Business Watch: Investor seeks Ashland sale; WuXi sues the Pentagon

The US and Iran have signed an agreement intended to reopen the Strait of Hormuz. That’s good news for firms dependent on oil, natural gas, fertilizers, and industrial chemicals that once flowed freely through the strait.

But many other deals between the US and Iran have fallen apart, and executives aren’t holding their breath this time. Rather, they will no doubt continue to expect the worst and to rely on workarounds to obtain the raw materials and other products they once obtained from the Persian Gulf.

The workarounds have been succeeding. As noted here last week, one of the largest chemical facilities shuttered by the closure, Formosa Petrochemical’s ethylene cracker in Taiwan, resumed full production earlier this month after it was able to procure enough of the raw material naphtha. Companies in Japan, once highly dependent on naphtha from the Persian Gulf, have largely kept up production throughout the war in Iran by finding other raw material sources.

Resourceful companies always seem to find a way. It remains to be seen if they go back to their old ways once traffic is moving through the strait again.

Questions? Comments? Tips? email me, C&EN business editor Michael McCoy, at [email protected].

Top stories from C&EN

Business in brief

Activist calls for Ashland sale, and Standard Industries is a potential buyer

The activist investor Ancora Holdings is pushing Ashland to put itself up for sale. Ashland was once a diversified chemical giant, but divestments—its chemical distribution and composites units in 2011 and 2019, respectively, and Valvoline lubricants in 2017—shrunk it into a relatively small specialty chemical maker. It had sales of $1.8 billion in its last fiscal year. In a statement, Ancora says Ashland’s “crown jewels” are its life sciences and personal care businesses, which generate nearly 80% of its profits. But the pairing of these units with Ashland’s other operations, such as the remaining commodity chemical business, drags down Ashland’s stock market value by more than 40%, Ancora says. Standard Industries, which bought W. R. Grace in 2021, revealed late last year that it has a nearly 10% stake in Ashland, and Ancora suggests that Grace could be a suitor. Standard also owns the building materials maker GAF, which was once a sister company to International Specialty Products (ISP). Ashland bought ISP in 2011. In response to Ancora’s campaign, Ashland says that its board “frequently evaluates Ashland’s strategy and value creation opportunities on an ongoing basis.”

—Alex Tullo

Twelve starts turning CO₂ into jet fuel in Washington

The sustainable aviation fuel (SAF) start-up Twelve has brought a plant on line in Washington State that can make 190,000 L per year of jet fuel from carbon dioxide. The plant already has a buyer for its product—Alaska Airlines, which says it will run domestic flights on the fuel. Twelve uses electrochemical cells to produce hydrogen and reduce CO₂ to carbon monoxide, then combines the two gases in a Fischer-Tropsch reactor to make hydrocarbons. The firm says its product has one-tenth the full-life-cycle CO₂ emissions of petroleum-based fuel. In addition to jet fuel, the process yields naphtha suitable for making polymers and other chemical products. Twelve aims to expand the Washington plant and build other units in places, such as Singapore and Europe, with strong and growing SAF mandates. Separately, SAF competitor AirCo announced in May that it will move to a scale-up site in New Britain, Pennsylvania, from its current location in Brooklyn, New York. AirCo is focusing on self-contained air-to-fuel systems for the US military.

—Craig Bettenhausen

Mitsui Chemicals will buy dental materials maker Ultradent

Mitsui Chemicals has agreed to acquire US-based Ultradent Products for $900 million. Ultradent makes teeth-whitening and restorative materials and had sales of $372 million last year. Mitsui says its 2013 acquisition of Germany’s Kulzer Group gave it an appreciation of the dental market; the Ultradent purchase will now give it a foothold in the US. In addition, Mitsui says, Kulzer and Ultradent have complementary product portfolios.

—Alex Tullo

Direct lithium extraction advances in North America

Direct lithium extraction (DLE) projects, which extract lithium from brines using chemical or membrane technology, are making progress in the US and Canada. The South Korean firm Posco is moving ahead with plans for a demonstration-scale DLE plant at a Utah brine well owned by Anson Resources. The two companies have been discussing the project for nearly a year and hope to start operating by 2028. Posco already extracts lithium from brine at a site in Argentina and over the past year has been making deals to access other lithium sources in South America and Australia. In a similar deal, EnergyX says it hopes to build a DLE facility (PDF) at Compass Minerals’ inorganic chemical plant in Utah. In February 2024, Compass canceled plans to extract lithium at the site because of declining prices and increased regulations. Meanwhile, Prairie Lithium says it will use a sorbent from Aquatech for its DLE project in Saskatchewan. Aquatech has also been working with Intrepid Potash and Adionics to extract lithium from wastewater at Intrepid’s Utah potash facility.

