January 2009



In a week dominated by the fallout from Pfizer’s $68 billion purchase of Wyeth, Chemistry World ‘s business round-up covers yet more attempts of consolidation in the pharmaceutical sector, Rohm & Haas suing Dow for scrapping their merger agreement, and yet another slew of job cuts.

PHARMACEUTICAL

Roche gets hostile in war for Genentech

Swiss pharmaceutical giant Roche has finally lost its patience with Genentech’s board of directors, after they refused to accept a $43.7 billion (£30.3 billion) bid for the 44 per cent of the company Roche doesn’t already own. Roche has now gone direct to Genentech’s shareholders, with a reduced bid of $42 billion.

Roche is keen to gain full control of Genentech’s blockbuster cancer drugs Avastin and Herceptin, as well as absorbing the biotech’s new drugs and candidates into its pipeline. Genentech announced its full year results earlier this month, posting net income of $3 billion from operating revenues of $13 billion.

The pharma firm took a similarly hostile stance during its quest to takeover diagnostics expert Ventana in 2007. After being repeatedly rebuffed, Roche took its $3 billion offer straight to the shareholders and engaged in a combative war of words with the company’s board until it finally got its hands on its target.

takeover-320

Astellas bids for CV Therapeutics

Japanese drug-maker Astellas Pharma has made a $1 billion hostile takeover bid for its American partner, CV Therapeutics, after a ‘friendly’ takeover approach was given the cold shoulder in November 2008.

More cuts at AZ despite ‘robust’ results

UK pharmaceuticals firm AstraZeneca has announced plans to slash a further 6,000 jobs as it looks to reign in costs by another $1 billion. The extended cost cutting plans mean that job losses at the company will amount to 15,000 in the run up to 2013, while total savings should amount to $2.5 billion.

The cost cutting programme has already seen the company increase its profit margins throughout 2008. While sales only rose 3 per cent to $31.6 billion, operating profit rose 9 per cent to $10.9 billion. Much of the sales growth came from emerging markets like China, where sales rose 31 per cent.

Pharma remains profitable

The pharmaceutical industry has manged to remain largely unaffected by the global recession, with most companies posting positive results.

Abbott saw its fourth quarter sales rise 10 per cent of $7.95 billion, and fourth quarter operating profits rise 14 per cent to $1.7 billion, helped largely by strong sales of its rheumatoid arthritis drug Humira (adalimumab). For the year Abbott recorded operating profits of $5.7 billion from sales of almost $30 billion.

Swiss healthcare company Novartis saw a 87 per cent increase in fourth quarter operating profits, which reached $1.87 billion. For the full year, the company’s operating income rose 32 per cent to $8.9 billion, aided by recently launched pharmaceutical products which added $2.9 billion in sales throughout the year.

Aided by the sale of its share of ImClone to Eli Lilly , Bristol-Myers Squibb managed to turn around its prior-year net loss of $89 million for the fourth quarter to record a net income of $1.24 billion. Strong sales of its blood-thinning drug Plavix and antipsychotic drug Abilify helped sales increase 4 per cent to $5.2 billion for the quarter. Operating profits for the year were up 80 per cent, reaching $5.2 billion on sales of $20.597 billion.

Meanwhile Eli Lilly has recorded heavy fourth quarter operating losses of $3.2 billion after being hit by charges connected with its acquisition of ImClone. Despite having eight products breaking the $1 billion sales mark, the company’s revenues remained essentially flat at just over the $5 billion mark for the quarter. For the full year the company recorded an operating loss of $1.2 billion on sales of $20.3 billion.

AGROCHEMICALS

Chemical giant BASF has joined forces with the agricultural company Monsanto to advance the development of the next generation of dicamba-based weed control products for use with herbicide-resistant crops. Full details of the joint licensing agreement for these pesticides, aimed at herbicide resistant crops, have not been disclosed.

