October 2008



Thecommercialchemist

In this week’s Chemistry World business round-up, we cover the huge profits made by the oil firms that are like a ray of sunshine amidst the backdrop of more doom and gloom caused by the economic downturn

INDUSTRY

Record oil prices helps oil giants profits soar
ExxonMobil, Shell and BP have all recorded strong third quarter results, with ExxonMobil’s revenues reaching $137 billion (£85 billion) and net income soaring to $14.8 billion – reportedly one of the largest profits ever posted by a private American company.

BP’s revenues passed $71 billion, and its profits soared 148 per cent to over $10 billion, mainly due to the high price of crude oil. While critics have accusing the company of profiteering, city analysts have hailed the results saying they are due to operational improvements within the firm.

Nevertheless, according to the Financial Times, the company is now planning to cut more jobs than the 5,000 announced in 2007.

Meanwhile, Shell has announced that Peter Voser, currently the company’s chief financial officer and managing director, will succeed Jeroen van der Veer as the company’s CEO as of 1 July 2009.

The move surprised many industry commentators, as Mr Voser was said to have ruled himself out as a potential candidate and was looking to move into banking, possibly with a role at UBS. Investors have wholeheartedly approved the announcement as Mr Voser is seen to be the ‘safe pair of hands’ the company needs to steer it safely though the turbulent future facing oil companies.

However, all seems rosy for the oil giant at the moment, with revenues increasing 45 per cent to hit $131 billion and reported income up 22 per cent to $8.4 billion. The strong results from the energy side of the firm were barely scratched by the $79 million loss made by its chemicals arm.

Wacker Chemie banks on a sunny future

In spite of falling oil prices making investing in renewable energy currently less financially attractive, Wacker Chemie has announced plans to build a new €760 million (£597 million) plant in Germany to make the hyperpure polycrystalline silicon used to make solar energy cells.

The new plant will be expected to output around 10,000 metric tonnes per year and will create some 450 extra jobs. This latest announcement is just part of Wacker’s plans to increase its capacity to 35,500 metric tons per year by the end of 2011, to keep up with the double-digit annual growth in polysilicon demand the company is anticipating.

BASF to shed jobs as shopping spree continues
German chemical giant BASF has said it will cut 1000 jobs as it prepares for a ‘tough business environment’, with material costs rising and demand falling as recession looms. While its third quarter revenues grew by 13 per cent to €15.8 billion operating profits fell 8 per cent to €1.5 billion and net profits slumped a staggering 37.5 per cent to €0.75 billion.

Meanwhile, its purchase of Swiss speciality chemicals group Ciba looks to be on target according to Vontobel Bank, the independent bank responsible for managing the deal. Vontobel announced on Wednesday afternoon that BASF owned nearly 70 per cent of Ciba’s shares – over the two thirds of the shares which would make the takeover bid successful. A definitive tally of shares will be published on Monday when the company will announce whether the offer has been a success.

The company has also announced plans to buy Recticel’s polyurethane glass encapsulation business for an, as yet, undisclosed amount. The deal will see BASF gain the rights to Recticel’s patented aliphatic light stable Colofast compounds, currently used for coating car windows. BASF claims the coating could also be applied to solar cells to considerably increase production efficiency.

AkzoNobel weathers the economic storms
AkzoNobel has reported ‘resilient’ third quarter results, which the Dutch firm believes underlines its fundamental strengths. Reported revenues rose 3 per cent to €3.8 billion compared to the same period last year, although net income dropped 23 per cent due to ‘one off’ charges.

While reported revenues from the company’s decorative paint and performance coating divisions were said to be ‘stable’, the speciality chemicals division grew 9 per cent due to price increases.

According to the company, the integration of ICI is ahead of schedule, and due to the ‘deteriorating’ economic conditions it will aim to make the €340 million cost savings faster than originally planned.

Bayer optimistic despite fall in profits
Drug and chemical manufacturer Bayer has announced that its third quarter profits fell 76 per cent to €277 million due to higher energy and raw materials costs.

While its CropScience business grew 7.9 per cent to just over €1.2 billion, its MaterialScience arm recorded a revenue drop of 2.9 per cent to €2.5 billion, weighed down by raw material and energy costs. Sales from the company’s pharmaceuticals arm, Bayer HealthCare, rose 3.3 per cent to €3.8 billion, with the company citing strong sales growth from its YAZ oral contraceptives family.

Meanwhile, the US Food and Drug Administration (FDA) has slapped the company’s wrists for ‘illegal marketing of two unapproved drugs’ by issuing warning letters concerning two aspirin-containing over the counter products: Women’s low dose aspirin + calcium and Aspirin with Heart Advantage.

