Education

No smoke without fire for pharma mergers?

Chemistry World blog (RSC) - 29 April, 2014 - 11:54

It’s spring. It’s the end of the financial year for many companies. And it’s the time of year when a lot of them hold annual shareholders’ meetings, so there’s a certain temptation to make announcements that will excite shareholders (or maybe that’s just me being cynical). Some or all of those things may be contributing to the media and rumour mills working overtime about mergers and acquisitions in the pharmaceutical and chemical sectors.

Its a deal

— It seems to be open season for pharma deals, but how many of them will actually go through?

For the last few years, things have been rather quiet in terms of pharma megamergers – in which already large companies crash together in the hope of finding ‘efficiency savings’ and ‘synergies’. Most of the more recent deals have been big companies snapping up smaller startups to acquire specific products or technologies that fit with their priorities. A lot of analysts and industry commentators have been making noises along the lines of ‘pharma has learned its lesson: megamergers cause a lot of disruption for not much overall gain’.

But then, in February, consultancy firm McKinsey put out a report that essentially said, ‘you know what, those mergers did actually do something positive, they “resulted in positive returns for shareholders”’. Whether or not this is a good thing for the overall health of the firms, and of their R&D pipelines is another discussion entirely.

The most recent deal that’s actually been confirmed seems to fit this model – Novartis, GlaxoSmithKline and Eli Lilly have agreed to a roughly $25 billion (£15 billion) three-way asset shuffle in an attempt to focus on what they’re best at, and slim down their sidelines.

It’s all getting a bit hostile

Then there’s Valeant pharmaceuticals gunning for Allergan, the makers of Botox (onabotulinum toxin A). Rather than engage in expensive and risky R&D, Valeant has built up its business by buying established products and squeezing all the value it can out of them. Last week, Valeant revealed that it had teamed up with activist investor Bill Ackman and launched a hostile bid to try and buy up Allergan’s shares. If it goes through, the deal would be worth somewhere in the region of $47 billion.

In response, Allergan has activated a ‘poison pill’ defence, which gives other shareholders rights to purchase additional shares if a single party builds up more than a 10% share in the company, weakening the aggressor’s ability to force a deal through. Allergan’s board has indicated that it might not be averse to a deal with Valeant, but doesn’t want to be bullied into a quick decision without making sure the terms are right.

From the point of view of Ackman, this is a slightly unusual alliance. It is much more common for an activist investor to build up an influential share in a target company, then try and force the board to sell (or otherwise influence the company’s strategic direction), rather than to team up with a prospective buyer.

Boxing with the big boys

There’s also Pfizer and AstraZeneca (AZ). The UK’s second largest pharma firm has confirmed that the world’s biggest drugmaker made a surreptitious pass at a merger deal late last year. AZ politely but firmly gave Pfizer the brush-off, but the behemoth is reportedly coming in with a second, much more brazenly public, offer. But AZ appears not to be for turning. As far as its board is concerned, AZ’s future is as an independent company – perhaps even a slimmed down version of today’s AZ that will follow GSK and Novartis’s lead, and ‘focus on what [it does] well’, in the words of chief executive Pascal Soriot. Whether the door is truly closed, or these are just the opening gambits in a long and drawn out battle, we must wait and see. But there are plenty of people who don’t share Pfizer’s confidence that the deal is such a good idea.

Smoke and mirrors

Businessmen whispering

— Coverage of business deals can get a bit like a game of Chinese whispers © Shutterstock

And then there are the more nebulous and speculative announcements. According to the rumour mill, US giant Merck & Co has been touting its over-the-counter medicines business for several months. A story from Reuters suggests that German firm Bayer and UK-based Reckitt Benckiser are vying to get in on the action, with a price tag somewhere in the region of $14 billion. Reckitt is already well established in the consumer products market, and, if a Bloomberg story is to be believed, Bayer is looking to divest its Material Science polymers division (with Evonik the potential buyer) and focus on healthcare, which would raise around $10 billion for acquisitions. That might follow the pattern of focusing on your core area within the industry, but it would certainly be a big change in direction for Bayer. Needless to say, none of these companies is saying anything official just yet.

