BUSINESS CONCENTRATES
WESTLAKE CARVES OUT ETHYLENE OPERATIONS
CHEMICAL DEALS SEEN RISING
Westlake Chemical is carving out its ethylene operations as a tax-advantaged master limited partnership, or MLP. The new company, to be called Westlake Chemical Partners (WCP), has filed a prospectus with the Securities & Exchange Commission for an initial public offering of equity worth $272 million. WCP will control Westlake’s ethylene crackers in Lake Charles, La., and Calvert City, Ky., as well as a pipeline between Mont Belvieu and Longview, Texas. It will supply ethylene to Westlake’s polyvinyl chloride and polyethylene operations under contract. WCP would have had $1.2 billion in sales last year. The new firm says it will seek to acquire ethylene-related assets. Jefferies stock analyst Laurence Alexander says Westlake’s move could inspire other chemical firms to consider MLPs for some of their assets.—AHT
The total value of chemical mergers and acquisitions in the first quarter surpassed that of the first quarter of 2013, and activity for the year as a whole is likely to exceed that of last year, according to a report by the consulting firm PricewaterhouseCoopers. The first quarter brought 29 deals with disclosed values greater than $50 million, compared with 24 in 2013’s first quarter. Total deal value of $12.1 billion soared from $5.4 billion in the previous year’s quarter. Five deals worth more than $1 billion were reported; the largest was Ashland’s agreement to sell its water technologies business to private investment firm Clayton, Dubilier & Rice for $1.8 billion. Overall, financial acquirers took a much larger stake, with 21% of deals, up from 13.5% for 2013 as a whole. They represented 40% of deal value in the quarter, driven by economic growth in developed countries and “an improved business climate for chemical producers,” says PwC’s Antoine Westerman. Whereas North America led the globe in the value of chemical businesses sold, China had a slight edge in deal volume.—MMB
VERDEZYNE RAISES FUNDS FROM MALAYSIA
VERDEZY NE
Industrial biotech firm Verdezyne will receive $48 million from investors led by Malaysian conglomerate Sime Darby Berhad.
SOLVAY AND INVISTA BURY THE HATCHET Solvay and Invista have settled a longsimmering dispute over ownership of technology used to make a nylon 6,6 feedstock at their Butachimie joint venture in France. The two firms have been fighting since 2008 when Invista alleged that Solvay stole its Gen 1 butadiene-to-adiponitrile process in order to build an adiponitrile plant in Asia. Both parties now agree that Invista owns the technology. Invista has given Solvay an option to reserve capacity in an adiponitrile plant Invista plans to build in China.—MSR
TESLA CAR BUOYS SUMITOMO SEPARATORS
President BP and DSM are also Barack Obama among the investors. and Malaysian Verdezyne engineers Prime Minister yeast to produce bioDato’ Sri Najib based chemicals. At a Razak watched a press event in Malaycontract signing by executives sia, CEO E. William Radany told reporters from Verdezyne and Sime Darby that the company has in Kuala Lumpur. chosen Malaysia to build a plant to make the nylon intermediate dodecanedioic acid out of a palm oil by-product. He said the facility will produce 30 million lb per year, about 30% of current world demand.—MMB
Sumitomo Chemical will more than double its capacity for lithium-ion battery separators in Japan. The firm notes that sales of the material have benefited from the success in North America and Europe of Tesla Motors’ Model S electric car. The car uses Panasonic batteries that are made with Sumitomo separators. The separators, in turn, are fabricated out of aramid fiber and ceramic on a polyolefin substrate.—JFT
HEDGE FUND LOSES BATTLE FOR SENSIENT Activist hedge fund FrontFour Capital lost its battle to place four of its nominees on Sensient Technologies’ nine-member board. Shareholders instead elected all the CEN.ACS.ORG
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nominees proposed by the flavors and fragrances firm. FrontFour says it still holds the board responsible for “substantial financial underperformance” at Sensient and that it should undertake “a more robust cost reduction plan” than the one adopted in March to save $25 million annually. Last year, FrontFour succeeded in placing two of its nominees on the board of specialty chemical maker Ferro.—MSR
EC PUTS CONDITION ON DUPONT-KURARAY DEAL The European Commission has approved Kuraray’s acquisition of DuPont’s glasslaminating films business on the condition that the Japanese firm sells DuPont’s polyvinyl butyral (PVB) film facility in Uentrop, Germany. PVB film is used as an interlayer in safety glass. Without the sale of the plant, the commission says, Kuraray and Eastman Chemical would be the only firms selling PVB film in Europe. Kuraray agreed to acquire the business last fall for $543 million. The business has about 600 employees and annual sales of more than $500 million.—AS
ALGAL SCIENTIFIC RAISES $3 MILLION Biotech start-up Algal Scientific has raised $3 million in a financing round led by Evonik Ventures, Formation8 Partners, and Independence Equity. The firm says the funds will allow it to begin commercial-scale pro-
ALGAL
BUSINESS CONCENTRATES
investors”—investors interested in social benefit alongside a financial return. The founders say the fund is the first to specifically target a rare disease.—LJ
BASF CUTS 260 JOBS IN NUTRITION UNIT A technician at work in Algal’s Northville, Mich., facility.
