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Brussels

Belgium

Telephone: (02) 509 6111

Fax: (02) 509 6617

Website: www.solvay.comPublic Company

Incorporated: 1967 as Solvay & Cie S.A.

Employees: 30,302

Sales: EUR 7.92 billion ($8.30 billion) (2002)

Stock Exchanges: Euronext Brussels

Ticker Symbol: SOL

NAIC: 325181 Alkalies and Chlorine Manufacturing; 325188 All Other Basic Inorganic Chemical Manufacturing; 325199 All Other Basic Organic Chemical Manufacturing; 325211 Plastics Material and Resin Manufacturing; 325412 Pharmaceutical Preparation Manufacturing

Company Perspectives:

Our Mission. Building on our scientific, technical and commercial expertise, we responsibly provide innovative products and services related to chemistry and human health to create ever-increasing value to our customers, shareholders and employees. Our Vision. Solvay is an independent and ethical global industrial group with a balanced portfolio of sustainable profitable and growing businesses under careful environmental management: Amongst the world leaders in selected markets and products, either alone or with sound complementary business partners. Valued by its customers as a highly competent, reliable and competitive solution provider. With a clear, motivating organization, developing and empowering people and teams through rewarding and challenging jobs. Acting as a good corporate citizen, caring for the health, safety and environment of its employees and of the community at large.

Key Dates:

1861:

Ernest Solvay files a patent for a method of manufacturing artificial soda ash.

1863:

Solvay and his brother Alfred form Solvay & Cie to pursue this new method.

1865:

After the firm is driven to the brink of bankruptcy, the brothers succeed in producing large amounts of soda ash at their first factory, in Couillet, Belgium.

1873:

Several British plants are constructed, the first foreign operations.

1881:

Factories open in the United States and Russia.

1895:

The company is able to work electrolysis into its industrial scheme, leading to the diversification into the production of chlorine and caustic soda.

1900:

Ernest Solvay continues to hold all patents related to the Solvay method of soda ash production, which has now reached 900,000 tons per year.

1922:

Founder Ernest Solvay dies.

1949:

Solvay & Cie diversifies into plastics when it begins producing polyvinyl chloride (PVC) at its plant in Jemeppe, Belgium.

1950s:Company moves into the life sciences field.

1959:

Solvay expands further into plastics with the start of high-density polyethylene (HDPE) production.

1960s:Solvay expands into plastic processing.

1967:

Company is incorporated as Solvay & Cie S.A.

1971:

Solvay's shares are placed for sale on the public market for the first time; company adopts a more modern management structure, with top management positions opened up to executives from outside the founding family.

1976:

Production of polypropylene begins.

1979:

Company begins to make acquisitions of life sciences firms.

1980:

Life sciences activities are placed within a separate Health sector.

1984:

Interests in the United States are reorganized under a new holding company, Solvay America, Inc.

1992:

Solvay buys Tenneco Inc.'s soda ash operations in Green River, Wyoming, gaining significant capacity in low-cost, trona-based soda ash.

1998:

Aloïs Michielsen becomes the first person from outside the founding Solvay family to serve as chief executive.

1999:

The European PVC business of BASF is acquired.

2001:

Solvay swaps its small polypropylene business for BP's specialty polymers operations; the two companies also form HDPE joint ventures in North America and Europe.

2002:

In its largest acquisition ever, Solvay buys Ausimont S.p.A., a EUR 600 million fluorinated chemicals and polymers business.

Company History:

The wide ranging activities of the Belgium chemical firm Solvay S.A. center on four areas: commodity and specialty chemicals, plastics, processed plastic products, and pharmaceuticals. Chemicals account for about one-third of the company's revenues. Solvay is among the world leaders in several commodity chemicals, including soda ash, hydrogen peroxide, persalts, barium and strontium carbonate, and caustic soda, as well as such specialty chemicals as fluorochemicals. In plastics, which account for about one-quarter of overall sales, Solvay produces fluorinated polymers and elastomers, as well as vinyls. About 19 percent of revenues come from plastic processing, including automobile fuel and air intake systems, various films, and swimming pool linings. Solvay's pharmaceutical operations, generating about a quarter of revenues, are relatively small on a global scale, ranking about 37th among the world players in the early 2000s. Drug development efforts focus on four main therapeutic fields: gastroenterology, hormone treatments, cardiology, and mental health. Solvay operates in 50 countries; more than 95 percent of its revenues are generated outside of Belgium, with 45 percent originating outside of the European Union.

