Business roundup: March 2008

Can biologics go generic?

US President George Bush has called for legislation to enable the US Food and Drug Administration (FDA) to approve generic versions of biologic (typically protein-based) drugs (see also Chemistry World, January 2008, p16). But a key lawmaker, Representative John Dingell, chairman of the House Energy and Commerce Committee, has said that there is currently no clear way to ensure that generic versions will work in the same way as the original drug in the body. Unlike small molecule drugs, it is difficult to manufacture an identical version of a branded biologic and even minute differences between a generic and the original can seriously alter a biologic’s effect. 

Pharmaceutical companies that specialise in generic medicines, such as Barr Pharmaceuticals in New Jersey, and Illinois-based Hospira, are pushing for a means to approve their drugs in the US. Last month Teva, a generic drug firm based in Israel, put a foothold in the market by paying $400 million (£205 million) for the privately-owned US biotechnology company CoGenesys.

Roz Britton from the Association of the British Pharmaceutical Industry said that it supports the push for a specially-designed protocol to assess and approve biological generics or - as it terms them - ’biosimilars’. ’These drugs can never be identical to the original,’ she told Chemistry World. ’And we would want to see much more stringent control of clinical trials for these treatments.’ 

Meanwhile, the small-molecule generics market continues to boom. The Generic Pharmaceuticals Association (GPhA) said that 65 per cent of medicines prescribed in the US in 2007 were generics, up 2 per cent on 2006. Yet despite their predominance, UK-based industry analyst IMS Health estimates that generics account for only 20 cents in every dollar spent in the US on pharmaceuticals. Another study by market intelligence firm Cutting Edge Information has predicted that half of all pharmaceutical companies will enter the generics market by 2010. 

Victoria Gill

Business news in brief

Company carbon footprint 

German chemicals giant BASF has released a carbon emissions balance sheet - and says its products enable its customers to save three times as much CO₂ as is released in making, and ultimately disposing of, the company’s products. The calculations include inputs from raw materials and precursors. The company claims to be the first in the world to release such data and says it has plans to improve its carbon balance further. 

Exploding dust

An explosion and fire at a sugar refinery in Georgia, US, on 7 February, that killed six workers and injured dozens more, has been attributed to combustible sugar dust. The US Chemical Safety Board, which has deployed a team of investigators at the site, noted that finely powdered sugar dust has also been responsible for a number of previous refinery blasts. 

BP cutbacks continue 

BP has announced that 5000 jobs will be lost as the company looks to cut costs by $1.5 billion (£764 million) per year. Most (60 per cent) of the cuts will be corporate, 30 per cent will be from refining and marketing, and 10 per cent from exploration and production. The announcement was made as the company revealed its 2007 profits to be $17.3 billion - 22 per cent lower than 2006. 

Texas City investigated again

Following a preliminary investigation, the US Chemical Safety Board has decided it will pursue a full formal investigation into the January 14 explosion that killed a worker at BP’s Texas City site. The explosion was the third fatal accident at the facility since the 2005 explosion that killed 15 people. 

Ineos acqisition cleared 

The European Commission has approved Ineos’s purchase of Norsk Hydro’s Hydro Polymers businesses in Norway, Sweden and the UK. In December the Commission raided both firms over an alleged illegal exchange of information between the two companies - but has closed the investigation after concluding that the allegations were unjustified. 

DSM looks to its margins

Dutch chemicals company DSM plans to sell its low-margin base chemicals business during 2008, and boost its life science and performance materials business through acquisition. The company is looking to continue to restructure, focusing on higher margin sectors of its business. 

Tianjin venture

Saudi-based chemicals group Sabic and China’s Sinopec have signed a deal to build a 1 million tonne per year ethylene derivatives complex in Tianjin, China. The 50:50 joint venture will cost $1.7 billion, and is scheduled for completion in 2009. Sinopec is also planning a $2.2 billion expansion of its central China plants, as the company boosts its refining capacity. 

Cleaner water 

Oxford-based Microbial Solutions, a company newly spun-out from the Natural Environment Research Council (Nerc), has raised £1.2 million to commercialise its bacteria-based wastewater treatment.

