regulatory reform bill put off indefinitely

2
seem to have a classical electronic dis- tribution, he says. Rather, the electrons are delocalized over the dioxygen and two copper units. "I must say it is not a result I would have anticipated. If it turns out this peculiar electronic struc- ture occurs in other binuclear bridged systems, it will be very interesting," Holm comments. "I'm fascinated by the idea that sol- vent changes can break or form [the ox- ygen bonds]," adds Edward I. Solo- mon, a chemistry professor at Stanford University who studies tyrosinase, a binuclear copper enzyme. "I don't think it's understood how that works yet," he says, but chemists will no doubt soon be pursuing answers to those questions. "It's a step that must be happening in a number of different areas," notes Joan S. Valentine, a professor of chem- istry and biochemistry at the Universi- ty of California, Los Angeles. "As we understand more about it, we'll under- stand more about some very important enzymatic steps in oxygen activation with metalloenzymes, so it provides a system you can actually study." Elizabeth Wilson and Rudy Baum Ciba, Sandoz merge to form giant Novartis Consolidation of the global pharma- ceutical industry continued last week with announcement of one of the larg- est mergers in corporate history. Swiss drug finns Ciba-Geigy and Sandoz will form a new company, Novartis, that they say will be the second largest drugmaker in the world. It will have 4.4% of the global market, behind only Glaxo-Wellcome's 4.7%. The merger of Ciba and Sandoz, which had combined sales of nearly $30 billion last year, will become effective upon sharehold- er approval. 1995 was healthy for Sandoz, Ciba Sandoz Ciba $ Million 1995 results % change from 1994 1995 results Sales $12,705 - 4 % $17,252 -3% Operating profits 2,258 11 2,539 12 Net profits 8 1,717 19 1,797 13 a After taxes and unusual items. Ciba will spin off within 12 months its specialty chemicals division, which will become a separate publicly traded com- pany. Sandoz—which spun off its spe- cialty chemicals business last year to form Clariant—will also sell or spin off its construction chemicals operation. To- gether, the operations to be spun off had sales of $8.34 billion last year. After the demergers, Novartis' business mix will be health care, 59%; agribusiness, 27%; and nutrition, 14%. Ciba Chairman Alex Krauer will be chairman of Novartis. Daniel Vasella, chief executive officer of Sandoz Pharma, Sandoz's pharmaceuticals division, will be Novartis president and head its executive committee. There will be 16 directors on the board, eight from each partner. The headquarters will be in Basel, the base for both Ciba and Sandoz. In the pharmaceuticals field, Novar- tis will focus on several areas: immu- nology/inflammatory diseases; disor- ders of the central nervous system; car- diovascular, endocrine, and metabolic diseases; and oncology, asthma, and dermatology. The company will also maintain its markets in vision care— with contact lenses, lens care products, and ophthalmic products—and in a va- riety of over-the-counter products. Novartis also will continue research in gene-, cell-, and organ-based thera- pies. Included is work on gene map- ping and sequencing in more than a dozen collaborations with research in- stitutions, such as the Stanford Human Genome Center—to which Sandoz last week contributed $1 million—the Max Planck Institute, and the Johns Hop- kins Consortium. The two firms also complement each other in nutrition products, including health foods, medical nutritionals, and the Gerber line of foods, which Sandoz acquired in August 1994. And in agri- business, Novartis will play a major global role in agrochemicals for weed, disease, and insect control; in seeds; and in animal health. According to the merg- er announcement, "Rapid integration and comple- mentarity of the business areas will realize estimat- ed synergies of [$1.5 bil- lion] over three years," with half the savings com- ing in the first 18 months. Some of the savings will come in worldwide job re- % change from 1994 ductions, although their extent is not yet clear. The partners say the deal is structured as a merger of equals based on an ex- change of shares. Sandoz shareholders will get 55% of the shares and Ciba shareholders will get the remaining 45%. Sandoz shareholders will receive one Novartis share for each Sandoz share. Ciba shareholders will receive Wis No- vartis shares for each Ciba share. Patricia Layman Regulatory reform bill put off indefinitely A regulatory reform bill, scheduled to be brought to the House floor for a vote on March 5, was dropped from the sched- ule at the last minute. Its abrupt with- drawal dims the chances that Congress will pass this year any kind of major reg- ulatory reform legislation, as promised in the House Republican "Contract With America." The bill, H.R. 994, is generally sup- ported by industry and opposed by the Administration and most environmen- tal groups. It consists of three titles, or major sections. Title I would allow small businesses and local governments to legally chal- lenge federal agency assessments of the impact of proposed federal rules on the businesses and governments. Current law does not allow for such legal chal- lenges. Title III would give Congress the power to veto any major regulation issued after November 1994. However, most of the attention has fo- cused on the highly controversial Title Π. That section would require federal agen- cies to conduct periodic reviews of new and existing major rules to determine whether to amend, terminate, or contin- ue them. A major rule is defined as one having an annual impact on the econo- my of $100 million or more. Existing rules would be reviewed over a period of nine years; new rules would be re- viewed during seven years from their adoption. If a federal agency missed a review deadline, interested parties could seek a court-ordered deadline, and the rule could be suspended until that review was complete. Also, adversely affected persons could petition for review of mi- nor rules. If the petition were denied, the petitioner could sue the agency. MARCH 11,1996 C&EN 7

