatory approval. DSM isn't disclosing the purchase price other than to say it is about 10 times PTG's annual earnings. PTG, based in Berkeley, Calif., expects 2008 sales to reach $40 million and anticipates 20% annual growth in the next three to five years.

DSM has identified biomedical materials as an important growth area and started supplying the market in earnest last year. With the addition of PTG's portfolio and product pipeline, the Dutch company is now aiming for more than $150 million in sales of medical biomaterials by 2012.

"We have highlighted the many opportunities we see in the cross-fertilization of our expertise in life sciences and materials sciences," DSM Chairman Feike Sijbesma says.

DSM is not alone in pursing the growing implant materials market. Solvay, FMC, and a number of smaller specialties firms are getting more involved in a business that many chemical companies avoided after Dow Corning declared bankruptcy in 1999 under the weight of liabilities from silicone breast implants (C&EN, Nov. 5, 2007, page 14).

Now, life is a little less harrowing for suppliers of implantable materials, thanks to the product liability protection offered by the 1998 Biomaterials Access Insurance Act.

Meanwhile, many uses for biomedical materials—in pacemakers, contact lenses, stents, orthopedic implants, catheters, and implantable sensors—are growing in developed countries with aging populations.

Medical plastics comprise a highly demanding but protected market and are a good fit for large specialties firms like DSM, according to John R. Jones, a plastics and chemicals consultant with Forrestal Consultants. "The business has to be set up for small quantities and very high standards," he says.

PTG has been supplying device makers with biomaterials since 1989 and has 100 employees. DSM says PTG cofounder Bob Ward will continue in his position as president after the acquisition.