INDUSTRY

Dow in the dock after missing Rohm & Haas deadline

US chemical giant Dow is being sued after publicly stating that it will intentionally breach the deadline to close its acquisition of Rohm & Haas even though it has received all the regulatory approvals and has access to the funds to buy the company.

Andrew Liveris, Dow’s CEO, said the deal was ‘untenable at this time’ due to ‘unacceptable uncertainties on the funding and economics of the combined enterprise’. Dow’s problems started with the sudden onset of the recession, which was then followed by the Kuwait Petroleum Company’s last minute decision to pull out of the K-Dow joint-venture deal. That deal would have given Dow access to $9 billion of the $15.3 billion it needs to close the purchase of Rohm & Haas.

More job losses as recession becomes official

With the sobering news that the UK (along with many other countries) is now officially in a recession, there has been yet more bad news for the chemical industry and its workers.

Huntsman has decided to slash its workforce by 9 per cent, making some 1175 employees redundant. A further 490 contractor positions will also be shed and the firm has also announced plans to close its titanium dioxide plant in Grimsby, UK.

‘The steps announced today should take approximately $340 million out of our cost structure in 2009. These savings, combined with the $1 billion in payments we received during December from Apollo Management [in compensation Hexion’s aborted takeover of the company] provide our company with a strong balance sheet and significant liquidity,’ said Peter Huntsman, the company’s CEO.

Meanwhile, Pittsbugh Plate Glass (PPG) is considering cutting up to 4,500 jobs in the US and Europe after its fourth quarter net income dropped by 65 per cent. The cuts represent just over 11 per cent of PPG’s global workforce and are the result of waning demand from the automotive industry.

Similarly, falling demand for flat screen TVs and fibre-optics has shattered prospects for Corning, with a drop in fourth quarter net profits of 70 per cent the backdrop to slashing 3,500 jobs – around 14 per cent of the company’s workforce.

Swiss textile-chemicals supplier Clariant AG has also taken the decision to trim its workforce, and is slashing 1,000 jobs (5 per cent of its total). The cuts will come mainly from the firm’s sales and administration staff, with technical staff being asked to work reduced overtime, take compulsory holidays and work shorter days until the recession abates.

Ineos on track to meet bank covenants

Ineos, the world’s third largest chemical company, has said it is on track to meet the debt to earnings ratio covenants on the loans that it renegotiated in December 2008 after the slump in demand for petrochemicals. The company finished 2008 owing the banks €7.5 billion (£6.7 billion).

Petrochemical slump hits profits

The global slump in demand caused US chemicals giant DuPont to record a fourth quarter pre-tax loss of $961 million on sales of $5.8 billion. Despite sales for the fourth quarter being markedly down compared with the $6.9 billion recorded during the same quarter in 2007, full year sales increased slightly to $30.5 billion, up from $29.3 billion.

Meanwhile, Nova Chemical recorded operating losses of $318 million on sales of $1.1 billion, although spending cuts increased the company’s cash reserves to $573 million.

The sharp drop in demand for petrochemicals has hit Saudi Arabian Basic Industries Corporation, Sabic, particularly hard, with the firm’s fourth quarter operating profits crashing by 86 per cent compared to 2007. Steady performance earlier in the year meant that the full year operating profits were only down 9 per cent.

German industrial conglomerate Evonik is actually looking to capitalise on the slowdown and has announced it is considering investing in three joint ventures, worth up to $500 million each. Sabic, oil giant Saudi Aramco and Saudi International Petrochemicals (Sipchem) are all named as potential partners. Evonik wants access to cheap Saudi energy supplies in preparation for the eventual recovery of the markets.

