- n e w s of t h e w e e k 1999 R&D budget up 1 % in real terms . . . $ Billions $ Current
$ Constant '
20
01
I
I
I
L_J
I
I
I
I
I
1989 90 91 92 93 94 95 96 97 98a 99a
. . . with defense hanging onto more than half
1999 R&D outlays = $73.7 billion Note: Excludes funding for R&D facilities, a Estimates. b Includes military-related R&D programs of the Departments of Defense and Energy. Source: Office of Management & Budget
will enrich federal coffers by $65.5 billion over the next five years. As House Appropriations Committee Chairman Bob Livingston (R-La.) put it: "The Presidents budget . . . has no basis in legislative reality. It relies on assumed funding sources such as the tobacco settlement and new user fees, which may never be enacted, to make its numbers work." Janice Long
Glaxo, SmithKline set to form world's largest drug firm British compatriot pharmaceutical companies Glaxo Wellcome and SmithKline Beecham have agreed to combine. The merger will create the world's largest drug producer with 1998 pharmaceutical sales forecast to reach roughly $22.7 bil6
FEBRUARY 9. 1998 C&EN
lion and total sales projected to be about $28 billion. In the surprise announcement issued just before midnight in London on Jan. 30, the companies said the proposed merger "represents a compelling strategic opportunity for both companies to enhance their industry position and to realize a meaningful increase in shareholder value." At the same time, SmithKline tersely announced that discussions involving a possible merger with American Home Products "have been terminated." Although such a megamerger clearly will be the target of thorough reviews by antimonopoly authorities in the U.S. and the European Union, it is expected to receive the go-ahead. The two companies point out that "a major and significant benefit" of the merger is formation of the largest research and development organization in the global health-care industry. By one estimate, the combined organization will have an R&D budget of more than $3 billion. That argument in favor of the merger doesn't impress Roger Lyons, general secretary of MSF Union, the U.K. union for skilled and professional people in the manufacturing, science, and finance sectors. Previous mergers in the pharmaceutical industry have resulted in job cuts amounting to about 10% of the workforce. If that pattern holds true for this merger, more than 10,000 jobs will be lost from the two giants' combined workforce of 110,000. Most of the cuts would occur at both companies' U.K. headquarters sites, and in the U.S., where both have R&D centers. Lyons is particularly concerned that there was no union consultation about the consequences of the merger, despite what he considers a clear requirement to do so under EU law. "I want to hear from the two companies how this proposed merger is to be to the benefit of the U.K. and European science base, business investment, and employment," Lyons said in a letter to Karel van Miert, the EU commissioner responsible for mergers and competition. "We are only too aware of the effect that the takeover of Wellcome by Glaxo has had on employment and science employment in particular." Lyons points out: "I challenged the logic behind the SmithKline Beecham and American Home Products merger talks. . . . Now thousands more British science-based jobs are at risk in two major and highly profitable companies. The two companies are not basket cases.
Merged Glaxo-SKB would dwarf rivals Forecast pharmaceutical sales, 1998 ($ billions)
Glaxo-SKB Merck Novartis Bristol-Myers Squibb Pfizer Roche American Home Products Johnson & Johnson Hoechst
$22.7a 16.0 13.4 12.2 10.7 10.6 10.6 8.9 8.2
a Glaxo Wellcome's contribution, $14.0 billion; SmithKline Beecham's, $8.7 billion. Source: NatWest Market
They don't need rescuing, and the case for a merger has not been made." The investment community, however, clearly thinks otherwise. The stock market in the U.K. opened with a whoosh on Monday morning, lifting whole sectors, including pharmaceuticals. Glaxo's stock moved up almost 20% to $32.50 per share while SmithKline's rose 8% to $1385. In fact, given the zoom in share price for both Glaxo Wellcome and SmithKline Beecham, the proposed new company has now moved into the global number two slot in terms of market capitalization—the number of shares issued times the market price per share. General Electric, at $228 billion, is the world's largest company in terms of market capitalization. The proposed new company would have a stock market value ranging from $194 billion to $204 billion, leaving Royal Dutch/Shell in third place at $176 billion. Patricia Layman
DNA a poor conductor, new study says A study that indicates DNA is a poor conductor casts more doubt on the theory that the biomolecule behaves like a molecular wire. In recent years, the issue of charge transfer through DNA's double helix has generated controversy among those who believe DNA acts as an insulator similar to proteins and those who believe electrons flow through the molecule relatively freely. The new study reports the determination of the elusive distance depen-
