Production of polypropylene resin will begin early in January 2000 at ARCO POLYPROPYLENE, LLC's state-of-the-art, 220,000-ton-a-year facility in Carson, California. ITOCHU CORP. (one-third) and ATLANTIC RICHFIELD CO.'s ARCO PRODUCTS CO. affiliate (two-thirds) announced the joint venture in September 1998. The $200 million factory is located next to an ARCO refinery that will provide all of the required feedstocks. In anticipation of the start of production, Itochu, the world's largest polypropylene marketer, formed CIPLAS AMERICA, INC. in Long Beach, California. This company will handle international sales, particularly in Asia, as well as marketing in the United States outside of the West Coast. That region will be covered by ARCO Products.
Cutting its losses, surfactant manufacturer NICCA CHEMICAL CO., LTD. ended production of specialty chemical products at its Fountain Inn, South Carolina subsidiary. The plant will continue its profitable specialty textile chemicals business, its initial focus on start- up in 1990. A major source of the favorable results in that area is an agent that repels soil on nylon fabric. In 1996, NICCA U.S.A., INC. diversified, opening a factory to make biphenol-S, which is used in developers for chemicals and papers. That was a bad move, the Fukui prefecture company now acknowledges. Nicca U.S.A.'s sales in 1999 are projected to fall about 10 percent short of the $18.1 million generated in 1998.
Interested in expanding its already significant agrichemicals division, particularly the range of products it sells for organic farming, SUMITOMO CHEMICAL CO., LTD. agreed to buy the agricultural products business of ABBOTT LABORATORIES. The deal includes research and development, sales, marketing and support operations for Abbott's naturally occurring biopesticides, plant growth regulators and other products for agriculture, public health and forestry. Abbott, however, will retain manufacturing rights to the bulk active ingredients for these products. This part of the health-care company's business, which employs some 165 people, had sales of $103 million in 1998. The transaction is expected to close in January 2000. At that time, Sumitomo Chemical will establish VALENT BIOSCIENCES CORP. in Libertyville, Illinois to run the acquired business. This globally focused company will function as an independent subsidiary of VALENT U.S.A. CORP. of Walnut Creek, California, which distributes herbicides and other agrichemicals.
Even second-tier pharmaceutical manufacturers believe that they need a R&D presence in the United States to succeed internationally. The latest company to make this move is SUMITOMO PHARMACEUTICALS CO., LTD. (see Japan-U.S. Business Report No. 358, July 1999, p. 2). It formed a wholly owned subsidiary in Fort Lee, New Jersey to oversee clinical testing of commercially promising treatments by contract research organizations as well as to track developments in the American pharmaceutical industry and to explore tie-ups. SUMITOMO PHARMACEUTICALS AMERICA, LTD. will begin operations in March 2000 with a staff of six or seven people. At that time, Sumitomo Pharmaceuticals' liaison office in New York City will close. The Osaka company sees two products under development as candidates for U.S. clinical trials. One is droxidopa for Parkinson's disease; the other, SM-13496, is a schizophrenia treatment.
Fellow midsize drug company MITSUI PHARMACEUTICALS, INC. thinks that its MS- 275, a synthetic benzamide derivative, has sufficient potential as a chemotherapeutic treatment for cancers insensitive to traditional antitumor agents to launch clinical testing in the United States. The firm already has asked specialists at the National Institutes of Health to evaluate the studies completed to date on MS-275, which works by inhibiting histone deacetylase. If those results are verified, Mitsui Pharmaceuticals could contract with a CRO to begin clinical trials as early as 2000. The company recently pulled out of the pesticide business and ended production of bulk ingredients for drugs to concentrate its resources on the more promising field of drug discovery, development and commercialization.