—Matt Blois

Peak Energy and GM plan sodium-ion batteries

General Motors is partnering with the sodium-ion battery start-up Peak Energy for a venture into stationary energy storage. GM’s move follows a similar decision by Ford, announced in May, to convert an electric car battery plant into a factory for stationary storage batteries. The moves reflect slowing sales of electric cars and growing demand for stationary energy storage. Ford will be selling batteries based on lithium iron phosphate, the standard chemistry for such storage. But GM is betting on sodium-ion, a chemistry that has the potential to be cheaper than lithium batteries at large scale. GM will develop sodium-ion technology and retain manufacturing rights; Peak will incorporate the cell into its energy storage systems. GM has also partnered with Redwood Materials to repurpose electric car batteries for stationary storage.

—Matt Blois

Axplora to consolidate production of UDCA in India

The pharmaceutical chemical maker Axplora says it will consolidate production of ursodeoxycholic acid (UDCA) at its site in Vizag, India, by the end of the year. It will stop producing UDCA in Gropello Cairoli, Italy, and focus that site on making steroids and other highly potent active pharmaceutical ingredients. Last year, Axplora announced a $7.5 million investment in the Vizag site to expand capacity. UDCA is a bile-derived chemical used to treat chronic liver and gallbladder diseases. The company says it uses an enzymatic method to convert bile precursors into UDCA with fewer steps and less solvent than the conventional process.

—Michael McCoy

Quote of the week

Contract research firm Pelago to acquire RG Discovery

The pharmaceutical contract research organization (CRO) Pelago Bioscience has acquired a fellow Swedish CRO, RG Discovery, for an undisclosed sum. Pelago specializes in cell-based target engagement and validation assays. RG was founded in 2011 by former AstraZeneca scientists to offer medicinal chemistry and custom synthesis to drug industry customers. It employs about 40 scientists. Pelago CEO Michael Dabrowski says in a press release that acquiring RG will provide customers “seamless integration between chemistry and biology” and avoid handoffs between vendors that can slow drug discovery programs.

—Michael McCoy

WuXi AppTec sues the Department of Defense

The drug services firm WuXi AppTec has sued the US Department of Defense (DOD) after being added to a list, called 1260H, of companies the Pentagon says are affiliated with the Chinese government. The agency refers to these firms as Chinese military companies, or CMCs. WuXi AppTec’s inclusion on the list subjects it to the Biosecure Act, which prevents the use of US federal funds to pay certain Chinese companies. WuXi AppTec filed the complaint in the US District Court for the District of Columbia on June 11. “We strongly believe that the DoD’s decision to include WuXi AppTec as a CMC under Section 1260H is erroneous and unsupported by the facts or the legal criteria under the applicable statutes and case law,” the company says in a note to investors filed via the Hong Kong Stock Exchange.

—Aayushi Pratap

Neion Bio raises $23 million for chicken egg biotech

Neion Bio has raised $23 million in an oversubscribed series A funding round led by Caffeinated Capital. Neion, which emerged from stealth in March, genetically engineers chickens to make eggs packed with recombinant proteins. Its initial focus is complex, glycosylated sequences useful for medicines and specialty reagents. The firm says its technology affects protein expression only in the eggs, not the rest of the animal. Some vaccines are grown in chicken eggs, but cell culture methods based on hamster ovary cells in large bioreactors have largely taken over pharma biotech in recent decades. Neion says its approach will beat conventional methods on cost, speed, and environmental footprint. The firm says it is working on monoclonal antibodies with an unnamed drug company in a deal that provides it with operating income and long-term profit sharing.

—Craig Bettenhausen

Novartis deepens partnership with Orionis for molecular glues

Novartis has expanded its collaboration with Orionis Biosciences to discover and develop small-molecule molecular glues. The partners will use Orionis’s Allo-Glue platform and its glue discovery engine to pursue undisclosed therapeutic targets. In return, Novartis will pay the Belgian firm $40 million up front and up to $1.4 billion in milestones, plus possible royalties. Orionis launched in 2020 with a 4-year deal with Novartis that included an undisclosed amount of investment and funding.

—Sarah Braner

Bayer, J&J venture arms back ultrasound-delivered genetic medicines start-up

SonoThera, a San Francisco biotechnology firm using ultrasound technology to deliver DNA, RNA, gene editors, and antisense oligonucleotides, has raised $125 million in a series B financing. Vida Ventures led the round, which included backing from the venture arms of pharmaceutical giants Bayer and Johnson & Johnson. SonoThera says it will use the funds to begin its first clinical trial next year of a genetic medicine for Duchenne muscular dystrophy. Other targets include skeletal muscle and organs such as the heart, kidney, and brain.

—Rowan Walrath

Mayo Clinic licenses cancer vaccine to biotech CellxLife

The Los Angeles biotech company CellxLife has purchased the rights to a dendritic cell cancer vaccine from Mayo Clinic. The Minnesota research hospital developed the vaccine to target folate receptor α, which is overexpressed by ovarian tumor cells, and to stimulate T cells to precisely fight the cancer. The vaccine is already in two Phase 2 studies for ovarian cancer. CellxLife is planning a basket trial that will include glioblastoma, lung, pancreatic, colorectal, and cervical cancers. The company declines to disclose the financial terms of the licensing agreement.

—Rowan Walrath

What we’re reading