PHARMACEUTICALS

Chantix tops list of reported adverse events
According to a report by The Institute of Safe Medication Practices, Pfizer’s smoking cessation drug Chantix (varenicline) received the highest number of adverse event reports in the US during the first quarter of 2008. Second in the list was the anticoagulant heparin, followed by the analgesic fentanyl.

While the number of adverse event reports tend to provide an accurate profile for a drug’s safety, the individual reports do not prove that the drug caused the event described.

The researchers analysed every report submitted the FDA during the first three months of 2008 and found that the number of serious injuries increased 34 per cent to 20,745 – but the number of deaths more than doubled to reach 4,824.

However, the authors note that because the reporting of adverse events is voluntary, the real numbers could be far higher.

AstraZeneca’s profits soar despite marginal sales growth
AstraZeneca’s third quarter sales have risen 3 per cent (at constant exchange rates) to $7.7 billion, helped by an 18 per cent increase in sales to emerging markets, with sales to China rising 35 per cent. Meanwhile, pre-tax profits soared 22 per cent to hit $2.4 billion.

Notably, sales of its cholesterol lowering drug, Crestor (rosuvastatin), rose 28 per cent to hit $0.9 billion, becoming the only branded statin to gain market share in the US this year.

MS drug sales lift Elan
Elan has seen revenue for the third quarter rise 53 per cent to reach $270 million on the back of soaring sales of its multiple sclerosis (MS) and Crohn’s disease drug, Tysabri (natalizumab). The increase in sales of the drug helped the company reduce its pre-tax loss to $83.5 million.

However, a third patient this year has contracted a life threatening illness after taking Tysabri, fuelling speculation that the rate at which new patients are prescribed the drug could plummet.

Wyeth zooms in on six therapy areas
Despite seeing revenues rise by 4 per cent to $5.8 billion during the third quarter, US drugmaker Wyeth has said it will cut by around half the number of therapeutical areas it researches. The firm intends to focus its efforts on the potentially higher earning areas of oncology, inflammation, neuroscience, vaccines, metabolic diseases and muscular-skeletal disorders.

The company’s research and development budget will remain at about $3.2 billion a year, and while scientific staffing levels should remain the same, some scientists may lose their jobs if their skills cannot be transferred to the new areas.

Merck Serono licenses anti-cancer lipidomics antibody
Merck Serono has entered into a worldwide alliance to develop and commercialise LPath’s ASONEP monoclonal antibody that neutralises the S1P lipid that stimulates tumour cell migration.

LPath will receive up to $23 million in upfront payments and research and development funding to help the firm complete its Phase I trial programme, and could end up receiving a much as $422 million depending on the success of the drug.

LABORATORY

Invitrogen and Applied Biosystems all set for merger
Invitrogen’s share holders have approved its $6.7 billion merger with Applied Biosystems by an overwhelming 98 per cent majority. The merged company will generate annual turnover of around $3.5 billion and will enable the firms to compete better with industry behemoth Thermo Fisher Scientific, which had 2007 revenues of nearly $10bn.

‘We remain fully confident that when this transaction closes, our combined company will enable revolutionary innovation in the life sciences arena for the benefit of customers,’ said Gregory Lucier , CEO of Invitrogen.

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Austrian scientists have unravelled more secrets behind the dramatic colours of autumn leaves.

Bernhard Kräutler, Simone Moser and colleagues at the University of Innsbruck, have found that chlorophyll may contribute to the colours of autumn (or fall if you prefer) after all. Previously it was thought that all chlorophyll breakdown products were colourless, and that the beautiful autumnal colours came from carotenoids and flavonoids present in leaves already. The reds, orange and yellows of these compounds were assumed to be masked during spring and summer due to the predominant green of chlorophyll. It seems however that this was not the ‘fall’ story……

To learn more visit Sarah Corcoran’s Chemical Science article.

Read more exciting news articles on the Chemical Science homepage. And don’t forget to sign up for our e-alerts

Reference:
A yellow chlorophyll catabolite is a pigment of the fall colours
Simone Moser, Markus Ulrich, Thomas Müller and Bernhard Kräutler
Photochem. Photobiol. Sci., 2008, DOI: 10.1039/b813558d

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According the the New Scientist Blog, a US charity called Found Animals is putting up a $75 million award to fund research leading to a pet contraceptive. Their hope is to stimulate the development of a non-surgical one-stop sterilisation for man’s best friend (and cats).