Japan's second-largest pharmaceutical house, SANKYO CO., LTD., has not been shy about its intention to remain a player in the rapidly consolidating world drug industry. Soon after announcing that CS-866 (olmesartan medoxil), an oral antihypertensive angiotensin-II receptor, would be the first product for which it would file an independent new drug application with the Food and Drug Administration (see Japan-U.S. Business Report No. 362, November 1999, p. 2), Sankyo identified three other drugs as strong possibilities for U.S. clinical testing. One is CS-011, an oral antidiabetic agent for Type II, or adult-onset, diabetes. This second-generation glitazone is considered a follow-on to Rezulin (troglitazone), which already is on the American market. Phase I testing of CS-011 is scheduled to start shortly, with FDA marketing approval eyed for 2003. U.S. clinical trials of CS-780, an oral anti-anginal nitrate donor, also could begin in the next few months. The third prospect is CS-502. As with CS-780, Sankyo plans simultaneous development of this oral analgesic and anti-inflammatory COX-II inhibitor in the United States, Europe and Japan.
SANKYO CO., LTD. readily acknowledges that to achieve its goal of selling products commercialized in-house on its own in the United States, it must develop its marketing and distribution capabilities. That was a primary reason the company was interested in obtaining exclusive rights from GELTEX PHARMACEUTI-CALS, INC. to market the Waltham, Massachusetts firm's Cholestagel (colesevelam hydrochloride) in the United States. This drug, expected to receive FDA marketing approval in mid-2000, is a treatment for hypercholesterolemia, which is characterized by undesirably high blood cholesterol levels. Cholestagel will be marketed by SANKYO PARKE-DAVIS CO., a Parsippany, New Jersey joint venture with WARNER-LAMBERT CO. Sankyo will pay GelTex up-front licensing and option fees of $13 million, plus make a $20 million milestone payment once the FDA clears Cholestagel for sale. As part of the agreement, Japan's number-two pharmaceutical company also gains an option to global rights to GelTex's second- generation cholesterol-lowering product, GT102-270, which is in Phase II clinical trials. The exercise of that option will generate additional payments.
A February 1997 partnership between SANKYO CO., LTD. and OSI PHARMACEUTICALS, INC. of Uniondale, New York to discover and develop small molecule compounds to treat influenza has been renewed for two more years. Several active compounds have been identified in the program. They now will be the focus of research to develop drug candidates for clinical testing. Sankyo is covering all the R&D costs as well as making milestone payments. In return, it will have exclusive worldwide commercialization rights to all products resulting from the collaboration. .....Mean-while, a project that SANKYO CO., LTD. began in 1995 with the medical school at the University of Alabama in Birmingham to develop gene therapy-based drugs for collagen-induced arthritis will be extended through 2002 rather than end in 1999 as originally planned. Over the next three years, the pharmaceutical company will provide $5 million-plus in funding to the university to support the ongoing research.
Caspases a family of 11 structurally related human enzymes known to play specific roles in apoptosis or programmed cell death will be the focus of a collaboration between TAISHO PHARMACEUTICAL CO., LTD. and VERTEX PHARMACEUTICALS INC. Their goal is to discover, develop and commercialize caspase inhibitors for the treatment of cerebrovascular (stroke, for example), cardiovascular and neurodegenerative diseases. Cambridge, Massachusetts-headquar-tered Vertex already has developed considerable expertise around one inflammation target in the caspase gene family. This work will be leveraged to other caspase targets. Taisho Pharmaceutical will make a $4 million initial payment to its partner as well as provide research funding and milestone fees. It also will cover up to a third of the cost of developing compounds that emerge from the caspase research program. For this money, the company will have the option to obtain marketing rights to any products in Japan and certain other Asian markets.
Bolstering its efforts to discover novel lead compounds, OTSUKA PHARMACEUTICAL CO., LTD. contracted to use the lead discovery services of PHARMACOPEIA, INC. These services start with high-throughput screening of the Princeton, New Jersey firm's multimillion-compound internal sample collection against an unspecified Otsuka Pharmaceutical target. They also include assay development and assay validation. In addition to fees for these services, Pharma-copeia is entitled to payments for successful achievement of milestones and royalties on marketed products resulting from its work.
An exchange rate of ¥105=$1.00 was used in this report.aaaaa