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Locusts with high serotonin levels tend to swarm, devastating crops all over the world, but a team from Oxford, Cambridge and Sydney have shown that blocking serotonin receptors can stop the swarms and turn the locusts back into harmless loners.

locusts-small

 


(c) Tom Fayle

It turns out that desert locusts get agitated when their back legs are touched, or if they see or smell too many other locusts (Don’t we all?). This triggers a rise in levels of serotonin (the same neurotransmitter that’s linked to depression in humans), which pretty quickly causes a drastic switch in behaviour (and, bizarrely enough, colour). So locusts which would normally be quite happy on their own, after two hours of being crowed in with a few too many of their colleagues, transform into swarming plagues.

The team also found that if they doped the locusts with ketanserin and methiothepin, which are serotonin receptor antagonists or alpha-methyltryptamine, which blocks serotonin production, then they remained resolutely solitary, however long the team stroked their legs.

Anyway, does this mean that giving locusts antidepressants will stop them from swarming? Possibly, but the effect on the population at large might be a little worrying – the team do mention that since so many animals rely on serotonin signalling it would be necessary to develop a very specific blocker for the receptors responsible for the change in locust behaviour. But in principle such a product could be used in areas where locust populations are growing as a method of crowd control – breaking up the party before it kicks off a swarm.

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What is the role of chemistry in global warming?

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The world’s biggest computer chip manufacturer Intel has managed to integrate a nanostructured Bi2Te3 active cooling device into a computer processor unit (CPU) which can reduce CPU temperatures by as much as 15°C. Because the active cooling device only uses a tiny amount of power and can target only those areas that need cooling, it could help laptops run cooler for longer or make a noisy desktop computer quiter. Perhaps more importantly, devices of this kind can massively reduce the cost of cooling data centres, where the cooling costs can be greater than the cost of the equipment itself.

According to the report published in Nature Nanotechnology, it is normally extremely difficult to integrate nanoscale materials into microscale devices suitable for use in CPU manufacturing processes. However, by using a Bi2Te3 superlattice-based thin-film thermoelectric cooler Intel has shown for the first time that chip-scale refrigeration is viable.

(c) Nature Nanotechnology

intel active coolers

©Nature Nanotechnology

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Calling all twinkle toed scientists (and indeed lab equipment)! Following on from the frankly brilliant AAAS/Science ‘Dance your PhD’ contest, the ACS have launched a NanoTube (a play on the ‘word’ YouTube for anyone like me who is half asleep on a Monday morning) contest called ‘What is Nano?’. Here people are invited to send a short creative video expressing how nano is best visualised – and the entries so far are nothing short of hilarious. My current top two are the dancing lab equipment clip called ‘A nano guide to dating’ and the not very originally named video ‘What is nano?’. Entries will be accepted until the 15 March 2009, and with a prize of US$500 in the offering, it’s time for us all to get our creative juices flowing……

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In this week’s edition of Chemistry World ‘s business round-up, we cover the first stem cell clinical trials in the UK, more misery for the chemical industry and more.

PHARMACEUTICAL

Stem cell trials given green light

Pioneering clinical trials to assess whether a stem cell therapy developed by UK-based ReNeuron can help patients disabled by stroke have been given the go-ahead by the UK Medicines and Healthcare Products Regulatory Agency (MHRA). The ‘first in man’ trials will see the experimental neural stem cell therapy, ReN001, injected directly into the affected region of the brains of 12 stroke patients who hope the stem cells regenerate the brain so the patients can move again.

‘In many ways, ReNeuron has set the regulatory pathway in the UK for cell therapy trials of this type, and we are delighted to have been given the opportunity to move ReN001 into its clinical phase on home territory in the UK,’ says Michael Hunt, ReNeuron’s CEO.

Meanwhile, the US Food and Drug Administration (FDA) has approved the first human trials of a therapy based on embryonic stem cells. Spinal cells grown from embryonic cells will be injected into patients who have just become paralysed from the chest down, in the hope their damaged nerve cells will regrow.

Teva and Lonza to tap biosimilar market

Israeli generics giant Teva, and Swiss-based Lonza, are teaming up to take advantage of the number of biological drugs soon to come off patent, and are planning to form a joint venture to make biosimilars – generic versions of biological drugs. While financial details of the agreement to form the joint venture were not disclosed, it is expected to start in the first three months of 2009.