olis, who has modeled DNA electron transfer, also concludes that "the results significantly add to a growing body of ev idence against the existence of ultrafast long-range transfer in DNA." Researchers have been wrangling over electron transfer in DNA for years, but a definitive answer has been difficult to reach. The problem has been in devel oping methods of synthesizing DNA snippets with electron donors and ac ceptors tethered at precisely known lo cations on the double helix. As - ~ the synthesis of such systems be comes easier, values for β are be Attached dye replaces ing reported—but with little base pair in DNA helix agreement. Chemistry professor Jacque line K. Barton at California Insti tute of Technology, for instance, has conducted many DNA elec tron-transfer experiments using metallocomplex intercalators. Her lab has reported β values be tween 0.1 and 0.4, which would indicate fast-electron transfer with little dependence on distance. In contrast, Northwestern Uni versity chemistry professor Fred erick D. Lewis and colleagues used a stilbene-bridged DNA hair pin system to obtain a β value of 0.6—lower than most proteins, but higher than Barton's (C&EN, Aug. 4, 1997, page 29). I think they're all correct," Source: Angewandte Chemie Barton says. "What I think is re markable is that we've got β val was placed at varying distances from the ues all over the place." She believes a sec dye. Tanaka and Fukui irradiated the sys ond parameter may be at work, one that tems and measured the resulting fluores involves stacking of the DNA π orbitals. A cence spectra. They calculated the rates system whose bases are well stacked may of electron transfer from the fluores exhibit low β values, while values may be cence quantum yields, plotted them as a higher for systems with poorly stacked function of donor-acceptor distance, and bases, she says. obtained a relatively large β value of 1.4, Elizabeth Wilson comparable to that of proteins, which hover around 1.0 [Angew. Chem. Int. ^.,37,158(1998)]. "This signifies that DNA-base stacking does not form a special mediator for the fast electron transfer process," writes Tanaka. "It's very exciting," says University of Pittsburgh chemistry professor David An Environmental Protection Agency ad Beratan, whose theoretical studies pre visory committee last week proposed a dict that electron transfer in DNA should scheme for screening nearly all chemi be similar to electron transfer in pro cals in commerce—about 87,000 chemi teins. "In fact, their drop-off in current cals and mixtures—for effects on the en is embarrassingly close to what theory docrine system. predicts." The draft report, released at a public Paul F. Barbara, a chemistry professor meeting, reflects many areas of agreement at the University of Minnesota, Minneap reached since the committee first met in
dence of the rate of electron transfer (called β) through a specially modified DNA system designed by Kazuyoshi Tanaka and Keijiro Fukui of the department of molecular engineering at Kyoto Uni versity, Japan. The researchers inserted an electron acceptor—the fluorescing dye 9-amino-5chloro-2-methoxymeridine—into a spe cific site on a small piece of DNA. Gua nine, an easily oxidized purine base in DNA that serves as an electron donor,
Endocrine testing scheme proposed for most chemicals
December 1996. For instance, the panel— which has 40 members representing in dustry, academia, state and federal agen cies, and environmental groups—has decid ed to test chemicals for interference with three types of hormones—thyroid, estro gen, and androgen—in both humans and wildlife. Also, it has agreed that nearly all synthetic chemicals except drugs should be tested. And at the meeting last week, the com mittee decided on a testing regime for var ious types of chemicals. The regime— which has three basic parts—would sub ject each chemical to high-throughput prescreening (HTPS), an automated and relatively inexpensive screen that tests the ability of a chemical to attach to estrogen, androgen, or thyroid receptors. At the same time, the chemicals would be used in short-term assays on live animals, such asfish,frogs, and rats. If positive or equiv ocal results were obtained in any of these screens, then the chemical would under go more detailed tests, including a twoyear, two-generation study on live rodents. If one or more of the short-term assays and the two-year study found adverse effects, the chemical would be considered an en docrine disrupter and probably taken off the market. For testing purposes, chemicals are placed in five groups. In the first group are about 50 chemicals, such as DDT, whose hormonal effects are so well known that further testing is probably not needed. Six commonly encountered mixtures, such as the synthetic chemi cals usually found in breast milk, make up a second group. The third group is made up of about 30,000 polymers. Those polymers with a molecular weight greater than 1,000 would not be tested, because their large size makes them biologically unavailable. But all other polymers—and the mono mers, oligomers, and additives in the polymers—would be tested. Another 15,000 chemicals—most of which fall under the Toxic Substances Control Act—are found in the fourth group. Since there are little toxicological data for most of these, they would be subjected to the entire testing regime. The fifth group includes pesticides and other chemicals for which there al ready are quite a bit of data and that man ufacturers consider important to keep on the market. These would be subjected to HTPS and to the two-year bioassay. There was considerable discussion at the meeting about whether this last cate gory should have to go through the shortFEBRUARY 9, 1998 C&EN 7
