• Astaris partners at odds over phosphoric acid technology
• Wacker shifts wafers to Asia
• Sadler calls for industry unity
• Monsanto plans job reductions
• Allergan to buy Oculex business
• NuSil boosts R&D capability
• Omnova cutting 100 employees
• DuPont donates zeolite patents
• Bristol-Myers signs new deal, advances old
• Pyrosequencing on a roll
• EC reduces cost estimate for new policy
• Prices slip in September
• Peroxide boost in Finland
• Celanese picks China suppliers
• BUSINESS ROUNDUP

BIGGER NuSil has doubled its capability for conducting silicone R&D. NUSIL PHOTO

Solutia is suing FMC over what it says is the failure of purified phosphoric acid (PPA) technology that FMC provided to Astaris, the phosphate chemicals joint venture owned equally by the two firms. Formed in April 2000, Astaris combines most of the phosphate operations of FMC and Solutia. One of the venture's first undertakings was the construction of a $60 million PPA plant in Conda, Idaho, using technology employed by FMC's Spanish subsidiary FMC Foret. Although the plant was completed in May 2001, Solutia claims it has never operated at more than 50% of capacity and that it is unable to make food-grade PPA. Solutia alleges that, at the time of the joint venture's formation, FMC knew the Conda plant might not work with the local phosphate ore, which is different from the ore employed in Spain. Solutia is seeking $322 million in damages. FMC says Foret has more than 15 years of successful PPA production experience and that it intends to "vigorously defend itself." The Conda plant will close as part of an Astaris restructuring (C&EN, Oct. 13, page 20) and is being sold to Agrium, a fertilizer producer on whose site it was built. FMC attributes the closure to market conditions, while Solutia blames it on the operating problems.

Wacker's Siltronic division will concentrate its production of 200-mm silicon wafers for the semiconductor industry in Asia, ending production in Germany. The decision reflects overcapacity and low prices for 200-mm wafers, Wacker says. Meanwhile, the firm will boost its German capacity for 300-mm wafers by building a plant in Freiberg. The shift will eliminate some 800 jobs in Wasserburg and Burghausen, Germany; some workers will be transferred to posts in other Wacker units, including the new Freiberg facility.

Whitson Sadler, former CEO of Solvay America, last week called for chemical industries around the world to stand together to oppose controversial programs such as the European Union's chemical testing program and for U.S. industry leaders to support the American Chemistry Council's Reputation Initiative. On accepting the Chemical Industry Medal of the Society of Chemical Industry (American Section), Sadler said if industry leaders can proceed as a cohesive group, "we can win. If we allow ourselves to splinter and fragment, we will lose." ACC has scheduled a vote next week on the Reputation Initiative, which the association hopes will begin to improve public opinion about chemicals. Some ACC members are said to oppose the initiative.

Monsanto is cutting jobs and costs as it shifts focus from agricultural chemicals to seeds and biotechnology (C&EN, Oct. 6, page 9). The company will reduce costs associated with its Roundup herbicide unit, exit the European wheat and barley seed business, and discontinue its program to produce drugs in genetically engineered plants. Monsanto expects the actions to produce after-tax savings of up to $95 million in fiscal 2005 and up to $105 million the following year. Monsanto will take charges relating to the cuts of up to $155 million in 2004. The firm expects its global workforce of 13,200 to be reduced by 7 to 9% in its 2004 fiscal year. Last week, Monsanto reported a $188 million net loss for the fourth quarter of its 2003 fiscal year ending on Aug. 31.

Allergan has agreed to acquire Oculex Pharmaceuticals for about $230 million in cash, pending regulatory and shareholder approvals. Privately held Oculex develops treatments for diseases of the eye and has a proprietary biodegradable drug-delivery technology. Allergan and Oculex have collaborated on developing ophthalmic compounds since 2001. Oculex' lead product, Posurdex, is a sustained-release implant that delivers dexamethasone to the back of the eye to treat macular edema; Allergan anticipates starting Phase III trials of Posurdex in early 2004.

NuSil Technology, which makes and formulates silicone compounds for health care, aerospace, electronics, and photonics, has doubled R&D and product development capabilities at its site in Carpinteria, Calif. CEO Richard A. Compton says the expanded facilities, which employ 55, are the culmination of a major renovation of the firm's headquarters. Privately held NuSil acquired Rhodia's long-term implantable silicone business in June.

 

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Specialty chemicals maker Omnova Solutions is laying off about 100 workers, most of whom got their pink slips last week. The company made the decision because of low demand and high raw material costs. The move will reduce costs by $6.2 million next year and comes on top of the $16 million in selling and administrative costs Omnova reduced in the third quarter. It will take a $1.3 million restructuring charge in the fourth quarter.

DuPont has donated three patents dealing with zeolite catalysts to Michigan State University. DuPont did not put a value on the donations, but in the past, it and other chemical firms have donated patents valued at millions of dollars to learning institutions. While U.S. tax law allows corporations to take tax write-offs for such donations, published reports indicate that the IRS is investigating the size of the deductions some corporations are taking for the gifts.