‘Lonza is an ideal partner for Teva in this field with its deep knowledge and experience in biopharmaceutical development, large scale manufacturing and state of the art manufacturing facilities,’ said Shlomo Yanai, Teva’s CEO.

Genentech profits soar

Despite the gloom sweeping through the pharmaceutical industry, Genentech has reported fourth-quarter net income of $931 million – an increase of 47 per cent over the same quarter in 2007. The results were boosted by strong performances by its bowel cancer monoclonal antibody therapy Avastin (bevacizumab) and its non-Hodgkin’s Lymphoma and rheumatoid arthritis therapy Rituxan (Rituximab). Meanwhile analysts have been waiting with baited breath for a renewed bid from Roche to buy the 44 per cent of the company it does not already own.

Eli Lilly settles Zyprexa probe

Eli Lilly has agreed to pay $1.45 billion (£1.06 billion) to settle the US Department of Justice’s investigation into the company’s US marketing and promotional practices for the antipsychotic medication Zyprexa (olanzapine). Lilly pleaded guilty to one ‘misdemeanor violation of the Food, Drug, and Cosmetic Act’. The company has also reluctantly agreed to settle civil allegations even though the company has said it does not agree with them.

Pfizer to swallow Wyeth?

US drug giant Pfizer is in talks to buy rival pharma firm Wyeth, in a deal that could be worth over $60 billion, according to the Wall Street Journal. However, the two sides have been in discussions for months, and a deal isn’t imminent, the report adds.

INDUSTRY

More misery for the Chemical Industry

The dramatic decline in demand for petrochemicals has caused yet more companies to cut jobs and staff working hours.

Speciality chemical maker Rohm and Haas, which is in the process of being acquired by Dow, has decided to cut a further 900 jobs, 5.5 per cent of its workforce, in a bid to cut costs in the face of the recession. The move is in addition to the 925 job cuts announced in June 2008 as part of its pre-acquisition restructuring plans.

Meanwhile, German chemical manufacturers BASF and Lanxess have announced plans to cut working hours at selected operations. While the number of staff that would be affected at Lanxess has not been disclosed, BASF plans to reduce working hours for 1,680 staff.

Sasol throws itself at the mercy of the courts

South African petrochemicals giant Sasol has turned itself in to the Competition Commission after an internal review revealed evidence of a possible price-fixing ring – sparking an investigation into almost all of South Africa’s petrochemical companies and four gas companies. Sasol has submitted a leniency application to the commission after being hit by a €318 million (£299 million) fine last year for its role in a paraffin wax price-fixing cartel.

The company is also being investigated for allegedly abusing its dominance in the fertiliser market by charging excessive prices for certain products, while agreeing with its major competitors to fix the price of others.

AkzoNobel to paint McLaren

Dutch chemicals giant AkzoNobel is to supply custom designed paint for the Vodafone McLaren Mercedes Formula 1 racing car, the MP4-24. The new paint has halved the time needed to cure bodyparts after painting.

mclaren

PPG’s profits plunge as sales grow

US coating, glass and chemical maker PPG saw its fourth quarter net income plunge 64.5 per cent to $71 million, despite seeing sales grow by 3 per cent. The company’s Industrial Coatings and Glass segments were hit particularly hard by the economic downturn.

AGROCHEMICALS

Bayer Cropscience allies with Ducks Unlimited

Bayer CropScience has joined forces with wetland and waterfowl conservation organisation Ducks Unlimited to develop winter wheat varieties, which according to Bill Buckner, head of North America and President and CEO of Bayer CropScience LP, ‘ is an excellent crop that provides economic advantages to growers when included in cropping rotations while also enhancing waterfowl and other wildlife habitats.’

the company will invest $20 million over the next five years to develop and promote the growing of winter wheat as well as conducting wildfowl and environmental research to ensure sustainable habitats.

duck-3001


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060855_li

This week’s Chemistry in its element podcast is now available online. In this episode Chemistry World’s Matt Wilkinson explores the versatile uses of lithium, including in aircraft and armour plating, for keeping grease runny at arctic temperatures and for powering pace makers.

