Dow Corning unleashes innovation

US silicone-materials maker Dow Corning is transforming its business strategy to focus on innovations in sustainability, efficiency and alternative energy. Even though the company has managed to stay profitable during the current economic downturn, which has seen many of its competitors struggle, Dow Corning has decided to restructure its business model to stay ahead of the game.

The transformation will see the company start selling all of its standard bulk silicone materials through its online Xiameter business portal - freeing up Dow Corning staff to focus on longer-term and more innovative projects. According to John Lyon, Dow Corning’s director for geographic development, the transformation will ’unleash innovation at Dow Corning’ that will be focused on solving problems associated with the global megatrends of green energy, sustainability and clean water. 

The number of silicone products available through the Xiameter portal will be doubled to 2100, and products sold through the site will take on the Xiameter brand and will no longer be sold through Dow Corning sales channels. The business portal has been upgraded to offer a greater variety of order sizes and credit options, as well as promising transparent pricing which will show price tiers by volume and long-term contract options. In addition, Dow Corning says the order process is more efficient, with an order now only taking two minutes. 

The company is not just concentrating on freeing up staff to focus on innovation; it is also making massive R&D and production investments in solar power through its Hemlock Semiconductor joint venture, and recently teamed up with French chemical company Rhodia to develop new silica/silane materials for use in more fuel-efficient truck and lorry tyres. 

’While our production volumes of silicones have dropped due to the downturn, relative to everyone else in the sector we’ve been doing very well,’ says Lyon. ’Every time we have gone into a significant recession Dow Corning has come out stronger and grown faster. If history is any guide, we will have to hang onto our hats as we will be growing so fast.’ 

Matt Wilkinson 


Swine flu

According to the World Health Organization (WHO), the ’swine flu’ (Influenza A H1N1) outbreak has now officially become a pandemic, with nearly 52,160 cases having been confirmed in 85 different countries - over 2506 of which were in the UK (as Chemistry World  went to press). 

The US Department of Health and Human Services (HHS) has sprung into action and decided to spend around $1 billion (£0.6 billion) to study and produce potential vaccine ingredients. The funds have been used to place new orders on existing contracts with companies that hold US licenses for flu vaccines and will help minimise the risk that the firms produce a run of vaccines that may never be used. Novartis and GlaxoSmithKline have won large contracts to supply antigen and adjuvant ($290 million and $180 million, respectively) while Sanofi-Pasteur has won a $190 million antigen-only contract. 

Novartis has said that it has stolen a march on its rivals using its cell-based manufacturing method and completed its first vaccine batch weeks ahead of schedule.

Generic boost for big pharma

With pharmaceutical firms around the world facing a patent cliff that will see drugs worth over $63 billion (£40 billion) lose patent protection over the next five years, pharmaceutical firms have been rushing to expand their generics businesses and their reach into emerging markets.

UK-based pharma giant GlaxoSmithKline (GSK) has bought a 16 per cent share of its South African partner, Aspen Pharmacare, in a deal the firms are touting as a $418 million asset-swap. GSK has also agreed to develop and sell branded products made by Indian drug maker Dr Reddy’s in emerging markets outside India. 

Novartis has agreed to pay $1.2 billion for the injectable generic drugs business of Austria’s Ebewe Pharma, which will give the Swiss company’s generics unit Sandoz access to a range of generic anticancer drugs. 

Meanwhile, Pfizer has expanded its licensing agreement with Indian generics maker Aurobindo to include 55 new oral drugs and five new injectable drugs that include antibiotics, anti-infectives, cardiovascular and central nervous system drugs. The world’s largest drug maker has also licensed 15 injectable products from Indian generics firm Claris Lifesciences. 

ASCO bonanza

Results from a series of high-profile cancer drug trials - and an unusual partnership deal - were revealed at the American Society of Clinical Oncologists’ annual meeting. 

Blockbuster breast cancer drug Herceptin - now fully owned by Roche - was shown to be effective against stomach cancer in patients expressing a certain biomarker. The trial is the first to show Herceptin to be effective outside of breast cancer.

Positive data was also announced for a new family of compounds for certain difficult to treat breast cancers. The PARP inhibitors - being developed by Sanofi-Aventis (BSI-201) and AstraZeneca (AZ) (olaparib) - work by knocking out a key DNA repair mechanism in cancer cells, stopping cells damaged by chemotherapy from healing themselves. 

Meanwhile, AZ and Merck & Co. are joining forces to test a combination of two experimental drugs - and say they are the first big pharma firms to collaborate on drugs so early in their development. AZ’s AZD6244 blocks the MEK signalling pathway in cancer cells, while Merck’s MK-2206 blocks a complementary pathway, Akt.

