NEW5ÛFÏHEWEEK BUSINESS
ICI TO DIVEST FOOD INGREDIENTS Sale is second recent chemical company departure from sector
T
AKING ACTION AT ITS UN-
derperforming Quest International unit, I C I has agreed to sell Quest's food ingredients business to Kerry Group for $440 million. The food ingredients unit employs some 900 people and had $255 million in sales last year of products such as emulsifiers, proteins, hydrocolloids, yeast, enzymes, and cultures. Quest had overall sales last year of $1.1 billion, down 3 % compared with 2002. The food ingredients business has been suffering as well, with fourth-quarter
2003 sales down 4% compared with the same period in 2002. ICI says the planned divestiture follows a decision to focus efforts at Quest on restoring profitability in its core flavors and fragrances businesses. Once the food ingredients sale is complete, ICI says it will launch a $20 million restructuring at Quest in order to eliminate overhead. By cutting jobs and issuing new stock, ICI has managed to stabilize its finances over the past two years. As a result, at the firm's 2003 earnings press conference last month, CEO John McAdam
FINANCE
BIOTECH UPTICK MOVES INTO MARCH Three more firms line up for initial public offerings
F
EBRUARY WENT OUT LIKE A
lion in biotechnology as filings for initial public offerings (IPOs) by three companies capped a flurry of activity in the sector. Acadia Pharmaceuticals, Alnylam Pharmaceuticals, and Ark Therapeutics announced filings in the wake of strong openings on Wall Street last month for GTx, Renovis, Corgentech, and DynaVax Technologies. Acadia, a chemical-genomics specialist, filed with the Securities & Exchange Commission for an I P O valued at approximately $86.3 million. Alnylam, which is working to develop drugs based HTTP://WWW.CEN-ONLINE.ORG
on RNA interference, filed with SEC for an I P O also valued at $86.3 million. Ark's filing, to be listing on the London stock market, is the first significant biotech I P O in the U.K. in three years. Industry sources sayArk, which has a therapy for wound healing approved in the U.K. and three drug candidates in late-stage trials, may lead the kind ofresurgence in the U.K. that is already under way in the U.S. Ark's IPO is valued at about $67 million. Industry watchers noted a rebound in biotech investment last summer, and many predicted that
said the sale of entire businesses such as Quest was unlikely Instead, I C I is focusing on "bolt off" sales like the food ingredients transaction. For Ireland-based Kerry, the purchase will further expand a food ingredients business that has been growing steadily for the past three years with the help of numerous small acquisitions. Kerry CEO Hugh Friel notes that the Quest unit has a strong relationship with the pharmaceutical industry, supplying hydrolyzed proteins used in cell tissue culture and ingredients for pill tableting and therapeutic products. ICI's sale will mark the second recent exit from food ingredients by a specialty chemicals company Last month, Rhodia announced that it is negotiating to sell its $240 million-per-year food ingredients business to the Danish ingredients company Danisco (C&EN, Feb. 23, page 4).-MICHAEL MCCOY
a window for IPOs would open in the sector this year. Positive news on clinical trial results for potential biotech blockbusters, such as Genentech's colorectal cancer drug Avastin (bevacizumab), helped fuel renewed enthusiasm last year. FDA approved Avastin and ImClone's colorectal therapy Erbitux (cetuximab), last month. February's IPOs indicate that the stock market has an appetite for biotech, according to G. Steven Burrill, CEO oflife sciences merchant bank Burrill & Co. GTx, Renovis, Corgentech, and DynaVax Technologies hit the market netting $78 million, $66 million, $96 million, and $45 million, respectively Renovis, Corgentech, and DynaVax were all up 20% or more in their first day of trading and have since held their ground, according to Burrill.-RICK MULLIN
GOLDEN OPPORTUNITY Emerging drug companies seek an infusion of investment dollars.
C&EN
/ MARCH
8, 2 0 0 4
11