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When trying to publish the best research in interesting ways, having a new problem to solve often presents difficult questions – and not all of them technical.

Table 1 from the wormhole paper

Dalton Transactions and PCCP have recently published two papers from Henry Rzepa and within each paper was an interactive HTML table – buttons can be pressed to bring up a series of different jmol (3-D, rotatable) views of molecules, which look great. They also contained links to data stored in the Imperial College London institutional repository. Henry was also keen that they be part of the paper itself, rather than being supplementary data, so the questions we had to deal with were:
a) what do we do with the table in print?, and
b) how do we handle the repository links?

(more…)

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In this week’s edition of Chemistry World ‘s business round-up, we cover more pharma deals, more job cuts and further uncertainty in the chemicals production market.

PHARMACEUTICAL

Pfizer to shed 800 researchers
Pharma giant Pfizer has said it will trim the number of researchers it employs by 8 per cent. The cuts look set to affect some 800 scientists as the company looks to streamline operations and reprioritise its efforts in therapeutic areas it believes to be the most lucrative, such as cancer, Alzheimer’s and pain. The cuts are part of the broad restructuring plans that are aimed at shaving some $2 billion from its operating budget as it faces losing patent protection on many of its biggest drugs – those plans have already seen the company shed some 13,000 jobs since 2007.

According to Bloomberg, the pain may not stop there, as senior managers are discussing plans to slash as many as 2,400 jobs, one third, of its US sales force.

Elan for sale?
Irish biotechnology firm Elan has hired Citigroup to advise it on how it can secure access to ‘the necessary financial resources and commercial infrastructure’ to develop and commercialise its pipeline. The result could end in an alliance, merger or sale, with Elan’s president, Carlos Paya, preferring that a leading pharmaceutical company taking an equity stake in the firm.

GSK signs up Biotica
GSK has signed its fourth inflammatory disease deal in as many weeks – this time with UK-based Biotica. During the three year research collaboration, Biotica will use its bioengineering process to develop erythromycin-based molecules and stands to receive £86 million per compound in success-based milestone payments as well as tiered royalties on products sales. GSK has also made an upfront equity investment in the firm.

Galapagos evolves Merck deal
Belgian-based drug discovery firm Galapagos has signed a drug discovery and pre-clinical development deal with US pharma giant Merck & Co. worth up to €170 million (£151 million). The collaboration will see the Belgian firm search for new obesity and diabetes targets and then look for drugs that target them.

Actavis ‘for sale’
Icelandic generics drug company Actavis is putting up the ‘for sale’ sign, with the company’s owner, Icelandic billionaire Thor Bjorgolfsson, looking to raise €8 billion. Bjorgolfsson was hit hard by the Icelandic banking collapse and the nationalisation of Iceland’s second largest bank, Landsbanki Islands, of which he held 45 per cent.

BMS inks deal with ZymoGenetics
Bristol-Myers Squibb has linked up with ZymoGenetics in a deal worth up to $1 billion (£670 million) to gain rights to its hepatitis C treatment, PEG-interferon-lambda. The drug, which is in early-stage clinical trials, slows viral activity through a different, and less common receptor to the one targeted by the commonly used interferon-alpha. The firms hope this will mean the new drug will cause fewer side effects than interferon-alpha.

Merck Serono licenses MS drug from Apitope
German pharma firm Merck Serono has bought the rights to develop and market an experimental multiple sclerosis (MS) drug from British biotech Apitope. The deal could be worth up to $204 million should the peptide-based drug, known as ATX-MS-1467, make it onto the market.