J&J file for arbitration

Johnson & Johnson (J&J) has filed an arbitration demand saying that the planned merger between Merck & Co. and Schering-Plough (S-P) constitutes a change of control at S-P that would permit the termination of the co-marketing agreements between the two companies for its inflammatory/immune disease drug Remicade (infliximab), which had 2008 sales of $3.8 billion. 

AZ wins key Seroquel case

A Delaware, US, judge has thrown out a lawsuit against AZ that claimed the antipsychotic medicine causes diabetes. In a one paragraph ruling, the judge granted the company’s request to exclude the testimony from a medical expert for the plaintiff - disqualifying the entire case. 

The case had been scheduled for trial in June and was to be the first to reach court of nearly 10,000 cases that allege the company either hid or minimised evidence that Seroquel use might lead to diabetes. The news will come as welcome relief to AZ after various internal communications had been made public which discussed how off-label usage could be increased. 

Meanwhile, AZ is being sued by US speciality pharma firm Verus for $1.3 billion, after deciding to terminate a deal to take on the latter’s paediatric asthma development programmes, citing toxicity issues. 

Celleron buys AZ cancer drug

In an unusual role reversal, Oxford University, UK, spin-out Celleron has secured the rights to a cancer drug (AZD9468) from pharma giant AZ. Celleron will be using its CancerNav biomarker platform to identify those tumours that the histone deacetylase (HDAC) inhibitor will be most effective against. 

Full development and commercialisation rights to the drug, which will be renamed CXD101, pass to Celleron, with AZ set to receive ’significant milestones and royalties’. 

Merck and Pfizer help jobless

Merck & Co. is increasing the income threshold for patients to qualify to receive Merck medicines for free. The move follows Pfizer’s announcement that it was setting up a similar programme to enable those Americans that have lost their jobs this year and were taking drugs made by Pfizer for at least three months to still get access to the drugs. It has been claimed that the move has been worth at least $100 million in free advertising for the company. 

EU and US to give pharma a boost

The European Commission has announced the first 15 projects to be awarded funding from the Innovative Medicine Initiative. Between them, the projects will receive €246 million (£216 million) and will improve the training of researchers and clinicians involved in drug development.The projects will aim to tackle the main bottlenecks in the drug discovery process. 

Meanwhile, the US National Institutes of Health (NIH) has said it is launching the first integrated drug development pipeline to produce new treatments for rare and neglected diseases. The $24 million programme will focus on finding cures for the 6800 rare diseases that affect over 25 million Americans. 

Pfizer’s $6 billion restructure

According to Pfizer’s latest Securities Exchange Commission filing, the company expects to pay $6 billion to finance the cost-cutting programmes associated with its purchase of Wyeth and the downsizing measures it announced in January. The money will be spent paying off some 17,000 employees and shutting down or selling off five manufacturing plants. Digging a little deeper into the numbers makes painful reading as Pfizer plans to have 53 per cent fewer manufacturing employees in 2010 than it did in 2003 as it looks to outsource as much as 30 per cent of its manufacturing capabilities. The plans are expected to deliver savings of around $3 billion a year. 


F3 factory to provide competitive advantage in Europe

The EU and Europe’s chemicals industry are collaborating to come up with faster, more flexible and environmentally friendly chemical production plants. The new plant designs are intended to reduce the costs of retrofitting or building new plants to more efficiently cope with fluctuating demand. The F3 (flexible fast future) factory project is being coordinated by Bayer Technology Services, which aims to develop modular plants that standardise processes and their interfaces to increase the efficiency and scalability of chemical plants. 

’According to calculations of the consortium, the European chemical industry could reduce costs by about €3.75 billion (£3.2 billion) just by switching existing production facilities over to the F3 factory concept - while opening up new markets in the meantime,’ said Herbert von Bose, director of Industrial Technologies at the European Commission Directorate-General for Research. 

DSM, Mitsubishi play swapsies 

Dutch chemical company DSM and Japan’s Mitsubishi Chemical Company (MCC) are to swap strategic business divisions. In return for its Xantar polycarbonate business, DSM will gain Mitsubishi’s Novamid polyamide business - both of which have annual sales of around €90 million (£78.9 million). 

’This agreement builds on the strength of both companies. It is my belief that our polycarbonate business will have a bright future under the new ownership of MCC and I am very happy to welcome MCC’s polyamide business to the DSM family,’ said Roelof Westerbeek, president of DSM Engineering Plastics. 

