While most of Europe appears to be making its way out of recession, the UK has seen another quarter of decline - with gross domestic product (GDP) once again falling. Even though the fall in GDP has stabilised to 0.4 per cent, the fact that the UK economy has been in recession for six consecutive quarters is unlikely to boost public confidence in the crucial build-up to Christmas. And that could spell yet more misery for a chemical industry that has seen some signs of stabilisation of late.

With the banks starting to make money again, credit should hopefully start flowing more freely again, and even if not, the £6 billion of bonuses that UK bank staff are set to receive should at least help grease the wheels of recovery. But while many in the financial sector were still celebrating the news that they are set to receive a bumper bonus this year, the Governor of the Bank of England, Mervyn King, has launched a stinging attack on the behaviour of the banking system, even paraphrasing Sir Winston Churchill: ‘never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.’

PHARMACEUTICAL

Cervical cancer vaccine war heats up

GlaxoSmithKline (GSK) has been given the green light by the US Food and Drug Administration (FDA) to market its cervical cancer vaccine Cervarix in the US and compete against Merck & Co.’s Gardasil. GSK has said the vaccine will be available in the US by the end of the year and initial indications are that it plans to charge less for Cervarix than Merck does for Gardasil - which has just been approved by the FDA for the prevention of penile warts in young men. While some analysts predict that this could open up a market worth some $300 million (£183.5 million) for Merck, a recent study in the British Medical Journal suggests that vaccinating pre-adolescent boys in a human papillomavirus (HPV) vaccination programme would not be cost effective.

Meanwhile, Merck has received approval from the European Commission for its merger with Schering-Plough.

HGS shares soar as lupus drug wows again

Human Genome Sciences (HGS) has seen its share price soar more than 500 per cent since July when it released unexpectedly positive data from a Phase III trial of its lupus drug Benlysta (blimumab). A full analysis of the data has confirmed the positive analysis and sent the share price up a further 5 per cent to $22 a share. Speculation has been mounting that GlaxoSmithKline (GSK), which is developing the drug with HGS, is lining up a bid for the company.

The company will publish data from a second Phase III trial at the beginning of November and if the data is as positive, it expects to file for approval in the US early in 2010. If approved, Benlysta will become the first new lupus drug in 50 years to hit the market and will cost patients in the region of $20,000 a year.

But the company’s good news doesn’t stop there, it has also said it has received a $75 million milestone payment from Novartis as it has successfully completed development of its hepatitis C treatment Zalbin (albinterferon alfa-2b) and the two companies will be imminently submitting the drug for marketing approval.

Lonza switches targets

Lonza has withdrawn its $700 million bid to acquire contract manufacturing and development services firm Patheon and instead has made an investment agreement with German biotech firm Cilian.

‘We believe that Cilian’s production platform for enzymes, antibodies and other proteins has the potential to provide attractive innovations in the nutrition and biopharmaceutical area,’ says Thomas Kiy, global head of strategic business development of Lonza Life Science Ingredients.

INDUSTRY

Ineos to produce more acetonitrile

Ineos’s nitriles division has rolled out a modification to their acrylonitrile production plants that allows it to tweak the amount of acetonitrile produced as a by-product. The idea is that this will allow the company to maintain supply of the useful solvent in times when demand for acrylonitrile is low - avoiding the situation that occurred last year when decreased acrylonitrile production caused a world shortage of acetonitrile. While the situation is no longer so acute, the price of acetonitrile is still relatively high - and given the state of the economy and the automotive industry it’s likely to stay that way for a while. Ineos says that implementing the technology at its three sites in the UK and US will stabilise future supplies.

SABIC’s sales and profits still down

The Saudi Basic Industries Corporation (Sabic) is still struggling due to the recession with third quarter revenues down 45 per cent at Riyal8.6 billion (£1.4 billion) compared to the same quarter the previous year. Operating profits were down 48 per cent at Riyal6.4 billion during the quarter compared to last year, although the results were slightly more favourable than during the previous quarter.

‘In spite of repercussions arising from the global economic crisis, SABIC has maintained the same operational levels. SABIC’s total production during the first nine months of 2009 reached 44 million tons, an increase of four per cent, while quantities sold were 34.5 million tons, an increase of three per cent over the same period last year,’ said Mohamed Al-Mady, chief executive of Sabic.

Despite Rohm & Haas buy Dow still down

Dow’s third quarter sales of $12 billion were down 22 per cent from reported sales in the same period last year and 32 per cent lower if Rohm & Haas’s sales are taken into account. However, operating profits soared to just over $1 billion compared to $620 million in the same time period last year - primarily due to asset sales needed to pay for its acquisition of Rohm & Haas.

DuPont starts to bounce back

Despite DuPont’s third quarter revenues and operating profits being 18 per cent lower than during the same period last year ($6 billion and $491 million respectively) the company’s net income rose 11 per cent to $409 million due to lower costs.

‘We delivered on our commitment to shareholders, while navigating through some very difficult business conditions,’ said DuPont’s chief executive Ellen Kullman. ‘We see overall sequential improvement in our industrial businesses as market conditions begin to firm. With a more streamlined organisation, permanent fixed cost reductions, and increased productivity, DuPont is well-positioned to capitalize as markets improve.’

AGROCHEMICALS

Syngenta positive on future growth

Syngenta, the world’s largest agrochemical maker, was positive about growth in 2010 despite seeing revenues for the third quarter fall 12 per cent to $2 billion. Crop Protection sales were down 14 per cent compared to the same period last year, falling to $1.6 billion.

The company saw growth in Latin America boosted by increasing amounts of land being used for growing soy beans, while sales in Asia Pacific were driven by increased usaged of fungicides. Sales in Europe were hindered by continued credit pressures.

Matt Wilkinson and Phillip Broadwith