Its been a busy week, with a slew of merger and acquisition activity in the instrumentation market, and to top it off our intrepid business editor has only just returned from climbing Kilimanjaro to find a pile of news bigger than Kili’s summit of 5895m sat atop his desk…
Eli Lilly shake up
5500 Eli Lilly employees are to be the latest casualties in the pharma sector as the US drugmaker announced major restructuring plans that will see nearly 14 per cent of its workforce axed. The company will be reorganised into five business units covering oncology, diabetes, emerging markets, established markets and animal health.
The revamp, designed to reduce costs by $1.1 billion (£670 million) by 2011, is in anticipation of the expiry of a series of patents covering the company’s products - beginning with the loss of protection for its blockbuster antipsychotic Zyprexa, in 2011.
‘These changes will challenge us and require new ways of thinking and acting,’ said John Lechleiter, Lilly’s chief executive. ‘Under this new operating model, Lilly has the opportunity not only to better navigate this uncertain, challenging time, but to emerge with renewed strength and focus.’
Elan’s J&J deal rejigged
Irish biopharma firm Elan Pharma has had to rejig its deal to sell a stake in the firm to Johnson & Johnson (J&J) after a US district court identified an ‘unintended breach of its Tsyabri agreement with Biodgen Idec’.
The original $1.5 billion deal would have landed J&J an 18.4 per cent stake in Elan, a majority position in its Alzheimer’s portfolio and an option to buy Biogen’s share of its Tsyabri collaboration. However, the option to buy into the Tsyabri collaboration was in breach of its earlier contract with Biogen, so Elan had to scrap that part of the deal - with J&J knocking $100 million off the price of the equity investment.
BMS gets out of Asia
Bristol-Myers Squibb (BMS) has shed another ‘non-core asset’ and sold off its Indonesian subsidiary and the rights to various over-the-counter (OTC) products in the Asia-Pacific region to Japan’s Taisho Pharmaceutical for $310 million.
This seventh divestiture by BMS appears out of kilter with the majority of pharmaceutical companies that are trying to increase their presence in the OTC and generics marketplaces as well as increasing their geographic reach.
According to Dieter Weinand, president, intercontinental, Bristol-Myers Squibb, ‘this planned divestiture is a part of Bristol-Myers Squibb’s strategic transformation into a more focused next-generation BioPharma company that develops and commercialises products that address serious unmet medical needs.’
‘The company is looking closely at its geographic and manufacturing footprint to align more closely to the scale and size of a BioPharma company.’
Bayer names Thermo’s Dekkers as next CEO
Breaking the tradition of promoting chief executives from within company ranks, Bayer has announced that Thermo Fisher Scientific’s Marijn Dekkers will take over from Werner Wenning as chief executive of Bayer as of October 2010. In the meantime, he will join the company as head of Bayer Healthcare.
Dekkers’s record as a dealmaker at Thermo Fisher Scientific has led many analysts to speculate that the move may herald the breakup of the German pharmaceutical and chemicals conglomerate to enable it to focus on developing medicines.
Marc Casper, Thermo’s chief operating officer, has been named as Dekkers’s replacement at the instrument and laboratory reagent company. Casper took over the reigns as chief operating officer in May 2008 and spoke to Chemistry Worldearlier this year.
World’s largest mass spec buisiness sold
Life Technologies and MDS have decided to sell their Applied Biosystems SCIEX mass spectrometry joint venture to Danaher Corporation for $1.1 billion. Under the agreement Danaher will purchase and combine both the commercial and marketing operations of the business, currently handled by Life Technologies, and the research, development and marketing functions which have been handled by MDS.
While Life Technologies is only selling off its share of the mass spectrometry business (for $450 million), MDS is selling its entire MDS Analytical Technologies business for $650 million. MDS has also announced its intention to sell off its MDS Pharma Services business to leave it focused solely on its medical isotope business MDS Nordion.
Dionex buys ESA Life Sciences’ HPLC assets
Chromatography expert Dionex has agreed to buy the the ESA Life Science tools business unit from Magellan Bioscience. The deal will add three HPLC detector families to Dionex’s HPLC offering, the Corona universal charged aerosol detector (CAD), as well as the CoulArray and Coulochem electrochemical detectors.
While financial details of the deal were not disclosed, Dionex is anticipating the transaction will generate additional revenue of $12 - $15 million a year.