Although Solvay was not incorporated as a public company until 1967, its roots go back to the 1860s and the discovery by its founder, Ernest Solvay, of a new industrial process for producing soda ash, an essential element in glassmaking. Under his guidance and that of four generations of Solvays, the firm became one of the largest in Belgium, combining chemical innovation with social projects and cultural programs. Although they are no longer involved in the direct management, members of the Solvay family continue to have a substantial ownership interest in the company through a 26 percent stake held by Solvac S.A., a publicly traded Belgian holding company controlled by the family.

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1990s: Shedding Stodgy Reputation in a Deal-Making Decade

In 1990 Solvay's profits experienced a drop of 5 percent from the year before, and in 1993 it reported a loss--of $193 million--for the first time in 12 years and for only the second time in its long history. Moreover, throughout the 1990s observers questioned its ability to compete in the pharmaceuticals market given that its major competitors--such as Akzo and Rhône-Poulenc--were themselves pure pharmaceuticals producers. The collapse of the Berlin Wall and the Soviet Union's subsequent disintegration presented Solvay with an opportunity to recover the plants it had lost during World War II and the postwar years. In 1991 it regained ownership of its former East German soda ash and hydrogen peroxide plant, seized by the Nazis in 1939, and announced plans to invest DM 200 million in its renovation.

To improve its wavering profits, Solvay throughout the 1990s sought partnerships with global chemical and chemical end-user companies. In 1990, for example, it joined with the U.S. Dexter Corporation to form a specialty plastics joint venture and partnered with Wienerberger Canalisent L'Europe to acquire pipe manufacturers in Hungary, East Germany, and Greece. The following year it struck a deal with the U.S. pharmaceuticals giant Upjohn Company to comarket some of each other's products and entered into a joint venture with a Japanese company to produce salt in Thailand. Between 1994 and 1996, it also merged its coolant business with Germany's Hoechst, established automotive products and biosciences joint ventures in mainland China and Argentina, and formed an automotive products partnership with the O'Sullivan Corporation of the United States.

It also closed unprofitable operations and sold noncore businesses. Between 1991 and 1996, for example, it sold some of its animal health products line, its feed additive operations, its bioinsecticide business, and--in 1996--its remaining animal health units, to American Home Products. Other significant divestitures included the sale of its catalysts and sorbents businesses, its wood production and special cement operations, its industrial enzymes business, and, in 1997, its Brazilian plastics subsidiary.

Under CEO Baron Daniel Janssen, who was also related to the founding family by marriage, Solvay attempted to dispel its reputation as a stodgy industrial dinosaur by making repeated acquisitions. In 1990-91, for example, it acquired an American blow-molded plastics operation, gained a share in a Spanish polyvinylchloride producer, and broke up its hydrogen peroxide joint venture with Laporte of the United Kingdom in order to gain complete control of that important business. In June 1992 it paid Tenneco Inc. of the United States $500 million for its soda ash operations in Green River, Wyoming. This acquisition marked a historic shift as Solvay gained significant capacity in low-cost, trona-based soda ash; it also shored up the company's position as the global leader in soda ash production. In other deals, Solvay acquired a medical tubing manufacturer in 1994, bought Hoechst's fluorocarbons business and a Bulgarian soda ash plant in 1996, and acquired a Namibian fluorspar mine and a share of a Finnish hydrogen peroxide business in 1997. The company in 1997 also took full control of the U.S. plastics joint venture it had formed with Dexter Corp. Called D&S Plastics International, the Auburn Hills, Michigan-based firm had developed into a leading supplier to the North American automobile industry of polyolefin resins, principally used in the production of car bumpers.

By 1995, Solvay's sales had edged past $9.3 billion--more than a quarter of which was contributed by its U.S. subsidiaries--and in 1996 Janssen announced that Solvay would now concentrate its efforts on five principal sectors: alkalis, peroxygens, plastics, health (including pharmaceuticals), and processing (which included automotive products, industrial sheet and film, and pipes and fittings).

Early 2000s: Shifting Focus to Specialty Chemicals and Pharmaceuticals Under First Nonfamily CEO

In June 1998 Janssen succeeded Boël as chairman of Solvay's board of directors, while Aloïs Michielsen took over Janssen's position of chairman of the executive committee, a position similar to that of chief executive. In a historic development, Michielsen, a 28-year company veteran, became the first person from outside the founding Solvay family to head up the company. The new leader continued--and soon accelerated--the deal-making trend initiated by his predecessor.