Upload: bette

Post on 07-Feb-2017

215 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Regulatory reform bill put off indefinitely

seem to have a classical electronic dis­tribution, he says. Rather, the electrons are delocalized over the dioxygen and two copper units. "I must say it is not a result I would have anticipated. If it turns out this peculiar electronic struc­ture occurs in other binuclear bridged systems, it will be very interesting," Holm comments.

"I'm fascinated by the idea that sol­vent changes can break or form [the ox­ygen bonds]," adds Edward I. Solo­mon, a chemistry professor at Stanford University who studies tyrosinase, a binuclear copper enzyme. "I don't think it's understood how that works yet," he says, but chemists will no doubt soon be pursuing answers to those questions.

"It's a step that must be happening in a number of different areas," notes Joan S. Valentine, a professor of chem­istry and biochemistry at the Universi­ty of California, Los Angeles. "As we understand more about it, we'll under­stand more about some very important enzymatic steps in oxygen activation with metalloenzymes, so it provides a system you can actually study."

Elizabeth Wilson and Rudy Baum

Ciba, Sandoz merge to form giant Novartis Consolidation of the global pharma­ceutical industry continued last week with announcement of one of the larg­est mergers in corporate history. Swiss drug finns Ciba-Geigy and Sandoz will form a new company, Novartis, that they say will be the second largest drugmaker in the world. It will have 4.4% of the global market, behind only Glaxo-Wellcome's 4.7%. The merger of Ciba and Sandoz, which had combined sales of nearly $30 billion last year, will become effective upon sharehold­er approval.

1995 was healthy for Sandoz, Ciba Sandoz Ciba

$ Million 1995

results % change from 1994

1995 results

Sales $12,705 -4% $17,252 -3% Operating profits 2,258 11 2,539 12 Net profits8 1,717 19 1,797 13

a After taxes and unusual items.

Ciba will spin off within 12 months its specialty chemicals division, which will become a separate publicly traded com­pany. Sandoz—which spun off its spe­cialty chemicals business last year to form Clariant—will also sell or spin off its construction chemicals operation. To­gether, the operations to be spun off had sales of $8.34 billion last year. After the demergers, Novartis' business mix will be health care, 59%; agribusiness, 27%; and nutrition, 14%.

Ciba Chairman Alex Krauer will be chairman of Novartis. Daniel Vasella, chief executive officer of Sandoz Pharma, Sandoz's pharmaceuticals division, will be Novartis president and head its executive committee. There will be 16 directors on the board, eight from each partner. The headquarters will be in Basel, the base for both Ciba and Sandoz.