The big screen 

DuPont has developed a new generation of organic light emitting diode (OLED) materials that could be used to make cheaper high performance TVs. The US firm’s OLED materials are solution based, so can be cheaply printed like an ink, rather than relying on expensive vapour deposition manufacture. DuPont says it is already in discussion with companies to commercialise the technology.

Dow Chemical gets its coat

US chemicals giant Dow has formed a new coatings business, combining its own coating units with those of Rohm and Haas following its 1 April takeover of the speciality chemicals company. The unit will focus on producing coatings raw materials for the building and industrial markets. 

Meanwhile, Dow’s divestment plan is continuing at break-neck speed in a bid to raise money to pay back loans used to purchase Rohm & Haas. Dow has sold its stake in Total Raffinaderij Nederland N V (TRN), a joint venture it shared with Total S A, to Valero Energy in a deal estimated to be worth $725 million. The company has also sold its calcium chloride business to an unnamed buyer for around $210 million. 

Lanxess increases R&D

German speciality chemicals maker Lanxess is once again planning to increase its R&D spend. The company says its research budget will be increased by 10 per cent this year, despite the economic climate dampening sales expectations. Last year, the company spent €97 million on research and development - accounting for around 1.5 per cent of its sales. 

The company has targeted Asia for much of this increased expenditure and has officially opened an expanded High Performance Rubber R&D Centre in Qingdao, China - a move the company believes underlines its strategy of profitable growth in Asian through targeted investments in research and development. 

Asahi Kasei exits fine chemicals

Japanese chemical manufacturer Asahi Kasei has said it will withdraw from the fine chemicals business and liquidate its Asahi Kasei N&P subsidiary based in Shiraoi in Hokkaido, Japan. The company is also closing its construction materials subsidiary and will close its manufacturing facility which is also based in Shiraoi. The move will see Asahi Kasei cease all operations in Shiraoi. 

Huntsman posts first-quarter loss

US chemical maker Huntsman saw revenues for the first quarter slip by 33 per cent to $1.69 billion due to lower volumes of sales and falling selling prices. This caused the company to slip to an operating loss of $159 million compared to an operating profit of $16 million during the same period in 2008. 

However, it’s not all bad news, as a Texas court has cleared the way for the company to continue its multibillion dollar lawsuit against Credit Suisse and Deutsche Bank, which stems from the failed takeover of Huntsman by Hexion. 

Meanwhile, the company has also announced plans to develop a new fertiliser manufacturing operation at the division’s titanium dioxide pigments manufacturing plant site in Calais, France. The operation of the new fertiliser plant would use all of the spent acid from the company’s pigment manufacturing operations in Calais and enable the permanent closure of the Calais Effluent Treatment Plant. 

BASF to boost amine production

German chemical giant BASF is to boost its amine production capacity by building a new methylamine plant at its Verbund site in Geismar, Louisiana, US. The plant will supply raw materials for some 20 different speciality amines already produced at the site. 

’This is extremely important for us since our customers use these derivatives as key starting materials to manufacture products that provide answers to global needs and future megatrends,’ says Beate Ehle, president of BASF’s Intermediates division. 


Oxford Catalysts go drilling

Oxford Catalysts has signed an agreement with Potter Drilling to explore how its instant steam technology can be used to drill geothermal wells using hydrothermal spallation - a process that uses superheated fluid to drill into rocks. The wells are notoriously difficult to drill using conventional techniques as they are often sunk deep into rocks that are difficult to penetrate and quickly wear down rotary drill bits.

Potter Drilling have overcome this by using superheated fluid to drill into the rocks - but creating such hot fluid can be cumbersome. By using a catalyst to react methanol with hydrogen peroxide Oxford Catalysts can produce steam at temperatures up to 800o C. Because it is capable of generating superheated steam deep underground, Tom Wideman, chief technology officer at Potter Drilling believes ’Oxford Catalyst’s instant steam technology is ideally suited to produce the heat for Potter Drilling’s hydrothermal spallation drilling technology.’ 

Hemlock banks on a sunny future

Hemlock Semiconductor, which includes two Dow Corning joint ventures, has started operating a new 8500 tonne polycrystalline silicon production facility at its Hemlock, Michigan, US site. The new capacity represents the completion of the first phase of its $1 billion expansion plans that were announced a year ago. 

’Despite the economic recession, the long-term outlook for the solar market remains strong,’ said Rick Doornbos, Hemlock’s chief executive. 