There are some suprising contenders, including a team at Bengal University to have got good results by injecting calcium chloride into the testicles. Another reason for your dog to loathe the well-meaning vet. And an excuse for me to put a picture of my dog on the blog.

Archie

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Mathematician Marcus Du Sautoy has been named as the Simonyi professor for the public understanding of science. The role was previously held by the outspoken evolutionary biologist Richard Dawkins who managed to upset many religions with his documentary ‘The Root of all Evil?’

The position is arguably the highest profile academic post in the UK and was created to communicate science to the general public by legendary computer scientist Dr Simonyi. Dawkins used his time in the post to write several books on biology and re-ignite the debate over the (non)existence of God.

His successor, Du Sautoy, delivered the 2006 Royal Institution Christmas Lectures; only the third time that maths has been the subject of the lectures. He is currently presenting a four-part television series on BBC4 about the history of mathematics aiming to show how mathematics affects all aspects of our lives – and has done since the time of Ancient Egypt.

His research interests lie in understanding the world of symmetry using things called zeta functions – classical tools derived from number theory as well as other methods including model theory, algebraic geometry and analytic methods.

‘For me, science is about discovery but it is also about communication. A scientific discovery barely exists until it is communicated and brought to life in the minds of others,’said Du Sautoy.

‘A mathematically and scientifically literate society is essential given the huge role science now plays in our world.’

Hopefully, he’ll bring funding for science and maths alive too…

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Using the latest analytical techniques, scientists have for the first time measured levels of the potent greenhouse gas NF3 in the atmosphere – and found four times more of the gas than estimates had predicted.

In July, Chemistry World reported on the study that revealed NF3 as a particularly potent greenhouse gas. Only made in small amounts, the gas was never included within the Kyoto protocol – but the discovery that NF3 has a warming effect 17,000 times stronger than carbon dioxide, with a lifetime in the atmosphere of around 550 years, prompted calls for the gas to be monitored.

While still used in small amounts, NF3 production has grown over recent years, because it is used to manufacture flat screen plasma televisions. The industry claimed that the gas is efficiently recaptured after use – but the new data questions that claim.

Ray Weiss and colleagues at the Scripps Institute of Oceanography have overcome the technical challenges of measuring the gas at parts-per-trillion levels, revealing that there is around 5,400 tonnes of NF3 in the atmosphere in 2008 – far above the 1,200 tonne level estimated in 2006. Importantly, the study also revealed that levels of the gas in the atmosphere are increasing by 11 per cent per year.

‘This rise rate corresponds to about 620 metric tons of current NF3 emissions globally per year, or about 16% of the poorly-constrained global NF3 production estimate of 4,000 metric tons per year,’ the researchers say. ‘This is a significantly higher percentage than has been estimated by industry, and thus strengthens the case for inventorying NF3 production and for regulating its emissions.’

However, due to the comparatively low levels in which it is used, NF3 still only contributes 0.04 per cent of the warming effect contributed by human-related CO2 releases.

The research will be published in Geophysical Research Letters, DOI: 10.1029/2008GL035913

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Thecommercialchemist

In this week’s Chemistry World business news round-up, we cover a slew of financial results from the pharmaceutical and chemical industries.

Pharmaceuticals

Merck slashes 7200 more jobs:
As reported earlier this week on the Chemistry World website, Merck & Co. has announced disappointing third quarter results and plans to slash its workforce by over 10 per cent. Merck’s net income for the quarter plummeted to just over $1 billion, down nearly 30 per cent compared to the $1.5 billion reported in the third quarter of 2007.

Schering-Plough’s profits plumment:
Schering-Plough has also seen a sharp drop in third quarter profits as results were hurt by special charges and declining demand for its cholesterol drugs in the face of increased generic competition. However, boosted by sales of products acquired in its takeover of Organon, quarterly sales rose to $4.58 billion (£2.95 billion), an increase of 63 per cent compared to the previous year.

‘Despite a tough environment and challenges to the US cholesterol joint venture products, we delivered strong sales and earnings while investing in R&D and paying down debt,’ said Fred Hassan, Schering-Plough’s CEO.

pills-sos-350

Pfizer ‘s profits rise despite sales stagnantion:
Pfizer reported strong profit growth during the third quarter, despite revenues remaining just under $12 billion. The pharma giant’s profits nearly tripled to $2.3 billion, mostly due to charges depressing last year’s results.

In a recent interview, David Simmons, general manager of Pfizer’s new Established Products unit, told Dow Jones Newswires that the company was looking to further increase its revenue stream from the generics market by making generic versions of its competitors off-patent drugs as well as its own.