The microbes can clean toxic metal-working fluids from engineering industry wastewater, and do so more economically than current methods which require waste to be transported off-site for clean-up. 

The methane challenge

US chemicals company Dow has announced the winners of research grants as part of its ’methane challenge’. Academic consortia led by Cardiff University, UK, and Northwestern University, US, will split $6.4 million in funding to develop routes to directly convert methane into olefins and olefin precursors - important chemical industry feedstocks. 

Tiny magnets to repel drug counterfeiters 

A large pharmaceutical packaging company is hoping that nanotech security tags devised by a small Singaporean firm will help it combat counterfeit drugs. India-based drug supplier Bilcare says it is in talks with Indian pharmaceutical companies to commercialise the magnetic nanoparticle fingerprinting technology by Singular ID, a spin-out it bought for SGD 19.58 million (£7 million) in January 2008. According to Bilcare, Pfizer and other US-based pharmaceutical companies have also shown ’keen interest’ in the system.

Skills Academies

The UK government has announced an expansion of its Skills Academy network, with the establishment of a Nuclear Training Academy. The news follows the recent announcement of an Academy for the Process Industry, which will include centres of training excellence in chemicals, pharmaceuticals, and polymers. The scheme was created to address the skills gap faced by UK businesses in certain sectors, and is backed by employers, to ensure the training is industry-relevant.

Another rubber fine

The European Commission has fined German chemicals firm Bayer, and Japan’s Zeon, for colluding to fix the price of synthetic rubber products between 2000 and 2002. Bayer has been told to pay €28.87 million (£21.42 million), and Zeon will be fined €5.36 million.

In early December 2007, Bayer escaped being fined for chloroprene rubber price fixing by blowing the whistle on the six member cartel, which had also included Dow and DuPont. 

Picture this

Japanese photography company Fujifilm is planning to buy pharmaceuticals firm Toyama for up to JP¥155 billion (£730 million).

Fujifilm has already moved into medical equipment such as endoscopes, as sales of photographic consumables fall with the move to digital photography. Announcing the move, Fujifilm management highlighted Toyama’s experimental bird flu drug, which is expected to be launched in 2009. 

AZ biotech spinout

UK-based pharma firm AstraZeneca has spun off part of its gastrointestinal (GI) R&D to form a new biotech company called Albireo, based in Gothenburg, Sweden. AZ will remain a minority shareholder, but the new company will be financed by a group of private equity firms who have invested an initial $27 million. 

Albireo takes one clinical and a number of pre-clinical GI programmes from AZ, leaving the parent company to focus its GI research on gastroesophageal reflux disease (GERD), and its current GERD drug Nexium. 

Vytorin controversy 

New York’s Attorney General has subpoenaed US pharmaceutical companies Merck and Schering-Plough, for documents and information, to assess whether the companies hid the results of the study on the efficacy of Vytorin, their jointly marketed cholesterol drug. The study, which showed the drug was no more effective at slowing artery clogging than a cheaper generic, was completed in April 2006, but the trial’s results weren’t published until January 2008. US prescriptions for the drug fell by about 9.5 per cent in the week following the news. 

The Connecticut Attorney General is also investigating Vytorin, to assess whether state funds were used on ’false assurances about the effectiveness and safety of these drugs.’ 

EU extends emissions trading to petrochemicals 

Proposals unveiled on 23 January for reform of the EU emissions trading system (ETS) will impact on the chemicals sector by extending the system to hitherto exempted activities and to nitrous oxide (N₂ O) emissions. The changes are part of a package of proposals aimed at achieving a 20 per cent cut in EU greenhouse gas emissions by 2020.

To date, the ETS regime of tradeable emission permits has covered carbon dioxide (CO₂) emissions from some 10,000 major sources across Europe such as power generation, oil refining, and production of iron, cement and glass. The European Commission now proposes to include CO₂ emissions from petrochemicals and ammonia production.

As for N₂ O emissions, the ETS will be extended to production of nitric, adipic and glyoxylic acid, as well as emissions of perfluorocarbons from the aluminium sector.