duction of its algae-derived β-1,3 glucan for use in animal feed, aquaculture, and human nutrition. The polysaccharide, normally made from yeast, is said to have immunesystem-supporting benefits. The algae-derived version can be produced at lower cost and is of higher quality, Algal says.—MMB
ALS INVESTMENT FUND IS LAUNCHED Three European entrepreneurs, all recently diagnosed with the rare and fatal neurodegenerative disease amyotrophic lateral sclerosis (ALS), have launched an investment fund to find a cure for their disease. The group has already initiated the world’s largest genetic research study related to the disease and now has turned its attention to translating disparate academic research into treatments. The entrepreneurs’ goal is to raise $140 million from “impact
BUSINESS ROUNDUP SICHUAN TIANQI Lithium Industries has agreed to acquire a lithium carbonate plant in Jiangsu, China, from Australia’s Galaxy Resources in a deal valued at $230 million. Last year Chinabased Tianqi acquired the Australian firm Talison Lithium for more than $800 million. HONEYWELL is installing a new line at its Chesterfield, Va., site that will have 40,000 metric tons per year of nylon 6 and
BASF plans to cut 260 staffers in production, marketing, and administrative roles as part of a restructuring within the performance products segment of its nutrition and health division. The job cuts are due to be made by the end of 2015. The restructuring also will involve an adjustment to the business’s product portfolio and the introduction of a team tasked with speeding up the development and market launch of new products.—AS
BMS ADDS TAU ANTIBODY WITH IPIERIAN DEAL Bristol-Myers Squibb has paid $175 million in cash, with the promise of up to $550 million in milestones, to acquire privately held iPierian. With the deal, BMS gains the rights to IPN007, an antibody aimed at progressive supranuclear palsy (PSP) and other neurodegenerative diseases associated with the buildup of tau, a protein believed to help regulate the activity of brain cells. IPN007 is expected to enter Phase I studies in early 2015 as a treatment for PSP, but it has the potential to be useful in treating Alzheimer’s disease.—LJ
nylon 6/6,6 copolymer capacity. When the new plant opens in 2015, the company’s total nylon capacity at the site will be 200,000 metric tons. CELANESE will expand the plastics compounding capabilities of its facility in Nanjing, China, by adding polyphenylene sulfide compounding machinery by the end of the year. Celanese manufactures PPS resin in Wilmington, N.C., through a joint venture with Japan’s Kureha. AMBRI has raised $35 million in a third round
of equity financing. The Cambridge, Mass.-based firm is developing an electricity storage battery based on three self-separating liquid layers—two metals and a salt. The technology was invented in the lab of MIT professor Donald R. Sadoway. LUPIN of India and Yoshindo of Japan, both generic drug producers, have agreed to form a joint venture that will market Lupin-produced generic biopharmaceuticals in Japan. Unlike most countries, Japan has clear regulations governing bio-
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FOREST LABS WILL ACQUIRE FURIEX Forest Laboratories will pay up to $1.5 billion to purchase Furiex Pharmaceuticals of Morrisville, N.C. Furiex expects to apply soon for FDA approval for its lead product, eluxadoline, a treatment for irritable bowel syndrome. Forest has agreed to sell Furiex’s royalties on two other drugs to Royalty Pharma for $415 million, provided the deal goes through. Forest expanded its gastroenterology business earlier this year by acquiring the specialty pharma firm Aptalis for $2.9 billion. Meanwhile, the generic drug maker Actavis is in the process of acquiring Forest for $25 billion.—AMT
MICHIGAN SPIN-OFF SIGNS WITH MEDIVATION OncoFusion Therapeutics, an oncology drug company formed in 2012 by two University of Michigan professors, has signed a licensing agreement with the San Francisco-based biotech firm Medivation. The deal gives Medivation rights to develop and commercialize compounds discovered by OncoFusion that target bromodomain and extraterminal proteins, which regulate genes and play a role in cancer. Medivation is involved in a lawsuit with professors from the University of California, Los Angeles, over a similar compound licensing agreement (C&EN, April 21, page 8).—MM
similar drugs, the Indian firm notes. MEDA, a Swedish maker of specialty drugs, has rejected a second takeover offer by Mylan, the largest U.S. generic drug company. Meda says its board has concluded that Meda has potential as a standalone company. MERCK & CO. has teamed with the Lexington, Mass.-based biotech firm Agenus to develop therapeutic antibodies to immune checkpoint inhibitors for the treatment of cancer. Agenus is tasked
with discovering antibodies against two Merck checkpoint targets. It could gain up to $100 million in milestone payments as the projects progress. MORPHOSYS has formed a partnership with the Moulder Center for Drug Discovery Research at Temple University. Under the pact, Moulder will get access to MorphoSys’s Ylanthia technology for validating drug targets and generating therapeutic antibodies. MorphoSys will have an exclusive option to develop any resulting drug candidates.