Stories of this nature are always credited to ‘people with knowledge of the matter’ or other such disguised sources. That always makes me wonder just exactly how much ‘knowledge of the matter’ those sources actually have. Deals of this magnitude don’t happen quickly – there’s a whole lot of ‘due diligence’ to go through. Each company needs to check out the other’s claims and proposals, then there’s the twists and turns of political manoeuvring and boardroom negotiations. So there are opportunities for the right people to get hold of information.

But there are equally a lot of people who might gain from these nuggets of ‘information’. News outlets get to write breathlessly speculative pieces with sensational headlines; investors are happy because these disclosures often bump up share prices. While the chemists carry on working in labs and plants, with a growing sense of dread about whether their job will even exist next year.

And we’re still really no closer to knowing – is there a fire in the pharmaceutical sector, or is it all just smoke and mirrors?

Phillip Broadwith, Business editor

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Categories: Education

April 2014: Future Medicine

Royal Society R.Science - 28 April, 2014 - 16:53

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Diamonds from Pelé’s hair

Chemistry World blog (RSC) - 11 April, 2014 - 17:29

We had an unusual request to the Chemistry World office this week. A producer from Simon Mayo’s BBC Radio 2 drivetime programme wanted to know if it’s possible to make a diamond from human hair.

Pelé before the final game of his career, Giants Stadium, New Jersey, 1 October 1977. From elliberal.com.ar on a CC-BY-3.0 licence

The query was prompted by the news that Brazilian football legend Pelé had announced a range of diamonds, each made from a strand of his hair, to commemorate each of the 1283 goals he scored in his professional football career.

It seemed a fairly straightforward request – there’s plenty of carbon in hair and it’s certainly possible to make diamond industrially from a carbon source – so I volunteered to take the call. You can listen to the interview here:

I read around first, to find some extra facts and figures about diamonds. Most of these come from ‘the internet’, as I didn’t have much time before broadcast, so please forgive any inaccuracies.

Pele’s hair caught on a radio antenna in Hawaiʻi

My search took an immediate, albeit interesting, diversion when I discovered that Pele’s hair is already a known geological phenomenon. Rather than gemstones derived from a footballer’s foliage, Pele’s hair is an extraordinary type of volcanic glass, formed when molten rock is thrown into the air and extruded by the wind into hair-like golden fibres. These fibres travel downwind of the volcano, cool and solidify where they land. These unusual glass structures are named after the Hawaiian goddess of volcanoes rather than the Brazilian godfather of football.

After this brief foray into volcanology, a reworded search confirmed that Pelé really is turning his hair into diamonds, using one of the established techniques for manufacturing synthetic diamond – the high temperature, high pressure, or HTHP method. This is the method that most closely mimics a diamond‘s natural geological formation. As its name suggests, pressures in the vicinity of 7GPa at more than 1700°C are used to grow fairly large stones using a diamond grit seed and carbon dissolved in a molten metal solvent. The exact conditions do vary – one company that makes diamonds from cremains (‘dead dog diamonds’, according to Simon Mayo) uses 5-6GPa at 1600-2000°C. The size of the resulting diamond depends on a number of factors, not least the time for which the conditions are maintained: De Beers once made a 25 carat (5g) stone by holding these conditions for six weeks.

Just in case Simon asked me live on air, I thought I should figure out how big a diamond made from a strand of hair could be, which means estimating how much carbon a single strand of the ex-Santos striker’s hair might contain. Hair is made of a number of different proteins, predominantly keratin, but also contains oils, water and a wide variety of other compounds (hair is routinely used for toxicological or narcotic testing, due to its tendency to accumulate drug metabolites, heavy metals and other toxins). We don’t know what Pelé has been exposed to (if he’s a fan of seafood there may be above average mercury concentration, for example) so I took average values for everything.