During 1999 Solvay became the world's fourth largest producer of polyvinyl chloride (PVC) by acquiring the European PVC business of BASF, which was merged with Solvay's existing PVC business to create Solvin S.A., a 75-25 joint venture between Solvay and BASF headquartered in Brussels. Solvay also acquired Ellay, a leading U.S. producer of PVC films for medical applications, and entered into a joint venture with Phillips Petroleum Company to build two high-density polyethylene (HDPE) plants in North America. In 2000 Solvay and Plastic Omnium of France combined their fuel systems operations into a 50-50, Paris-based joint venture called Inergy Automotive Systems S.A., creating the world's largest manufacturer of plastic fuel tanks, with 3,300 employees and 30 facilities in 15 countries.

An important and complex deal with BP was concluded in October 2001. Solvay swapped its small, money-losing polypropylene business for BP's specialty polymers operations; at the same time, the two companies formed HDPE joint ventures in both North America and Europe. Combined, the joint ventures ranked third in the world in HDPE and had overall revenues of EUR 2 billion ($1.86 billion). The resulting Houston-based entity, BP Solvay Polyethylene North America, also took over Solvay's interest in the two HDPE plants being built with Chevron Phillips Chemical Company (Phillips Petroleum having since combined its chemicals business into a 50-50 joint venture with Chevron Corporation). As part of the deal with BP, Solvay had the right to exit from the joint ventures in late 2004, and industry observers widely expected the company to do just that.

Early in 2002 Solvay partnered with Kali und Salz to create a European salt joint venture called ESCO in which Solvay took a 38 percent stake. The big news that year, however, was Solvay's completion of its largest acquisition ever. In May 2002 Solvay acquired Ausimont S.p.A. from Montedison S.p.A. and Longside International for EUR 1.3 billion ($1.1 billion), gaining a EUR 600 million fluorinated chemicals and polymers business. Part of the funds for the deal were gained through the issuance of EUR 800 million in preferred stock to a financial investor, and Solvay was likely to use the proceeds from the sale of the BP Solvay Polyethylene joint ventures to reimburse the buyer of this stock. At the beginning of 2003, Solvay merged its existing fluoropolymers business with Ausimont to form Solvay Solexis, which was based in Bollate, Italy.

The end result of these transactions was that Solvay was much more highly focused on specialty chemicals and pharmaceuticals at the expense of the commodity chemicals business on which the firm was founded. Solvay was aiming to increase the share of group earnings before interest and tax that derived from its specialty chemical and pharmaceutical operations to 70 percent by 2006, up from 58 percent in 2001. One result of this shift in focus was that the company was better insulated from the cyclical effects of the commodity chemical sector. Overall, the various deals strengthened Solvay in another way. More of the company's businesses--80 to 90 percent of the them in 2002--had leadership positions in their specific sector, compared to less than 50 percent five years earlier.

The changes in the product portfolio also had a very positive on Solvay's bottom line. For 2002, although revenues were down 9 percent, earnings jumped 23 percent, reflecting the acquisition of more highly profitable businesses and the divestiture of less profitable ones. In fact, the company's return on equity hit 13.1 percent, a level not reached in more than ten years, though below Solvay's target rate of 15 percent.

Also boding well for the future was the rapid growth of Solvay's pharmaceutical business, where annual revenue growth was averaging 14 percent in the early 2000s. The company's focus on four main therapeutic areas--gastroenterology, hormone treatments, cardiology, and mental health--was paying off handsomely, with revenues approaching the EUR 2 billion mark. Solvay remained a small player on the global stage, ranking only in the top 40 among the world's pharmaceutical firms, and many questioned the company's continued commitment to this sector, particularly given that the trend was for major chemical groups to withdraw from drugs, as had, for example, BASF and DuPont. But Solvay had some promising products in its drug pipeline, most notably cilansetron, a treatment for irritable bowel syndrome; clinical trials for this drug were nearing completion, and Solvay hoped to launch the product in mid-2004 and was anticipating annual sales of more than EUR 250 million.