CHEMICAL INDUSTRY

Rhodia buys to resist downturn
French chemicals group Rhodia has agreed to buy the US-based McIntyre Group for an undisclosed amount. The group, which makes surfactants, polymers, speciality chemicals and cosmetic preservatives, had 2008 sales estimated to be in the region of around $146 million.

According to Jean-Pierre Clamadieu, Rhodia’s CEO, the deal will reinforce Rhodia’s presence in ‘innovative markets that are largely resistant to economic downturns’.

AkzoNobel’s non-stick unit snapped up
Dutch chemical giant AkzoNobel is selling its non-stick coatings business unit to US-firm Whitford Worldwide, which makes a range of non-stick coatings for various consumer goods including frying pans, coffee-plate warmers and waffle-makers. The business unit currently employs around 140 people and discussions are underway as to how many will be transferred.

According to market analysts at SNS Securities, the unit was the world’s third biggest seller of non-stick coatings and that AkzoNobel should stand to receive €20 million from the deal.

Sasol to invest in Indonesia
According to US market research firm Industrial Info Resources (IIR), South African energy and chemical company Sasol is planning to invest $10 billion in coal liquefaction plants in Indonesia by 2015. IIR expects the plants to produce 1.1 million barrels of gasoline and oil products per day.

BASF closes Korean plant
German chemical giant BASF is permanently closing its butanediol and tetrahydrofuran (THF) plant in Korea as it moves production to more advanced facilities with access to cheaper feedstocks.

Lanxess cuts butyl rubber output
German specialty chemicals maker Lanxess is cutting output of butyl rubber, one of its key products, because of weak demand due to the global downturn. Plants in Sarnia, Canada, and Zwijndrecht, Belgium, will either be temporarily shut down or operated at reduced capacity. The move will affect some 360 employees that will be asked to work short weeks.

VeraSun idles as demand evaporates
VeraSun, the second largest bioethanol producer in the US, has been forced to idle three distilleries due to falling demand and prices failing to cover the cost of production. The company was forced to seek bankruptcy protection in October, blaming fluctuating corn prices for its financial troubles.

Syngenta signs up biotech expert for biofuels
Anglo-Swiss agrochemical company Syngenta has signed up French biotechnology firm Protéus to develop high-performance enzymes to produce biofuels. The company will use both diversity screening and directed evolution methods to develop enzymes that will convert biomass into biofuels.

Cracker restarts
Japan’s Mitsubishi Chemical has restarted its 450,000 tonnes per year naptha cracker in Mizushima after two weeks of intensive repairs following a gas leak from a corroded pipe.

The plant is now operating at around 80 per cent capacity, as petrochemical demand in Japan is still reduced due to the recession.

LABORATORY

Gene sequencing technology in the dock
Illumina has won the first phase of a two phase trial over the ownership of patents that cover technology used in Applied Biosytems’ SOLiD (sequencing by oligonucleotide ligation and detection) gene sequencer. The intellectual property trail is a complicated one that harks back to 1992 when Applied Biosystems spun out Lynx therapeutics. According to Applied Biosystems, one of Lynx’ employees ‘stole’ intellectual property that was then patented by Lynx in 1995. Lynx was bought by Solexa in 2005 while it was developing its ‘1G analyser’. This was so successful that US-firm Illumina bought the firm in 2007 for around $600 million.

Japanese police turn to Bruker
Japan’s National Police Agency has bought 51 high-end time-of-flight, microTOF-II, mass spectrometers from Bruker. The deal, worth over $12 million, will provide instruments to be used in Japan’s forensic laboratories.

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Pharma giant Pfizer and the MHRA (Medicines and Healthcare products Regulatory Agency) have teamed up to highlight the possible dangers of taking fake medicines – this rather sick advert is the result!

With 10 per cent of all prescription drugs estimated to be counterfeit, pharma firms are investing heavily to ensure that drugs delivered to your pharamcist are genuine. To find out about how Singular ID are using tiny magnets as an anti-counterfitting measure click here.

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