An average 12cm human hair (at least in one study) weighs 0.62mg. Making the sweeping assumption that hair contains a nice round 50% carbon by weight, that gives us 0.31mg of carbon from a single strand. If we make another assumption and convert all of that into diamond, we get an unimpressive 0.00155 carat gem. Apparently, each of the Pelé hair diamonds on sale (yours for just £4500) weighs 1 carat. If these gems are pure footballer fuzz, and don’t contain any generic carbon, they would need to be made from around 650 12cm hairs. There are around 100,000 hairs on an average human scalp, so to make the full run of 1283 diamonds, Pelé would need to shave his head completely 8.3 times.

If you’re a committed football fan, these diamonds could be a good investment, and at £4500 are a snip compared to one made from a clip of Beethoven’s barnet, which sold on ebay in 2007 for £121,000.

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Another poster prize up for grabs – this time at ISACS13

Chemistry World blog (RSC) - 10 April, 2014 - 16:54

The 13th conference in the highly successful International Symposia on Advancing the Chemical Sciences (ISACS) series is taking place in Dublin, Ireland, this July and there’s still time to submit a poster abstract. Extensive poster sessions will form a key part of the symposium and Chemistry World is delighted to be sponsoring a prize for the best poster at the event. The winner will receive £250.

Challenges in Inorganic and Materials Chemistry (ISACS13) will bring together leading experts from several disciplines and encourage the cross fertilisation of ideas. Keynote speakers include David Parker from Durham University and Matt Rosseinsky from the University of Liverpool.

To take advantage of this excellent opportunity to showcase your latest research alongside leading scientists from across the globe submit your poster abstract before 21 April

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Spend your summer with Chemistry World

Chemistry World blog (RSC) - 4 April, 2014 - 16:16

What makes a news story ‘news’? How do journalists construct an article? What sort of cake do they have in the Royal Society of Chemistry restaurant? If any of these questions have occurred to you, then you might be the person we’re looking for.

Cheese scones. Released by Philippe Giabbanelli under a Creative Commons Attribution-Share Alike 2.0 Generic license (http://www.flickr.com/photos/jemsweb/13787548/)

Chemistry World has a paid internship available for eight weeks in the summer of 2014. In those two months, you’ll pitch and write news stories, interview scientists and public figures, edit and lay out our magazine and get involved with our podcasts. It’s ideal for someone with an enthusiasm for science writing and a background in the chemical sciences.

To make the most of your time with us, we’ll also pay for membership of the Association of British Science Writers (ABSW), and take you to the UK conference of science journalists at the Royal Society.

It’s a great opportunity, but don’t just take my word for it. I asked a couple of our previous interns about their experiences:

Akshat Rathi: ‘My time with Chemistry World and Education in Chemistry was a lot of fun and learning. The staff is kind, friendly and helpful. The experience convinced me that science writing is something I enjoyed very much and I could perhaps pursue it as a career. Jumping from grad school to a career outside research can be tough, and this internship really helped me with that.

Since I finished this internship at the end of the 2nd year of my PhD, I have completed another internship at The Economist, worked with the Royal Society of Chemistry’s communications team on RSC News and currently I work as science editor at The Conversation, a new publication that launched in 2013.’

Josh Howgego followed his Chemistry World internship with work experience at Times Higher Education before being awarded a scholarship to study science communication, enjoying a placement at Nature and ultimately landing his current job at SciDev.net. He fondly recalls the extra-curricular benefits to joining the team:

‘Looking back on it now, one of the best moments of my internship with Chemistry World was the cheese scone incident. Allow me to explain. Early each day the magazine’s editorial team would have a news meeting to pore over papers and ideas and decide which of them to commission stories on. My only experience of science writing up to that point had been writing a small-time blog, so this quickly became one of my favourite times: it taught me a lot about what makes something “news” and hanging out with people who did the job I wanted to do one day was an opportunity to learn by diffusion. But added to that, these meetings took place in the Royal Society of Chemistry’s canteen and there was always coffee and the option of breakfast. You can imagine how my enjoyment turned to pure joy when one day, about three weeks into my placement, there were cheese scones on offer.