Principal Subsidiaries: Alkor Draka S.A.; Solvay BAP S.A.; Mutuelle Solvay S.C.S. (99.9%); Peptisyntha & Cie S.N.C.; Solvay Automotive Management and Research SNC; Solvay Benvic & Cie Belgium S.N.C.; Solvay Coordination Internationale des Crédits Commerciaux (CICC) S.A.; SIFMAR - Solvay Industrial Foils Management and Research S.A.; Solvay Interox S.A.; Solvay Pharma & Cie S.N.C.; Solvay Osterreich AG (Austria); Solvay do Brasil Ltda. (Brazil); Solvay Sodi AD (Bulgaria); Solvay Deutschland GmbH (Germany); Solvay Portugal - Produtos Quimicos S.A.; Solvay Asia Pacific Pte. Ltd. (Singapore); Solvay Iberica S.L. (Spain); Solvay (Schweiz) AG (Switzerland); Solvay UK Holding Co. Ltd.; Solvay America, Inc. (U.S.A.). The company maintains 398 subsidiaries and affiliated companies in 50 countries.

Principal Competitors: FMC Corporation; The Dow Chemical Company; Occidental Chemical Corporation; Shin-Etsu Chemical Co., Ltd.; Formosa Plastics Corporation; PolyOne Corporation; GE Plastics; E.I. du Pont de Nemours and Company; Atofina; DuPont Dow Elastomers LLC; Dyneon, LLC; Ticona; Sumitomo Chemical Company, Limited; GE Specialty Materials; Novartis AG; GlaxoSmithKline plc.

[...]

https://cen.acs.org/articles/87/web/2009/09/Solvay-Sells-Drug-Unit-Abbott.html

Solvay Sells Its Drug Unit To Abbott Labs

Acquisition: Firm is latest European conglomerate to split chemicals and drugs

by Ann M. Thayer

September 28, 2009

Solvay is selling its pharmaceutical business to Abbott Laboratories for $7.6 billion. Calling the move the best option to secure growth for both its pharmaceutical and nonpharmaceutical sides, Brussels-based Solvay will refocus its efforts on chemicals and plastics.

In deciding to shed its drug operations, Solvay is following the lead of several other once-diversified companies, including AkzoNobel, Altana, and BASF. By tying up financial resources in pharmaceuticals, hybrid companies limit their ability to increase size and scale in chemicals, says Britta Holt, an analyst with London-based Fitch Ratings. Meanwhile, their drug operations typically suffer from a lack of critical mass in R&D and sales compared with stand-alone competitors.

“The proceeds from the divestment will be reinvested in external and organic growth with a sharp focus on long-term value creation,” said Solvay CEO Christian Jourquin in announcing the deal. He highlighted geographical expansion and sustainable products.

After the deal is completed, Solvay will have about $10 billion in annual sales, split about equally between chemicals, including soda ash and electrochemicals, and plastics, such as vinyls and specialty polymers. Abbott will gain about $3 billion in annual sales from Solvay, increasing its overall revenues by about 10%. The Solvay unit will also add some $500 million to Abbott’s $2.7 billion in annual R&D spending.

According to Abbott, Solvay brings a portfolio of drugs sold largely outside the U.S. as well as entry into the vaccines market. Abbott has been paying royalties to Solvay on sales of TriCor and Trilipix, cholesterol-lowering fenofibrate drugs that it will now own outright.In addition, Abbott’s international business, driven by specialty products sold in developed markets, will be expanded by combining Solvay- and Abbott-branded generics in emerging markets, said Olivier Bohuon, Abbott executive vice president.

In a report to clients, Credit Suisse stock analysts describe the deal as “primarily financial engineering,” rather than any “directional change” for Abbott. Datamonitor analyst Joshua Owide suggests, however, that Abbott’s long-term pharmaceutical sales growth will be significantly better than was forecast before the deal.

Solvay says all of its pharmaceutical employees will transfer to Abbott with the business.

https://www.fiercebiotech.com/biotech/solvay-pharmaceuticals-inc-announces-exclusive-north-american-license-agreement-depomed-inc

https://www.courthousenews.com/solvay-pharma-must-face-bribery-claims/

Solvay Pharma Must Face Bribery Claims

CAMERON LANGFORD / January 28, 2015

HOUSTON (CN) - Solvay Pharmaceuticals cannot duck whistleblower claims that it bribed Medicaid doctors to prescribe its drugs for unapproved uses, a federal judge ruled.

Two former Solvay managers, John King and Tammy Drummond, sued the company in 2006, alleging it violated the False Claims Act by paying doctors kickbacks in the form of "bogus speaker and research fees, resort weekends, cash payments, or Harley Davidson goods" to prescribe its drugs Aceon, Luvox and AndroGel for uses not approved by the Food and Drug Administration.