Generic pay-off

The US Federal Trade Commission has filed a lawsuit against Cephalon, alleging that the pharmaceutical company protected sales of its best-selling drug by paying four generic drug makers to delay introducing their own copies of the drug. Cephalon’s narcolepsy drug Provigil currently makes the company $800 million in annual sales, and Cephalon is accused of paying a total of $200 million to generic manufacturers Teva, Barr, Ranbaxy and Mylan to delay market entry until 2012. 

Amgen’s Japan agreement

US biotech firm Amgen has agreed to license up to 13 of its drug candidates to Takeda, Japan’s largest drug company, in a deal that could be worth up to $1.18 billion. The agreement sees Takeda acquire Amgen’s Japanese arm, and take over the development and commercialisation of the drugs in Japan, in return for marketing rights to the medicines in Asia. Drugs typically receive regulatory approval in Japan four years after the US, due to the extra tests required by the country’s drug regulators.

Roche strikes Ventana deal

US diagnostics maker Ventana Medical Systems has finally signed a deal to be acquired by Roche, almost a year after the Swiss firm made its first unsolicited bid for the company. Ventana finally agreed to recommend to shareholders an $89.50 per share offer - up from an initial bid of $75 per share - which makes the deal worth $3.4 billion. Roche says Ventana is leader in the fast-growing histopathology (tissue-based diagnostics) sector, and that the acquisition will allow the company to broaden its diagnostic offerings, complementing its current in vitro diagnostic systems and oncology therapies. 

Gel-based HIV barrier?

Pfizer has given the International Partnership for Microbicides a royalty-free license to try to develop the US pharma giant’s anti-HIV drug maraviroc into a vaginal cream or gel to prevent HIV transmission during sex. Such formulations are intended to help women in the developing world to protect themselves from the disease.

Maraviroc, already sold as an antiretroviral HIV treatment under brand names Selzentry and Celsentri, works by preventing the most common strain of HIV from entering healthy cells. The news follows the surprise failure of US pharmaceutical firm Merck’s experimental HIV vaccine in 2007. 

Thalidomide returns to Europe

The European Medicines Agency (EMEA) has recommended approval of thalidomide to treat bone marrow cancer - almost 50 years after it was withdrawn as a treatment for morning sickness after causing birth defects in thousands of children. The decision, a boost for the drug’s US makers Pharmion, follows similar approvals in other countries including the US and Australia. The decision to approve the drug was seen to be more sensitive in Europe, where the drug had been most heavily marketed for morning sickness. The Committee for Medicinal Products for Human Use (CHMP) says it will install a number of measures to ensure the drug is not taken by pregnant women. 

GE acquires Whatman

GE’s healthcare arm has agreed to buy filtration technology company Whatman for £363 million. GE plans to incorporate the business into its Life Sciences division, and says Whatman’s filtration and sample preparation technologies will help the company’s research into the role of genes and proteins in disease. 

BASF seeks herbicide approval

Germany chemicals company BASF has unveiled a new herbicide, recently submitted for regulatory approval in North America and Australia, with other regions to follow. Saflufenacil, which will trade under the name Kixor, is a new member of the trifluoromethyl uracil family of herbicides, which are PPO inhibitors, blocking chlorophyll biosynthesis in weeds. BASF says the herbicide has blockbuster potential.

Stent approval

US firm Medtronic has received Food and Drug Administration (FDA) approval for its Endeavor drug-eluting stent, the first such approval in nearly four years. The market for drug-eluting stents - used to prop open clogged arteries around the heart - has shrunk in the past year due to concerns that patients can suffer life-threatening blood clots. Medtronic was able to show Endeavor triggered no more such events than bare metal equivalents. 

The stent industry remains embroiled in legal disputes. Boston Scientific has been found guilty of breaching a New Jersey radiologist’s patent for a film-based drug delivery system, an allegation Johnson & Johnson is currently also battling. In addition, all four major stent manufacturers - Boston Scientific, J&J, Abbott and Medtronic - are currently suing each other for patent infringements. 

Firms face World Bank debarment

Several European chemicals companies, including Bayer and BASF, are alleged to have colluded in overcharging a World Bank-funded antimalarial programme in India intended to improve the health of the country’s poor. The firms face possible action by the bank and the Indian government, depending on the findings of further investigations. 

