Although this increase is broadly in line with industry as a whole, as indicated in the 22nd annual R&D Trends Forecast from ACC’s Arlington neighbor, the Industrial Research Institute, it isn’t exactly a sign of an industry rushing to invest in an activity that has long been at the core of its creative and competitive success.
If anything, there appears to be a rush to take R&D out of the country. More and more chemical companies are opening new facilities in emerging economies like China and India. Dow Chemical, Midland, Mich., for example, recently announced plans to invest more than $200 million in manufacturing and R&D facilities for its Dow Epoxy subsidiary in Shanghai, while DuPont, Wilmington, Del., last year opened a facility in Zhangjiang near Shanghai. This isn’t just a U.S. trend either. Earlier this year BASF, Ludwigshafen, Germany, whose U.S. operations are headquartered in Florham Park, N.J., opened its first nanotechnology research center in Asia, in Singapore, while Degussa, Düsseldorf, Germany, and Parsippany, N.J., set up R&D labs in Mumbai, India, in 2004.
The lower cost of operating R&D labs in these countries obviously is a factor behind this trend, although it also reflects other competitive issues such as the need to be closer to increasingly important markets. Regardless, these moves underscore a broader pressure facing R&D — the constant weighing of its cost against the rewards it can deliver.
“If you’re going to be competitive in the chemical industry,” says Kurt Swogger, Dow’s vice president for performance plastics and chemicals R&D, based in Freeport, Texas, “you have to have the ability to be much more productive with your research dollar.” One relatively new (at least to the chemical industry) way of enhancing R&D productivity is via high throughput experimentation, coupled with the combinatorial chemistry method pioneered in the pharmaceutical industry.
This so-called combi/HTE approach has already brought Dow commercial success — first with a range of polymers and elastomers called Versify and this year with a new olefin-based elastomer range known as Infuse. What these products have in common is that they are both produced with catalysts discovered using high throughput techniques of Symyx Technologies, Santa Clara, Calif.
Last year Dow entered into a $120-million, five-year alliance with Symyx after working with the company for several years on the development of the Versify catalysts. “We started with catalysts,” explains Swogger, “but now we’re looking at materials science, polymerization and other chemistry that can be used with high throughput techniques.”
Symyx’s customer list reads almost like a “Who’s Who” of the chemical industry. The company “currently has 15 licensed discoveries that are in development and nine emerging development candidates,” says Teresa Thuruthiyil, its vice president for investor relations. One of those near-term development materials is a refining catalyst for ExxonMobil, Plano, Texas, which has a five-year strategic alliance with Symyx worth $200 million. And in April, Celanese, Dallas, Texas, introduced a new catalyst to reduce the cost of manufacturing vinyl acetate that was discovered by Symyx in another research collaboration. “We have worked with Celanese for several years,” Thuruthiyil notes. “The research to identify the catalyst was done at Symyx by scientists in our laboratories using our proprietary equipment, while the development was done by Celanese at their facilities.”
Founded in 1994, Symyx was one of the first companies to adapt the techniques of combinatorial chemistry and high throughput experimentation, which even then were becoming established research tools in the pharmaceutical industry, to materials science. It has developed a range of proprietary tools and software that enable researchers to generate hundreds to thousands of materials at a time, and then to rapidly screen them for desired properties. Its Polyolefin Workflow tool, for example, was used in the catalyst developments cited above.
Combining research and equipment
Although as Thuruthiyil says, “the labs are at the heart of what we do,” approximately half of Symyx’s business is now in the supply of its tools and software to companies — including Dow — wanting to take high throughput techniques into their own R&D departments.
Some of the tools — though not the highest throughput systems, says Thuruthiyil — are also licensed to other contract research and equipment companies, such as Solvias, Basel, Switzerland, and Fort Lee, N.J., and Biotage, Uppsala, Sweden, and Charlottesville, Va. Solvias recently launched its first full-scale high throughput catalysis screening service for asymmetric homogeneous hydrogenations, based on specially adapted Symyx instrumentation, while Biotage offers the Endeavor catalyst screening system. Originally licensed to Argonaut Technologies, which was acquired by Biotage last year, Endeavor is a parallel multireactor synthesizer that, with eight small reactors, is basically a smaller version of Symyx’s Parallel Polymerization Reactor (PPR) system of 48 reactors with a throughput of nearly 100 reactions a day (Figure 1).
Figure 1. Compact screening unit includes 48 separate reactors.
This dual business model approach — part research company, part equipment supplier — also applies to the German company hte AG, Heidelberg, which was founded in 1999, backed by two key collaborations with BASF’s catalysts department and ChevronTexaco’s research and technology center. In the last two years the systems side of hte’s business has grown strongly, says Dirk Demuth, CEO of the eponymous “high throughput experimentation” company. “There are really two schools of thought at play,” he says. “There are companies who build on strong outsourcing activities, even in R&D, and companies that want to have the equipment in house.”