Solvay is a Belgian chemical company. Its co-defendant subsidiary, Solvay America, is based in Houston. Another defendant is Solvay Pharmaceuticals, which was a Solvay subsidiary until Abbott Laboratories acquired it in 2009, and spun it off into a new entity called AbbVie Products.

The whistleblower lawsuit was filed under seal and joined by 27 states, the District of Columbia and Chicago.

The federal government declined to intervene in the lawsuit, but did file a statement of interest.

Under the False Claims Act, a whistleblower, or qui tam plaintiff, with evidence of fraud against the United States can sue the perpetrator on Uncle Sam's behalf.

The law stipulates that whistleblowers can receive between 15 and 30 percent of the total recovery from the defendant.

The lawsuit alleges that Solvay's false marketing and kickbacks led the states' Medicaid programs to pay millions of dollars in claims for Aceon, Luvox and AndroGel.

Luvox is the brand name for fluvomaxine, a selective serotonin reuptake inhibitor, and a competitor of the blockbuster antidepressant Prozac.

Solvay filed an application to sell Luvox with the FDA in 1991 to treat obsessive compulsive disorder. The FDA approved it for the disorder three years later.

But Solvay soon realized that "OCD alone would not provide meaningful sales" and began pushing Luvox for off-label uses of treating depression and other anxiety-related disorders, according to the plaintiffs' fifth amended complaint.

The FDA issued a warning in 2004 stating the use of drugs such as Luvox by adolescents may increase the risk of suicidal thoughts and actions.

Eric Harris, one of two teenagers who shot and killed 13 people at Columbine High School in 1999, before killing himself, was on Luvox, according to the complaint.

Solvay downplayed the connection, telling doctors "that in Harris's case Luvox had not been used appropriately," according to the amended complaint.

The marketing blitz paid off, the plaintiffs claim, as Luvox "was a top-selling drug for Solvay for years, with at least $6 million in Medicaid claims in the state of Texas alone. The majority of Luvox's Medicaid sales were for indications other than for OCD."

The FDA approved Solvay's drug Aceon in 1993 to treat high blood pressure, and with 11 similar drugs already available, the "market's response to its launch was a collective sigh of indifference," according to the complaint.

But Solvay got creative with its marketing of Aceon, the whistleblowers say.

"As part of Solvay's 1999 launch of Aceon, Solvay promoted Aceon for 'arterial wall compliance.' Solvay stressed to doctors that Aceon delivered a structural change in all arteries by remodeling them, whereas other hypertension drugs merely lowered blood pressure," the complaint states.

Solvay also falsely marketed Aceon to treat strokes and kidney complications caused by diabetes, the whistleblowers claim.

As for AndroGel, the plaintiffs claim, Solvay persuaded the FDA to approve the drug to treat men with hypogonadism, a condition in which the testicles do not produce testosterone.

"Solvay launched AndroGel in 2000 touting the unsupported claim that four to five million American men suffered from hypogonadism. For this figure, Solvay cited the FDA's own website as the source, when in fact the figure came from the manufacturer of Androderm, a testosterone skin patch," the complaint states.

By 2006, AndroGel was Solvay's top-selling drug, with U.S. sales of more than $300 million, the plaintiffs say in their 277-page fifth amended complaint.

Solvay sought partial dismissal of plaintiffs' claims that it "actively targeted" and "wooed" doctors who were members of states' Medicaid Pharmaceutical and Therapeutics Committees to place its drugs on states' preferred drug lists (PDL) or formularies, which govern how state Medicaid programs pay for prescription drugs.

The plaintiffs claim that Solvay's deceptive marketing led to prescription filling by pharmacies that submitted claims to Medicaid for reimbursement.

U.S. District Judge Gray Miller issued a 12-page ruling on Jan. 23.

He granted Solvay's unopposed motion to dismiss some claims involving several states because the plaintiffs "are no longer asserting a claim that [Solvay] improperly wooed P&T members into including its drugs on the state PDLs or formularies" in those states, the judge wrote.

Miller left much of the Medicaid committee "wooing" claims intact, however.

"The wooing claim is available, pursuant to the pleaded claims in the fifth amended complaint, for states that had a PDL or some type of formulary governed by a group called a P&T Committee during the relevant timeframe if the drugs at issue were on the list," Miller wrote.

The states and entities involved in the lawsuit are California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Maryland, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Massachusetts, Virginia, the District of Columbia and Chicago.