Perhaps it’s worth highlighting two other things I gained from my time at the RSC. The first was practice at professional writing. On the one had I saw how to structure a news story, and how that differs from an informal blog or feature, say.  On the other, I learned the difference between a hyphen and an em-dash, and how helpful the correct use of grammar can be so helpful to clear communication. But perhaps the most important gift I received from Chemistry World was a bit more journalistic confidence. I was given responsibility for calling scientists and MPs and had to quiz them directly about their views and ideas. Looking back, I can see that this dramatically helped me understand how journalists put together a news story. It was probably this new grasp of what reporting really is that convinced me I wanted to be a science journalist — and I’m very grateful to all at Chemistry World for instilling me with it.’

The closing date is 18th May, so if you’re interested in joining us, please visit http://jobs.rsc.org/job/6256/science-writer-internship/ to apply.

Looking forward to seeing you in the summer!

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March 2014: Our physics special

Royal Society R.Science - 31 March, 2014 - 18:32

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Tasty research at ACS Dallas

Chemistry World blog (RSC) - 31 March, 2014 - 12:21

If you follow us on Twitter you’ll know that I spent 16-20 March in Dallas, Texas for the ACS spring conference, hearing about peptides that attack TB, dissolvable electronics and new drug testing methods.

— Chocolate absorbing volatiles from wine

I was also happy to find that – perhaps fitting for a state known for generous helpings – there was plenty of food and booze research on the scientific agenda.

First up, chocolate. We all love it, and apparently so do the bacteria that live in our guts. Dark chocolate has been linked to various heart and metabolic heath benefits in past studies. Now, a group led by John Finley at Louisiana State University, US, may have come closer to figuring out the reasons behind some these effects. Dark chocolate with a high cocoa content contains polyphenol antioxidants (such as catechins which are also found in tea), but these are poorly digested and absorbed in the gut, so this is unlikely to be the full story. Instead, say the researchers, bacteria living in the gut may play a part, munching on the undigestible parts of chocolate and fermenting polyphenols to produce smaller compounds that are more readily absorbed. The group put different cocoa powders through a model digestive tract, then fed the leftovers to human gut bacteria, and showed that some of the simpler phenolic acids produced had anti-inflammatory effects. They suggest small amounts of dark chocolate could be combined with prebiotic supplements to help healthy internal gut microbes thrive.

Another piece of chocolate-related research I happened to stumble across was a group at Salt Lake Community College’s efforts to make wine flavoured chocolate. Sydney Richards, one of the students involved, told me the inspiration was a lack of tasty wine-chocolate combinations already out there. Most wine chocolates tend to be flavoured with a liquid filling like a liqueur or crunchy crystalline pieces, and neither taste great. But the group have come up with a simpler to get the chocolate to pick up the wine flavour, without the two even having to touch. Chocolate naturally absorbs nearby volatile compounds (Richards told me her supervisor found this out to her cost after storing some chocolate in the same drawer as a bar of soap!). The group have already used this effect to capture mint, coffee and fruit flavours in chocolate, so decided to try a similar approach with wine. The set up is simple – the chocolate is put on a rack above a bowl of wine and left for about two weeks, which allows it to absorb flavour volatiles like 3-methylbutan-1-ol and succinic acid derivatives which make it taste nice and wine-y. I’m assured the results with dark chocolate and red wine are pretty tasty, though the white wine version tends to get bitter over time.

— The Agave plant (c) Shutterstock

On the subject of booze, agave plants (from which tequila is made) were also the focus of some interesting research, but as a source of sweeteners rather than spirits. A group led by Mercedes López at the Center for Research and Advanced Studies of the National Polytechnic Institute in Mexico are interested in using undigestible parts of the plant as sugar substitutes for diabetic or obese people. Their work focussed on agavins – long chains of fructose sugar that aren’t digested. Agavins (not to be confused with agave syrup, which is rich in fructose monomers) taste much less sweeter than sugar, but López’s group have found some evidence they can help reduce cravings and regulate blood sugar – they found that mice given agavins in their water ate less food and lost weight compared with control groups. Their blood sugar was also lower than those given sugars like glucose and fructose, or the artificial sweetener aspartame. These initial results look promising, but more needs to be done to explore agavins’ potential, and their neutral taste is an obvious limitation.

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