 

DuPont ups acreage

DuPont has announced a new GM corn seed that combines multiple insect control traits with herbicide tolerance. The US firm hopes to gain EPA approval to reduce the land farmers must set aside as pest refuges when using the seed, thereby boosting overall yield. Refuge areas of non-GM seed are intended to delay the onset of insect resistance to the GM crop’s pest controls. 

China biotechnology deal

Germany’s BASF Plant Science has agreed a cooperation and licensing agreement with the National Institute of Biological Sciences (NIBS), Beijing, China. The deal is focused on the development of transgenic crops based on NIBS’ discovery of a family of genes that increase crop yield, in staples such as corn, soybeans and rice. The deal sees BASF receive exclusive rights to commercialise the crops outside China.

Speeding up sequencing

Genetics research technology company Illumina has sequenced an entire human genome in a matter of weeks, and for around $100,000 - cutting both time and cost over previous efforts, the company says, and a step towards making entire genome sequencing routine. The scientists used Illumina’s Genome Analyzer, allowing them to sequence the entire genome in lengths of 35-50 bases. The project also marked the first time an African human genome has been sequenced. 

Chemtura sales

US speciality chemicals company Chemtura has agreed to sell its fluorochemicals business to DuPont, and its oleochemicals arm to PMC Group, for undisclosed sums. Chemtura CEO Robert Wood says the company plans to focus on its core polymer additives business. 

Evonik scales down

German chemicals company Evonik is to start supplying sample amounts of its catASium and catCXium catalysts families through Sigma-Aldrich. The deal means the hydrogenation and cross-coupling catalysts will be available in research quantities to R&D chemists. 

Syngenta looks to genes

Switzerland’s Syngenta has formed a partnership with US biotech Athenix to discover novel corn insect and soybean cyst nematode resistance genes. Athenix will screen its collection of microbial strains to identify leads, which Syngenta will use to develop new corn and soybean products. 

Sanofi antibody

French pharmaceuticals company Sanofi-aventis has agreed to pay up to $500 million for the rights to an experimental anti-tumour drug developed by US biotech Dyax. In pre-clinical animal testing, the monoclonal antibody-based treatment has been shown to successfully target the blood supply of solid tumours. 

Teesside investment

Plans to build a new £2 billion crude oil processing plant on Teesside, UK, are gathering pace, with the announcement that development company Sonhoe has reached agreements with GE Oil and Gas, and Chevron Lummus Global, to buy key equipment such as reactors and hydrocrackers. 

Amgen subpoena

US biotech pharmaceutical company Amgen has been ordered to provide documents to the New Jersey Attorney General, following accusations the company marketed psoriasis and rheumatoid arthritis drug Enbrel for off-label uses, and violated patient privacy laws. 

Tekturna approval

Switzerland’s Novartis has won FDA approval for a combination blood-pressure lowering drug based on Tekturna. The medicine combines recently released Tekturna - a potential blockbuster - with a diuretic called HCT, and works better than either drug alone. 

Merck settles lawsuits

US pharmaceutical firm Merck has agreed to pay $671 million to settle various lawsuits and investigations by the US government over drug marketing and pricing violations. The investigations relate to the amount Merck charged federal healthcare plans for its drugs, and allegations the company offered doctors kickbacks. 

Thai drug decision

Thailand’s new government says it may start paying for certain cancer drugs, reversing the decision of the former administration to disregard international patent law and make cheap generic versions of the medicines. 

Johnson Matthey purchase proceeds

Johnson Matthey has completed its €214 million cash acquisition of German’s Argillon Group. Argillon is a leading producer of diesel vehicle emissions catalysts that control NO_x production. 

Tata acquisition

India’s Tata Chemical has agreed to buy US-based soda ash producer General Chemical Industrial Products for $1 billion. The deal will make Tata the world’s second largest producer of soda ash - used in glass making - behind Solvay of Belgium. 

Vioxx controversy continues

US drugmaker Merck is under federal grand jury investigation over possible off-label marketing of Vioxx - promoting it for uses not approved by drug regulators. Painkilling drug Vioxx was withdrawn in 2004 over safety concerns.