The pharma giant is also planning to accelerate its drug discovery process by setting up a joint venture, Cyclofluidic, with biopharma firm UCB to develop technologies that automate the synthesis and testing of drug molecules by integrating flow chemistry and flow biology processes.

Actavis rebuffs sell-off claims:
Icelandic generic drug maker, Actavis, has rebuffed claims that the company would be sold off quickly by its billionaire owner whose investment vehicles went into administration due to the collapse of Icelandic bank Landbanski.

Chemical Industry

Sasol invests in a brighter South African future:
Sasol has continued its investment in South African Universities by injecting a further ZAR25 million (£1.4 million) into projects aimed at upgrading research facilities and equipment at a number of South African Universities. The investment is part of a 10 year, ZAR250 million, initiative to ensure world class teachning of chemistry and engineering.

‘Sasol has established a number of academic centers of excellence and advisory boards, enabling us and students to work with global experts in a variety of science and engineering fields. The significance of their science and engineering experts teaching on rotation levels at collaborating universities is immeasurable,’ said Theuns Eloff, vice-chancellor of North-West University.

Dow AgroSciences continues to recruit:
Despite the uncertainty surrounding the world’s economic markets, suppliers of agrochemicals still seem to be doing well, with Dow AgroSciences announcing that it has added 350 jobs over the last year and will ‘continue to recruit widely’ during 2009.

field-sun-350

DSM to develop second generation biofuels:
DSM and the US Department of Energy have entered into a ‘multimillion dollar’ cooperative agreement to develop ‘second generation’ biofuels form non-food feedstocks.

Syngenta’s sales soar:
Syngenta recorded third quarter sales of $2.3 billion, up 33 per cent compared to the same period during the previous year. Notably, sales of chemicals for crop protection increased 26 per cent with Mike Mack, Syngenta’s CEO, stating: ‘ The sales figures we have presented today attest to the strength of our business in a turbulent global environment. The fundamental drivers for agriculture remain unchanged, with rising food and feed demand inevitably requiring increased use of agricultural technology in a context of limited land availability.’

Air Liquide’s revenues rise:
Industrial and medical gas supplier, Air Liquide, saw third quarter revenues grow by over 10 per cent to reach €3.2 billion (£2.6 billion). Benoit Potier, Air Liquide’s CEO, remained confident in the company’s ability to maintain double digit growth despite the financial crisis.

DuPont sees sales increase:
DuPont has seen third quarter sales increase 9 per cent to $7.3 billion, despite the slowing economy and hurricane-related charges. Agriculture and Nutrition sales grew 22 per cent and reflected strong demand from southern hemisphere customers.

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I’ve managed to persuade the rest of the Chemistry World team to let me write an article about whisky, the research for which included a wonderful visit to the Scotch Whisky Research Institute and the International Centre for Brewing and Distilling – both in Edinburgh.

ICBD logo

So yesterday I spent the day with a group of fascinating researchers, and was even offered a sample of university student-brewed beer. (Although, sadly – and very sensibly – there was no whisky-tasting offered.

For a couple of years, when I lived in Edinburgh, I worked in a pub, and I’ve experienced the wrath of whisky-drinking regulars when the water jug on the bar was not brought up to room temperature in time for their arrival. So I was looking forward to the chemical explanation – exactly how and why should one dilute a malt whisky in such a specific way?

The usual explanation given is that dilution releases aromas. And that’s true. With many malts, important flavour compounds, long-chain esters for example, become less soluble as the ethanol concentration decreases. So they come out of solution to give heady, whisky aromas.

But nothing with Scotch whisky is so straightforward. There is no ‘magic’ dilution level. Some ‘heavier’ or ‘meatier’ single malts, for example, contain relatively high levels of sulfur compounds – unpleasant aromas that most people would prefer to keep locked up inside the liquid – rather than releasing them.

But, on the other hand, some whisky drinkers like and appreciate these sulfurous smells. So it seems there’s no right answer – which, although frustrating – at least gives you a good response for anyone who tells you how you should drink whisky.

And dilution from 40% alcohol in a bottle of whisky down to 20% for nosing, drinking an enjoying, also has a lot to do with practicality. The nosers – whisky smelling experts with highly sensitive, and often highly insured, olfactory equipment – would simply numb their most precious sense after a nosing a few 40% whiskies.

Look out for the December feature for more –including why blended whiskies are not inferior to single malts. I think I hear the cries of ‘heresy’ already.

