MERGERS & ACQUISITIONS
Clariant and Huntsman nix $20 billion deal Activist shareholder keeps up pressure after scuttling the transaction The activist investor White Tale Holdings has pressured Clariant and Huntsman Corp. to drop plans to combine into the world’s second-largest specialty chemicals company with annual sales of some $13 billion. With that job complete, White Tale is now pushing Clariant to make more changes. Clariant and Huntsman announced the agreement in May. Valued at about $20 billion, the merger of equals was intended to create a larger firm better positioned to compete in specialty chemicals, expand profits, and reduce costs. The companies promised annual savings of $400 million. But White Tale contended that the deal undervalued Switzerland-based Clariant and was a “complete reversal of the company’s long-standing strategy to become a
pure-play specialty chemicals company.” Even though Huntsman had recently spun off its titanium dioxide pigments business, White Tale viewed the U.S. firm as less of a specialized chemical maker than Clariant. As it gradually increased its ownership stake in Clariant to a level that now exceeds 20%, White Tale was able to pressure the CEOs of the two firms to halt the transaction. The CEOs acknowledged that Clariant might not have been able to secure approval for the merger from two-thirds of its shareholders, as required under Swiss law. Following the breakup on Friday, Oct. 27, White Tale is now pushing Clariant to make further changes. “Unfortunately,” the firm writes in an open letter, “Clariant management’s comments since Friday betray a desire to go back in time and pre-
Clariant CEO Hariolf Kottmann (left) and Huntsman CEO Peter Huntsman shake hands on their deal in May. tend this episode did not occur.” White Tale says Clariant must hire an independent financial advisor to assess its options, including White Tale’s suggestion that the Swiss firm sell its plastics and coatings division to become a more pure specialty chemical company. White Tale also wants three representatives on Clariant’s board of directors. In a statement, Clariant says its managers have been talking with White Tale regarding “the new situation for the company and ways to work together in the future.”—MICHAEL MCCOY
START-UPS
Kymera tackles tough targets
C R E D I T: CL A R I A N T ( KOT TM A N N A N D HU N TS MA N ) ; KY ME RA ( I LLUST RAT I O N)
With $30 million in funding, the firm will focus on protein degradation Kymera Therapeutics has launched with $30 million in funding from Atlas Venture, Lilly Ventures, and Amgen Ventures. The firm intends to develop bifunctional small molecules that can tackle disease-causing proteins that have long stymied drug developers. Kymera is the latest biotech company working on targeted protein degradation, a way of tagging troublesome proteins for the cellular trash bin. Traditionally, small-molecule drugs work by blocking the activity of errant proteins. But that approach has limited drug developers to a small fraction of the thousands of proteins made by humans. Kymera and other protein degradation firms want to use small molecules to coax the body into getting rid of troublesome proteins altogether—a strategy more often associated with RNA-based drugs. To do that, they are taking advantage of the body’s own protein disposal system.
When a protein’s time has come, it is tagged with ubiquitin so that it is recognized by the Proteasome proteasome—the trash compactor of the cell—for removal. Kymera is designing small molecules that feature a protein-binding domain linked to a ubiquitin ligase-binding domain. Forcing the protein and ligase to nestle together causes the protein to be tagged for breakdown. The drug is then released to repeat the process. Several well-funded biotech firms have emerged to exploit targeted protein degradation, including Arvinas, founded by Yale University chemist Craig Crews, and C4 Therapeutics, spun out of Dana-Farber Cancer Institute. Most drug discovery efforts have relied on E3 ubiquitin ligases identified by Crews and the Dana-Farber team. “These two are the front runner ligases for various reasons, so the challenge in the field is, ‘Can we now expand this to other ligases?’”
Target protein
E3
E2 Ub Ub Ub Ub Kymera’s small Ub molecules bind to both proteins and the ubiquitin E3 ligase, allowing them to be tagged for disposal by the proteosome. says University of Dundee chemist Alessio Ciulli, whose lab is working on protein degradation with Boehringer Ingelheim. While Kymera isn’t dismissing the existing ligase toolbox, “we are going beyond those that are out there,” says its co-founder and chief technology officer, Nello Mainolfi. The biotech firm further distinguishes itself by using informatics to find the right protein target-ligase pairs and strong medicinal chemistry skills to design molecules, Mainolfi says. Kymera will focus on immunooncology, autoimmune diseases, and fibrosis.—LISA JARVIS NOVEMBER 6, 2017 | CEN.ACS.ORG | C&EN
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