Business Concentrates BIOTECHNOLOGY
FINANCE
Japan pulls off another strong year Profits remained high at large chemical producers Although profits declined at a few major Japanese chemical companies, most posted healthy returns—and none recorded a loss in the fiscal year that ended March 31. Companies attributed their strong performance to favorable economic conditions in Western countries and Japan, continued weakness in the value of the yen, and
Japan’s results Although sales were generally stable or declined, profit mostly held steady or increased.
Asahi Kasei Hitachi JSR Kaneka Mitsubishi Mitsui Shin-Etsu Sumitomo Teijin Toray
Sales Earnings –2.3 –13.2 3.8 70.5 –4.3 –19.6 0.6 16.4 4.6 –23.7 –13.3 33.0 1.9 15.7 –11.6 58.1 0.6 nm 4.7 26.9
Note: Percent change over previous fiscal year. nm = not meaningful. Source: Companies
improved margins as raw material costs declined faster than the prices at which companies sell their products. Toray Industries posted a 27% surge in its earnings to $802 million on the back of a 5% sales increase to $18.7 billion. “While
the Chinese economy continued to slow down gradually and economies of other emerging countries showed signs of weakness, the U.S. economy maintained its recovery, and the European economy also picked up steadily,” the company stated. Toray’s operating income increased across all product lines and not just in the carbon fiber that it supplies to the major airplane manufacturers Boeing and Airbus. Shin-Etsu Chemical, the most profitable of the large Japanese chemical companies, boosted its net profit by 16% to $1.3 billion on sales that grew 1.9% to $11.1 billion. In polyvinyl chloride, both sales and operating income shrank as the U.S. PVC market contracted, Shin-Etsu said. But operating income in the company’s semiconductor silicon business surged 32%. Not all the major chemical producers had a good year. JSR, a producer of synthetic rubber and electronic materials, recorded a profit drop of 20% on sales that went down 4%. Consumer demand for tires and electronic displays fizzled during the fiscal year, the company said. JSR’s overall profit margin, however, remained a healthy 6%. Primarily because of an ongoing slowdown in the Chinese economy, several Japanese producers were guarded in their outlook for the current fiscal year. Mitsui Chemicals expects its operating profit to remain unchanged this year. Shin-Etsu didn’t issue a profit forecast because it considers economic conditions too uncertain.—JEAN-FRANÇOIS TREMBLAY
OVERHEARD
“Pfizer makes its products to enhance and save the lives of the patients we serve. Consistent with these values, Pfizer strongly objects to the use of its products as lethal injections for capital punishment.” On May 13, Pfizer said it will sell seven drugs—pancuronium bromide, potassium chloride, propofol, midazolam, hydromorphone, rocuronium bromide, and vecuronium bromide— only to customers using them as treatments. The move, similar to of other drugmakers, will make it more difficult for the 32 death penalty states to perform lethal injections.
Biogen commits to gene therapy Soon to split off its hemophilia drug business, Biogen is making gene therapy a big part of its new focus on neurological and ophthalmological diseases. The company will spend up to $2 billion to work on gene transfer and gene-editing methods with University of Pennsylvania professors James Wilson and Jean Bennett. Biogen also has licensed adeno-associated virus (AAV) gene delivery technology from Regenxbio, a sevenyear-old spin-off from Wilson’s lab. Biogen will pay Penn $20 million up front and commit $62.5 million over the next three to five years to fund seven preclinical R&D programs. The potential payout also includes up to $137.5 million in milestone payments per resulting product. In 2015, Biogen agreed to pay the Florida biotech firm AGTC $124 million up front and up to $1.1 billion in milestone payments for at least two gene-based ophthalmic therapies. And Biogen was among investors who recently put $43 million into Solid Biosciences’ Duchenne muscular dystrophy gene therapy program. After decades of work and several setbacks, only two gene therapies have been approved, both in Europe. Wilson, who directs Penn’s gene therapy program and orphan disease center, has been developing the use of AAV vectors to overcome past problems with delivery. Meanwhile Bennett, a founder of Spark Therapeutics, has advanced ophthalmic gene therapies. Beyond traditional approaches, Biogen and firms such as Sangamo BioSciences and Bluebird Bio are looking to combine gene therapy methods with new gene-editing techniques. Editas Medicine has one of the most advanced programs combining CRISPR gene editing and AAV vectors. It expects to begin clinical testing of a gene repair therapy for a rare eye disease in 2017.—ANN THAYER
MAY 23, 2016 | CEN.ACS.ORG | C&EN
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