In the pharmaceuticals field, Novar­tis will focus on several areas: immu­nology/inflammatory diseases; disor­ders of the central nervous system; car­diovascular, endocrine, and metabolic diseases; and oncology, asthma, and dermatology. The company will also maintain its markets in vision care— with contact lenses, lens care products, and ophthalmic products—and in a va­riety of over-the-counter products.

Novartis also will continue research in gene-, cell-, and organ-based thera­pies. Included is work on gene map­ping and sequencing in more than a dozen collaborations with research in­stitutions, such as the Stanford Human Genome Center—to which Sandoz last week contributed $1 million—the Max Planck Institute, and the Johns Hop­kins Consortium.

The two firms also complement each other in nutrition products, including health foods, medical nutritionals, and the Gerber line of foods, which Sandoz acquired in August 1994. And in agri­business, Novartis will play a major global role in agrochemicals for weed, disease, and insect control; in seeds;

and in animal health. According to the merg­

er announcement, "Rapid integration and comple­mentarity of the business areas will realize estimat­ed synergies of [$1.5 bil­lion] over three years," with half the savings com­ing in the first 18 months. Some of the savings will come in worldwide job re-

% change from 1994

ductions, although their extent is not yet clear.

The partners say the deal is structured as a merger of equals based on an ex­change of shares. Sandoz shareholders will get 55% of the shares and Ciba shareholders will get the remaining 45%. Sandoz shareholders will receive one Novartis share for each Sandoz share. Ciba shareholders will receive Wis No­vartis shares for each Ciba share.

Patricia Layman

Regulatory reform bill put off indefinitely A regulatory reform bill, scheduled to be brought to the House floor for a vote on March 5, was dropped from the sched­ule at the last minute. Its abrupt with­drawal dims the chances that Congress will pass this year any kind of major reg­ulatory reform legislation, as promised in the House Republican "Contract With America."

The bill, H.R. 994, is generally sup­ported by industry and opposed by the Administration and most environmen­tal groups. It consists of three titles, or major sections.

Title I would allow small businesses and local governments to legally chal­lenge federal agency assessments of the impact of proposed federal rules on the businesses and governments. Current law does not allow for such legal chal­lenges. Title III would give Congress the power to veto any major regulation issued after November 1994.

However, most of the attention has fo­cused on the highly controversial Title Π. That section would require federal agen­cies to conduct periodic reviews of new and existing major rules to determine whether to amend, terminate, or contin­ue them. A major rule is defined as one having an annual impact on the econo­my of $100 million or more. Existing rules would be reviewed over a period of nine years; new rules would be re­viewed during seven years from their adoption.

If a federal agency missed a review deadline, interested parties could seek a court-ordered deadline, and the rule could be suspended until that review was complete. Also, adversely affected persons could petition for review of mi­nor rules. If the petition were denied, the petitioner could sue the agency.

MARCH 11,1996 C&EN 7

Page 2: Regulatory reform bill put off indefinitely

NEWS OF THE WEEK

Two factions of House Republicans— one led by Sherwood L. Boehlert (R-N.Y.) and the other led by David Mcin­tosh (R-Ind.)—disagree sharply over Ti­tle II and are trying to negotiate a compromise on this section of the bill. At a March 5 meeting attended by House Speaker Newt Gingrich (R-Ga.), Boeh­lert, Mcintosh, and others, it was decid­ed that bringing the bill to the House floor in its current form would lead to bitter debate and possible defeat. Boeh­lert says the bill as currently written would perpetuate the GOP's bad envi­ronmental image. At press time, no date had been set to return the bill to the House for a vote, but efforts were being made to revive it.

The Chemical Manufacturers Associ­ation strongly endorses the bill. In crafting the bill, a House subcommittee worked closely with CMA and made many "accommodations" to the associ­ation, a Mcintosh aide tells C&EN.