The experimental stills at ICBD:

Experimental stills at the ICBD

Whisky visibly maturing:

Maturing whisky

Tasting student-brewed beer in the lab:

Tasting student-brewed beer

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Right, well I’d like to take this opportunity to introduce myself and say hello to all the Chemistry World readers out there. My name is Matt Wilkinson and as the new Business Editor of CW, the RSC has entrusted me to provide you with the latest chemical industry news.

Hopefully, I’ll be able to provide you with unique insights into the current industry trends and highlight potential future issues that will affect both the industry and its academic partners.

I studied for my degree and PhD at Bristol University before holding several postdoctoral positions. After being involved with the successful campaign to save Sussex University’s Chemistry department I decided I wanted to try to communicate science to a wider audience and became a science writer / journalist.

After several science writing and journalism jobs I realised I really enjoyed the macchinations of industry in particular technology driven mergers and acquisitions as well as the reasons behind why only some technologies become commercial sucesses.

I hope you’ll enjoy CW’s future business stories.

Matt

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Thecommercialchemist

In this week’s Chemistry World business news round-up, we cover calls for longer Reach preregistration, and the disappearing stent.

Chemical Industry

Flow chemistry collaboration:
Dutch flow chemistry firms Micronit, FutureChemistry and Flowid are to collaborate to develop industrial-scale microreactor systems for the fine chemical and pharmaceutical industries. The project, called Access2Flow, will offer flow systems based on glass microreactors, which will allow industry to carry out in continuous flow reactions previously limited to small batches.

Dow raw materials deal:
Dow Chemical has signed a multi-year, $400 million deal to receive raw materials from Shanghai Tian Yuan Huasheng Chemical Company. The CHinese firm will supply to new epoxy plans Dow is currently planning in Shanghai, due for completion in 2010 and 2011.

Calls for Reach extension:
The UK Chemical Business Association (CBA) has called for the European Commission to extend the Reach preregistration period by six weeks, following frustrations over the unreliability of the Reach IT system, through which preregistrations are lodged. The Reach IT process for bulk pre-registrations was six weeks late in becoming available, cutting the six month pre-registration period available to industry, and ongoing problems continue to ‘time out’ registrants, says CBA.

MENA market:
Belgium-based Solvay has reached a final agreement to buy Egypt’s Alexandra Sodium Carbonate company for €100 million. Solvay says the acquisition improves its access to the fast growing markets of the Middle East and North Africa (MENA).

Pharmaceuticals

Team stent:
Eight stent makers and drug companies – including Johnson & Johnson, and Sanofi aventis – are collaborating over a large clinical trial to assess how long patients given drug-eluting stents to prop open diseased arteries should be given anti-clotting drugs. Potentially fatal blood clots can form well after a year after implantation, and there is currently no clear data to indicate how long after treatment patients should continue on anti-clotting drugs.
Meanwhile, Abbott could potentially have got around the clotting problem by developing a stent that slowly dissolves after implantation. Abbott say a small clinical trial gave ‘very exciting’ results.

dissolvingstent

Vioxx heart risk confirmed:
A long-term study following up the safety concerns of Vioxx has confirmed that the painkiller – withdrawn by Merck in 2004 – does substantially increase the risk of stroke, heart attack and death. However, the study also shows that the risk seems to disappear within a year of stopping the medication.

Control trials criticised:
Sir Michael Rawlins, chairman of the UK’s National Institute of Health and Clinical Excellence (Nice), which approves drugs for use on the National Health Service (NHS), has criticised the over-emphasis on randomised controlled drug trials as a way to assess the effectiveness of new medicines. Rawlins argues that better use should be made of historical control trials, which compare new treatments with those used previously, which could speed the arrival of innovative drugs onto the market.

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US scientists have whipped up a new centrifuge using a common kitchen utensil. The egg beater, modified by George Whitesides and colleagues at Harvard University, Cambridge, can separate plasma from blood, enabling point-of-care disease detection in developing countries.

The work, highlighted in Chemical Technology, forms part of Lab on a Chip’s Microfluidics and Point-of-Care Testing theme issue, due for publication in December. The issue, guest edited by Samuel Sia (Columbia University) and Larry Kricka (University of Pennsylvania) will capture some of the latest areas of interest and technological approaches from leading researchers towards point-of-care microfluidic-based diagnostics.

Reference:
Egg beater as centrifuge: isolating human blood plasma from whole blood in resource-poor settings
Amy P. Wong, Malancha Gupta, Sergey S. Shevkoplyas and George M. Whitesides, Lab Chip, 2008, DOI: 10.1039/b809830c

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