Bristol-Myers Squibb has agreed to pay Corgentech up to $250 million to jointly develop a cardiovascular therapy now in Phase III clinical trials. Corgentech's E2F Decoy (edifoligide sodium) is an oligonucleotide that prevents vein-graft failure by strengthening vein walls in coronary and peripheral artery bypass surgeries. BMS will pay an initial $45 million in cash and equity investment in Corgentech and up to $205 million for milestones. Meanwhile, FDA has accepted a regulatory filing from BMS and partner ImClone Systems for the anticancer drug Erbitux. In granting priority review status, FDA must act on the filing by Feb. 13, 2004; the agency's failure to accept a December 2001 filing caused the collapse of ImClone's stock and the restructuring of the companies' record-breaking $2 billion alliance.

Pyrosequencing, based in Uppsala, Sweden, has agreed to acquire Biotage, a subsidiary of Dyax, for approximately $35 million in cash. Based in Charlottesville, Va., Biotage supplies purification and separation systems for small-molecule drug discovery. According to Pyrosequencing CEO Jeff Bork, Biotage complements the Swedish firm's drug discovery systems business and gives it a base in the U.S., its largest market. Bork says synergies should lead to some $4 million in annual cost savings. Earlier this month, Pyrosequencing acquired Personal Chemistry, a microwave chemistry systems supplier.

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The European Commission says its revisions to the chemical regulations it is developing will dramatically lower the cost of implementation. Direct costs of the policy are now estimated to be $2.7 billion over an 11-year period, down by more than $11 billion from earlier estimates. The savings come from reduced testing and simplified registration for low-volume chemicals, exclusion of polymers from registration, and a major reduction in downstream user requirements. The EC estimates that total costs to the chemical industry and its downstream users will be anywhere from $3.3 billion to $6.0 billion. Public health benefits are estimated to top $50 billion over 30 years. The European Chemical Industry Council says it is pleased with the reduced estimates, but it still wants an independent assessment of the program's impact.

U.S. chemical prices fell slightly between August and September, according to the latest data from the Labor Department, but they were still ahead of year-earlier levels. The September producer price index for chemicals and allied products fell 0.3% from August to 161.2 (1982 = 100) but was still 4.6% higher than the comparable month in 2002. For the important industrial chemicals sector, the index for September was 139.5, off 1.2% from the previous month, but 7.1% ahead of September 2002.

Finnish Peroxides, which is 75% owned by Solvay, will expand capacity for hydrogen peroxide by 15%. The improvements come through Solvay technology originally intended for "mega-plant" projects such as the one that would feed the propylene oxide plant being considered by a joint venture between BASF and Dow Chemical. But Solvay says the technology can be adapted to medium-sized sites such as Finnish Peroxides' in Kymi, Finland, enabling it to have "one of Europe's most efficient hydrogen peroxide plants," according to Eero Seuna, managing director.

Celanese has selected Maison Engineering & Constructors and China Huanqui Contract & Engineering as providers of engineering and construction management for an acetic acid plant it hopes to build in Nanjing, China. Foster Wheeler will provide design and procurement services. Celanese announced its plan to build the 600,000-metric-ton-per-year plant in March. The firm has since faced difficulty securing a source of feedstock carbon monoxide (C&EN, July 21, page 12).

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BUSINESS ROUNDUP

• GPC Biotech is restructuring to focus on its oncology drug programs. It will cut 42 out of 200 employees, mainly from its technology research staff in both the U.S. and Germany. The company recently started Phase III trials in prostate cancer of its leading product, satraplatin.
• Cambrex Biosciences and Ligand Pharmaceuticals have agreed to a five-year extension of an agreement under which Cambrex manufactures a recombinant protein for Ligand's cancer drug Ontak at its Hopkinton, Mass., facility.
• Chiron has licensed the recently FDA-approved antibiotic Cubicin from Cubist Pharmaceuticals. In exchange for commercialization rights outside the U.S., Chiron will pay $18 million up front and milestone payments and royalties that could bring the total price to $50 million.
• BASF Chairman Jürgen Hambrecht has been elected president of the German Chemical Industries Association (VCI). He takes on a two-year term ending in October 2005. New VCI vice presidents are Degussa CEO Utz-Hellmuth Felcht, Süd-Chemie CEO Jürgen F. Kammer, and Bayer Chairman Werner Wenning.
• Ticona says improvement projects at its Oberhausen, Germany, plant will raise capacity for ultra-high-molecular-weight polyethylene by about 33% to 40,000 metric tons per year. The hike is expected to be complete in the second half of 2004.
• Rütgers Organics has indefinitely idled its State College, Pa., plant, which makes fine chemicals for agrochemical and polymer markets. Most production will be relocated to the firm's Augusta, Ga., facility. About 65 employees will be affected.

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