Business Concentrates PETROCHEMICALS
AstraZeneca to spin off Shanghai R&D Move follows reduction in China research footprint by other big drug firms Joining other Western drug companies that are scaling back their research commitment in China, AstraZeneca says it will turn its R&D center in Shanghai into a joint venture with a Chinese investor. The new company, Dizal Pharmaceutical, will be a 50-50 venture with govern-
AstraZeneca’s R&D center in Shanghai, shown here, will be put into a joint venture. ment-backed SDIC Fund Management. Dizal will inherit AstraZeneca’s R&D assets in China, including three drugs in preclinical development and the firm’s Shanghai R&D center, in which it has invested tens of millions of dollars since 2006. Staffed with researchers now employed by AstraZeneca, the new firm will “accelerate the local discovery and development of innovative, affordable medicines for patients in China and around the world,” says AstraZeneca CEO Pascal Soriot. AstraZeneca’s move comes on the
heels of R&D downsizing decisions by other firms. In August, GlaxoSmithKline announced the end of its neuroscience research activities in China. Neuroscience was the main focus of GSK’s R&D center in Shanghai. Then in September, Eli Lilly & Co. said it would close its Shanghai R&D center. The company had opened the 150-scientist facility, focused on diabetes research, in 2012. Lilly said it was downsizing in China as part of a global cost-cutting program that is eliminating 3,500 jobs. Companies that reduce their research footprint in China do so because priorities or business reasons have changed, reckons Jianmin Fang, a professor of molecular medicine at Tongji University School of Life Science & Technology. But Fang also notes that conditions in China are now different than they were a few years ago when the companies invested. While costs have increased and China is no longer a cheap place for drug companies to conduct research, the quality of services provided by contract research and manufacturing firms has risen, he says. “You can now research, develop, and even conduct clinical trials of new drugs in China without an R&D center,” he says. Fang himself founded a contract manufacturer of cancer drugs, Mabplex, in northeast China. “The environment for research and innovation has actually improved in China,” he says.—
JEAN-FRANÇOIS TREMBLAY
OVERHEARD
“It is critical that our ambition covers the full energy life cycle from production to consumption. We are committed to play our part.’’ —Shell CEO Ben van Beurden, telling investors the company aims to cut the carbon footprint of its energy products in half by 2050 to align with the Paris Climate Agreement. Shell will spend up to $2 billion a year from 2018 to 2020 on wind, solar, and hydrogen power and charging stations for electric cars, he said.
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C&EN | CEN.ACS.ORG | DECEMBER 4, 2017
Saudis advance chemicals from oil In a move meant to diversify the Saudi economy beyond oil exports, SABIC and the Saudi national oil company Saudi Aramco are advancing plans for an oil-to-chemicals project in Saudi Arabia. Following a year-long study, the companies, two of the kingdom’s largest, will commence engineering and design of the multi-billion-dollar complex before they come to a final investment decision. Most of the world’s petrochemical complexes make chemicals such as ethylene and propylene in steam crackers that process naphtha, which is produced in oil refineries, or natural gas liquids. The complex SABIC and Aramco are planning would make 9 million metric tons of chemicals and base oils per year from 400,000 barrels per day of crude oil. Aramco and SABIC haven’t taken the wraps off their process or said what derivatives the plant would produce when it starts in 2025. Clyde Payn, CEO of the Catalyst Group, a technology consulting firm currently studying oil-to-chemicals processes, says the venture’s setup will likely begin with a hydrocracker that breaks down heavy oil into shorter-chain hydrocarbons. This stream is then fed into a fluidized catalytic cracker for conversion into olefins and other products. In contrast, ExxonMobil’s new oil-to-chemicals plant in Singapore is a modified steam cracker, Payn points out. It’s easy to see the appeal of making chemicals from oil, Payn says. The transportation fuel market is growing by only 2% annually, while the chemicals market is expanding by more than 5% per year. “Any integrated refiner and chemical producer should be seriously reevaluating where they want to be 10 years from now,” he says.—ALEX TULLO
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