PerkinElmer buys GE Healthcare’s catalogue radiochemicals
Following the sale of GE Healthcare’s custom radiolabelling services to Quotient Bioscience, the US industry giant has now agreed to sell its catalogue radiochemicals offering to PerkinElmer.
According to PerkinElmer, the deal will enable it to provide the largest selection of radiolabelled compounds to the global scientific community.
‘This asset purchase reinforces PerkinElmer’s continued position as the leading company in HTS radiochemicals and related instruments, as we remain committed to supporting critical radiochemicals-based research,’ said Richard Eglen, president of biodiscovery at PerkinElmer.
Corning buys Axygen BioScience
US glass expert Corning has bought Axygen BioScience for an undisclosed amount to bolster its presence in the laboratory equipment market. The deal will add a range of pipettes, pipette tips, high throughput screening products, centrifuges and incubators to Corning’s laboratory product offering.
‘Axygen’s product portfolio and established distribution network will significantly strengthen Corning’s life sciences platform and are critical components to our long-term growth strategy for this business,’ said Peter Volanakis, Corning’s chief operating officer. ‘We believe this highly strategic acquisition offers synergies that will allow us to grow our life sciences business to more than $500 million in revenue by 2011.’
CSB calls for better education
The US Chemical Safety Board (CSB) has called for chemical engineering curricula in the US to include reactive hazard recognition and management following its investigation into the December 2007 explosion at T2 Laboratories, in Jacksonville, US.
The CSB found that the explosion was caused by a runaway chemical reaction that ‘likely resulted from an inadequate reactor cooling system’. The investigators concluded that T2 did not recognise all of the hazards involved in making a gasoline additive. As the two owners of T2 had undergraduate degrees in chemistry and chemical engineering, the CSB called for ‘improving the education of chemical engineering students on reactive chemical hazards’.
Following the blast four T2 employees were killed and a further four injured, while 28 employees of nearby business were injured when building walls and windows blew in.
‘This is one of the largest reactive chemical accidents the CSB has investigated,” said CSB chairman John Bresland. ‘We hope our findings once again call attention to the need for companies to be aware of how to control reactive chemical hazards.’
LyondellBasell to offer stock to exit bankruptcy
LyondellBasell is planning to become a public company and float itself on the stock market in its bid to exit bankruptcy before the end of the year, according to documents filed with a US bankruptcy court. The company was forced to seek bankruptcy protection in January due to the credit crisis and the sharp downturn in demand for chemicals leaving the company unable to finance the debts incurred from its leveraged buyout of Lyondell chemical in 2007.
Sasol sees profits fall as sales rise
Despite seeing its turnover for the year increase 6 per cent to Rand137 billion (£11 billion) Sasol saw its operating profits fell 26 per cent to Rand24 billion.
‘Our deleveraged balance sheet and strong cash flows continue to serve the group well in weathering the storm and in funding our prioritised growth programme in tough credit markets,’ said Pat Davies, chief executive of Sasol. ‘The global economic recession created opportunities for us to examine all our operations.’
The company was hit with fines for anticompetitive behaviour of Rand3.9 billion, with Davies saying, ‘we have acted swiftly to improve competition law compliance and will have completed our comprehensive group-wide review by December 2009.’
Arkema to build CNT plant
Arkema is building a 400 tonne per year carbon nanotube (CNT) pilot production plant in Mont, France. The plant is scheduled to start up in 2011 and will be the only CNT plant to use an entirely biologically sourced raw material - bioethanol.
The plant will use a continuous catalytic chemical vapour deposition process to grow CNTs on iron particles that control the characteristics and growth of the CNTs.
GE blowing in the wind
GE has bought Norwegian off-shore wind-power expert ScanWind to boost its position in the wind-power arena. According to Victor Abate, vice president of Renewable Energy for GE Energy, ‘the acquisition of ScanWind is an important step in our strategy to place GE in a strong position in the growing offshore wind segment.’
Showa Shell spends big on solar
Japan’s Showa Shell is investing $1.1billion to build its third copper-indium-selenium (CIS) thin film photovoltaic cell plant which will boost its production capacity by a factor of ten to 1 gigawatt.
The company is predicting rapid growth in the market for solar cells due to subsidy programmes for residential photovoltaic systems in Japan and the Green New Deal Policy in the US.