This sentiment has been echoed by a recent market research report published by Linx-AEI Consulting, which has predicted that demand for the advanced materials used in photovoltaic solar cells will recover strongly after declining to $2.3 billion during 2009 and could grow to $15 billion by 2015. 

Betting on biogas

Netherlands-based chemicals company DSM has agreed to buy German biotech Biopract, which has developed enzyme technology to convert biomass into methane. DSM says alternative energy initiatives mean the market for biogas is growing at a rate of 15-20 per cent per year, and that its purchase of Biopract will accelerate its expansion into the area.


Drought-proofing gene discovered

Scientists from Monsanto and BASF have discovered a naturally occurring gene that can help corn plants combat drought conditions, helping deliver stable yields even during periods of inadequate watering. 

The companies have said they will use the gene, cspB, in their first-generation drought-tolerant corn product and hope to bring the product to market as early as 2012 if regulatory approval is gained. 

Syngenta buys Circle One

Syngenta is buying US-based Circle One Global to add its Afla-Guard antitoxin crop protection technology to its portfolio. Afla-Guard reduces the formation of aflatoxin, which can develop in corn and peanuts when they are exposed to heat and drought stress, costing US corn and peanut farmers more than $200 million each year. 

The product contains a naturally-occurring fungus that reduces the development of the aflatoxin-producing fungi by out-competing them. 

BugOil licensed 

UK-based Plant Impact has granted a global license to Japanese crop protection company Arysta LifeScience for its BugOil insecticide. The product, which is claimed to control sap-feeding insect pests while not harming beneficial bugs such as bees and ladybirds, is based on a combination of food-grade plant oils, and is expected by the company to receive EU and US approval in 2010. 

In brief

Leukaemia drug license deal 

Biotech drugmaker Genzyme has completed its deal to license three oncology drugs from Bayer, after receiving regulatory approval. The deal - which could net Bayer payments of up to $1.25 billion - is focused primarily around the monoclonal antibody Campath (alemtuzumab), already approved for certain leukaemias but now in Phase III clinical trials for multiple sclerosis. 

CSL’s Talecris buy in doubt

The US Federal Trade Commission (FTC) has filed a complaint in the US Federal District court to challenge the proposed purchase of US-based Talecris Biotherapeutics by Australia’s CSL, as it believes the deal could lead to ’an increase in the likelihood of coordination in the market’. The merged company would displace Baxter at the top of the $15 billion global blood-plasma therapy market, but CSL believes the sector is already ’intensely competitive’. 

Cancer charity bridges big pharma funding gap

British charity, Cancer Research UK, has decided to fund clinical drugs on GlaxoSmithKline (GSK)’s aurora kinase inhibitor 1070916A because of limited corporate funding. In return, the charity will receive a share of the profits if the drug is successfully launched. 

J&J buys Cougar

Johnson and Johnson (J&J) has agreed to buy Cougar Biotechnology for just under $1 billion in a deal that will give it access to Cougar’s investigational prostate cancer drug abiraterone. J&J has made an offer of $43 per share for the company. 

Lanxess goes shopping in Asia

German chemical firm Lanxess is acquiring the chemical business of Gwalior chemical industries for €82.4 million and the assets of Chinese firm Jiangsu Polyols Chemical Company for an undisclosed amount. 

Rhodia gets Kyoto carbon credits

French chemical company Rhodia has received the first emission reduction units generated in Europe, after initiating projects to cut CO2 emissions at its site in Salindres, France. Rhodia estimates an average annual reduction of about 200,000 tonnes of CO2 between 2009 and 2012. 

Johnson Matthey stays positive

Despite its relatively strong reliance on the ailing car industry, catalyst maker Johnson Matthey has beaten analyst expectations by posting a 1 per cent rise in adjusted pre-tax profits for the year ending 31 March. The company warned of a drop in sales during the first half of financial year 2009/10, but says that longer term prospects for automotive catalysts look strong as legislation on vehicle emissions continues to tighten. 

Clariant defoams

Swiss chemical company Clariant has bought XL Performance Chemicals for an undisclosed amount to bolster its presence in the foam control market.’We see great business opportunity here in a global market that exceeds $2 billion and is growing annually at a rate of 4 to 5 per cent,’ says Hugh Fowler, head of Clariant’s North American Functional Chemicals group. 

Better batteries

BASF is to commercialise a new cathode material for advanced lithium batteries developed by the US Department of energy (DOE)’s Argonne national lab. The German chemicals giant says it will also build a US production facility for the material, should it win a DOE electric vehicle development grant. Argonne claims the cathode material - a mixed metal oxide - will extend battery lifespan, while substantially increasing energy storage.