News of the Week

Petition candidate for ACS Region V director Elizabeth Ann Nalley has been nomi­nated by petition as a candidate for director from Region V in the Ameri­can Chemical Society's national elec­tion this fall. Nalley is professor of chemistry at Cameron University in Lawton, Okla. She will face two other candidates for the director post— Clara D. Craver, a Glendale, Mo., con­sultant; and incumbent John G. Ver-kade, professor of chemistry at Iowa State University of Science & Tech­nology, Ames. Deadline for nomina­tions by petition was July 15.

However, NTSB's Alan M. Pollock says, focusing on the tankcar's design may be premature. "Until we can de­termine whether any railcar could have sustained this type of damage, we can't even bring into the equation how the railcars are built."

Reform will come very slowly, he warns, even if there should be a Congressional mandate. "Having the Department of Transportation classify chemicals including those harmful to the environment will take 10 years, not to mention deter­mining what do to in case of spills. We've already made plenty of rec­ommendations to DOT."

Meanwhile, Southern Pacific is heading the cleanup effort, which is now focusing on breaking up a metham-sodium conglomeration in Shasta Lake by aeration. Company spokesman Mike Furtney says the aeration process used to get rid of the chemical's two breakdown prod­ucts—hydrogen sulfide and methyl-isothiocyanate—was bringing down their levels "to the single digits of the parts per million scale."

The metham-sodium was made by Amvac Chemical Co. of Los Angeles. Amvac's chief executive officer, Her­bert Kraft, says that "this is really go­ing to affect the chemical industry," especially the transportation aspect. "Every time something like this hap­pens, everybody says, 'Maybe there's something else we ought to be do­ing' " to prevent such accidents.

Susan Ainsworth, Wil Lepkowski

Biotech firms Chiron and Cetus to merge Chiron Corp. and Cetus Corp. last week agreed to form a major bio­pharmaceutical company in the larg­est merger yet between two biotech­nology companies.

For $660 million in stock, profit­able Chiron will acquire all out­standing shares in struggling Cetus. Cetus will undergo restructuring to reduce its staff and focus on its on­cology business. Before the deal is final, Cetus must complete sale of its polymerase chain reaction (PCR) technology to Hoffmann-La Roche for $300 million cash and up to $30 million in royalties.

"The combination of Chiron and Cetus creates a powerful health care company with substantial technolo­gy, product diversity, and resources to capitalize on opportunities in four important markets: diagnostics, biopharmaceuticals with an empha­sis on cancer therapeutics, vaccines, and ophthalmics," says William J. Rutter, chairman of Chiron. The combined company will have 22 products in clinical trials and 16 products in earlier development.

"The sale of our PCR technology to Roche and the restructuring make Cetus a stronger company," says Ronald E. Cape, chairman and chief executive officer of Cetus. Staff will be reduced by 92 employees, in addi­tion to a loss of 125 with the sale of the PCR business, leaving a total of 650. The combined company will be called Chiron Corp., with cancer therapeutics marketed through a sub­sidiary still bearing the name Cetus. Chiron will employ about 1400 peo­ple, although further reductions of about 10% are expected. The merger, which gives Chiron access to Cetus' manufacturing facilities and sales force, is expected to be completed by the end of 1991, subject to approvals.

PCR, an important new technolo­gy, is among Cetus' major assets. Ce­tus licensed the rights to PCR diag­nostic applications to Roche in 1989, and they are thus unavailable to Chiron, which has a profitable diag­nostics business. Cetus had retained PCR research efforts in cancer, fo-rensics, and genetics—which Roche now will acquire. A joint venture, called Perkin-Elmer Cetus Instru­ments, which develops and com­mercializes PCR-related instru­ments, is to be dissolved. A new al­liance between Perkin-Elmer and Roche will be established.

The sale of Cetus is not unexpect­ed, but analysts express some sur­prise that another biotech firm is the purchaser, rather than a large phar­maceutical company. Although both companies are located in Emeryville, Calif., and are among the pioneer­ing companies in biotechnology, Ce­tus and Chiron have followed di­verse paths with differing results.

The 20-year-old Cetus has tried to develop its therapeutic products alone, without the aid of major cor­porations. It has limited overseas

sales and a joint venture for generic chemotherapeutic agents. However, Cetus has not won U.S. approval for any biopharmaceutical product. Its fortunes long have been tied to its first product, interleukin-2 (IL-2), which suffered a major setback be­fore a Food & Drug Administration Advisory Panel last year. Facing siz­able losses, the company cut staff and costs, and changed manage­ment. (Cetus and Chiron hope for FDA approval of IL-2 this year.)

In contrast, 10-year-old Chiron fo­cused on corporate partnerships, joint ventures, and niche businesses. After developing the first genetical­ly engineered vaccine for hepatitis B and discovering the hepatitis C vi­rus, it used its basic technology to develop a diagnostics joint venture with Ortho Diagnostics, a vaccine joint venture with Ciba-Geigy, and an ophthalmics subsidiary, while in­ternal R&D funding focused on in­fectious diseases. Chiron had 1990 revenues of about $79 million. It ex­pects to report a loss for 1992 as a re­sult of the merger, but to return to profitability in 1993.

A new office of the chairman will be established to include the top three Chiron officers, who are con­tinuing in their present roles, and Hollings C. Renton, president and chief operating officer of Cetus, who will oversee the cancer therapeutics area and serve on the company's board of directors. Cape, a cofound-er of Cetus, will sit on Chiron's board.

Ann Thayer

8 July 29, 1991 C&EN