C&EN: TODAY'S HEADLINES - TOUGH TIMES IN PHARMA CHEMICALS

MICHAEL MCCOY AND RICK MULLIN

Combining chemistry and biology for pharmaceutical production was a key theme for many of the companies at Informex, the custom chemistry trade show sponsored by the Synthetic Organic Chemical Manufacturers Association and held in New Orleans last week.

The custom pharmaceutical chemicals industry is in a downturn, and many attendees don't see substantial growth returning until 2004 or beyond. Talking frankly at an opening meeting, keynote speaker Andrew N. Liveris, president of Dow Chemical's performance chemicals group, told attendees that "this sector will not return to the high-growth, high-margin era of several years ago."

MANAGEMENT CHANGES

Honeywell is renaming its life sciences business as Research and Life Science Solutions and bringing in a new vice president and general manager, Whitney Erickson. Current business head Todd McGee is looking for a new job within Honeywell.

Rhodia, fresh from reorganizing into four market-focused divisions, named Nick Green president of Rhodia Pharma Solutions.

And Bayer named Roger Pettman, founder of ChiRex and a former Rhodia executive, to head worldwide marketing of pharmaceutical intermediates.

Liveris challenged the many small firms exhibiting at Informex by asserting that they are at a competitive disadvantage to large, deep-pocketed companies such as Dow. He predicted industry consolidation in which the main survivors five years from now will be Akzo Nobel, Avecia, BASF, Degussa, Dow, DSM, and Lonza. Surviving niche players, Liveris said, will be Albany Molecular Research, Ricerca, Girindus, deCODE Pharmaceuticals, Irix Pharmaceuticals, Biovitrum, LCO Santé, and BioInvent.

Many of Liveris' small-company survivors are in pharmaceutical contract research and process development. At Informex, DSM announced a push into this field with the acquisition of a 30% stake in the Dutch contract research firm Syncom and the expansion of chemical process research in its Rescom unit.

Liveris' big-company survivors all boast chemical as well as biotechnological expertise, a combination that many firms called crucial. Peter Jackson, vice president of Avecia's pharmaceuticals unit, pointed to predictions that biotech products will account for 50% of drugs by 2015. He noted Avecia's research into combination drugs in which a highly potent small-molecule active is delivered by a large-molecule protein.

Alan Shaw, CEO of Codexis, a specialist in directed evolution, claimed that most of the innovation in the sector will occur at smaller, specialized biotech companies. Larger chemical companies will likely partner with or acquire these firms rather than innovate on their own. For example, Codexis announced at Informex that enzymes maker Novozymes has launched two new products using Codexis technology.

However, Peter Nagler, president of Degussa Fine Chemicals, said larger companies will manage to keep up on biotech innovation, which he sees as the best route to new chemistry in fine chemicals. Degussa developed a line of enantiomerically pure b-amino acids in cooperation with its internal Biotechnology Project House, in which researchers from several company divisions collaborate on biocatalysis.--

INTERESTED PARTIES Informex' opening reception sponsored by Dixie Chemical attracted several thousand attendees.

PHOTO BY JOHN F. STALEY/FILM DIGITAL