A CMA spokesman calls the bill a good first step, a "down payment" on regulatory reform. "While this bill wouldn't hurt anything," he continues, "certainly it's not the comprehensive reform everyone agrees has to take place eventually—everything from a greater reliance on cost-benefit analysis to policies encouraging more voluntary initiatives."

However, Monsanto has broken ranks with CMA to oppose the House bill. In a March 5 letter to Boehlert, Monsanto says the bill will "weaken the system. Many of the requirements found in Title II will not yield better, more flexible approaches to protecting public health and the environment. They will place upon [the Environmen­tal Protection Agency] a considerable amount of paperwork." And the letter stresses that "We need our products evaluated and reviewed by a system the public can trust."

EPA Administrator Carol M. Browner agrees with Monsanto. "Under this bill, EPA could be forced to reopen every en­vironmental rule on the books, unneces­sarily subjecting rules to a resource-intensive process of review"—which, at EPA alone, could cost taxpayers $1 bil­lion a year, Browner says. 'If the agency did not complete the reviews on sched­ule, special interests could take vital public health protections to court and have them suspended."

The next concrete step in regulatory reform is expected in the Senate, where

Christopher Bond (R-Mo.) has intro­duced a bill that would set up boards to review the effects of regulations on small businesses. The boards would have some power to block implementa­tion of rules.

Environmental groups see little good in either the Senate or the House bill.

"What they really serve as is just obsta­cles to keep the agencies from doing their job," says environmental analyst Jeffrey Thomas of OMB Watch, a Wash­ington, D.C.-based nonprofit group that follows federal budgetary and regulato­ry processes.

Bette Hileman

W.R. Grace spurns Hercules takeover bid Two executives publicly exchanged acerbic letters last week in what may be the opening volley of a takeover war for W.R. Grace.

Hercules Chairman Thomas L. Gos-sage—until last week a member of Grace's board of directors—had previous­ly approached Grace Chairman Albert J. Costello about a Hercules bid for Grace. Costello rejected the advance. In a letter, he charged that Gossage was promoting Hercules shareholders' interests at the ex­pense of Grace stock owners. Financial de­tails, if they were dis­cussed, have not been disclosed.

Wall Street ana­lysts now expect a formal offer from Hercules, which has been seeking a sizable acquisition for some time. They speculate that other firms may also bid for Grace. On March 5, the day after disclosure of the executives' letters, Grace shares closed up $9 at $775/& on the New York Stock Exchange.

In 1995, Grace had sales of $3.7 billion from chemicals and $2.1 billion from its National Medical Care (NMC) unit, which is being acquired by Fresenius, a German medical products firm (C&EN, Feb. 12, page 8). Hercules had sales of $2.4 billion.

The acquisition talk comes after a tu­multuous year for Grace. The company had begun to steady itself following the death of longtime Chairman J. Peter Grace last April, the resignation of President J. P. Bolduc the same month, a federal probe into NMC's kidney di­alysis unit (also the target of a bid from

a Grace board member last May), and an unsolicited bid for NMC from Bax­ter International in late January.

On March 4, Gossage wrote Costello a "Dear Al" letter resigning from Grace's board. Gossage noted that his merger of­fer was encouraged by "several large shareholders of Grace and Hercules." A Hercules spokeswoman declined to iden­tify those shareholders. But eight large in­stitutions collectively own 16% of Her­cules' shares and 31% of Grace's shares.

1 ι

Gossage: create substantial value for both companies

"Now that Grace is positioned to be­come a 'pure chemical company,' " Gos­sage wrote, "these shareholders believe that such a combination could create sub­stantial value for both of our companies." Costello's rejection "without a thorough analysis and discussion of the reasons which support my proposed combination is not, in my opinion, responsive to the best interests of [Grace's] shareholders."

In his "Dear Tom" reply, Costello ex­plained that "There will be a time when

8 MARCH 11,1996 C&EN