Category Archives: Chemistry Blogs

Professors and Their Patents

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I had the occasion to have a conversation with a very prominent chemistry professor this week.  He has many hundreds of publications and many, many patents.  The fellow’s name would be familiar to many.  As such characters tend to be, he was overflowing with ideas and enthusiasm. His energy was evident from the precocious stream of insights and commentary that flowed from his gurgling fountain of knowledge.  

But something he said in passing caught my attention and for a moment halted my petit mal seizures resulting from overexposure to his relentless rhapsody of intellection and hypercogency.  He chimed that not so long ago his University had been passively collecting a stack of patents generated by its faculty. They had been in no particular hurry to do anything with the IP and had only recently started to take an interest in it. He made a furtive attempt to strike a spark of interest in his patents and when met with silence, quickly retracted it back into its sheath.

In my travels I have encountered professors who have made faint reference to their patents, say, during a poster session, in the manner of weary gentry casually mentioning an obscure parcel of prairie in Oklahoma.  Interesting, but yesterday’s news.  Sort of a publication, but … not really. Not all profs have such a casual view of patents, however. 

<<<<<< A snarky sentence was removed>>>>>>> …  Apparently he was patenting most everything that spewed from his labs.  Every permutation- methyl, ethyl, butyl, … futyl- was carefully covered by complex Markush claims so as to anticipate even the most clever work-around.  It makes one wonder how such research groups are properly managed. Do you have an IP group and a public domain group? Should people doing the IP work be paid more?

What raises my hackles about university patents is this: As a result of the Bayh-Dole act, universities can be assigned patents to inventions that were funded by federal tax money.  Superficially, it sounds like a decent idea.  It sounds like it might facilitate technology transfer. What’s wrong with that?

Well, let’s see.  A patent confers 20 year monopoly rights to the assignee (rarely the inventor) for a process and/or composition of matter.  One obtains a patent in order to enjoy protection from infringement, or unauthorized use. In the case of a university, just who do they need protection from?? The public who paid for the research leading to the invention? 

What kind of public policy is this?  Public monies are disbursed competitively in the form of research grants which funds the research.  The public pays for the bricks and mortar to keep the wind and rain off that new 600 MHz NMR in the new wing and for the journal subscriptions in the library.  The public has to pay for the patent prosecution and the trips to ACS meetings to give a talk about the work (though rarely is there a mention that a patent is pending).

The public has to pay Chemical Abstracts Service for access to bibliographic information and copy fees or journal subscriptions or download fees to access the information.  For a business to use the invention, a license agreement has to be negotiated and in all likelihood, will have to pay a fee upfront, well in advance of the first dollar of sales, and submit to annual audits.  With any given patent, the University Tech Transfer Office may have already issued an exclusive license to someone else. In that case, tough luck.

Granted, some of the more IP savvy schools reap decent royalties from some fraction of their patents, i.e., MIT & CalTech.  But I would say that they are in the minority. Most patents just consume money, not generate it.  These unexploited patents merely serve as a barrier to the public who are trying to get product to market.  It is quite easy for a chemist to reinvent a compound or process that has been claimed by someone else already.  It is bad enough when it is your competition. It really stings when you are barred from practicing art that you unwittingly helped to pay for.

Let me sponge up the bile and make room for others to comment. What do you think about this issue?  I’m probably just full of hot air.

Note: This is a revised post, with minor content editing. 

Chemists and Chemical Engineers

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What an awkard pair, these chemists and chemical engineers.  To strangers from a distance they might appear almost interchangeable.  Someone from another field might assume that the differences could be as inconsequential as minor variations in accent or hair style are between neighbors.  A simple matter of preference for the practical or the arcane. But that someone would be wrong.

Chemists and Chem E’s are really quite different by training and by disposition.  We chemists think of our field as resting upon the three pillars- Theory, Synthesis, and Analysis.  Chem E’s will agree, but they’ll point out that there is a 4th pillar- Economics. 

Here is an act of convulsive reductionism:  Atomic and Molecular Chemistry (as opposed to Nuclear Chemistry), the science we normally think of when we use the word “Chemistry”, really concerns itself with the behavior of electrons near positive point charges. When we cause a chemical change we are perturbing the disposition of electrons somewhere. In doing so, ensembles of nuclei and their electrons connect, disconnect, or otherwise alter the disposition of the electrons.  Chemists make and break bonds, transfer electrons, or promote electrons to particular energy states.  This work is limited to the outermost layers of the onion. We rarely ever have to consider the inner layers of electrons and we never monkey with the nucleus.

Chemistry is very much an electronic activity. It is the realm of electronic quantum mechanical formalism and machinations at the Angstrom scale. Virtually every chemical change we do involves the twiddling of electrons somewhere.

Chem E’s, on the other hand, practice applied classical physical chemistry.  Unlike organikkers such as myself, they took a serious fancy to P-chem. Their quantum unit is the dollar. These folks can actually put thermo to use for fun and profit. They understand the sacred and profane applications of the gas laws. Chem E’s can specify what sort of pump you need to move whatever variety of hellbroth you care to convey and they can probably estimate the Reynolds number of the rainwater running off your nose.  A Chem E can tell you what kind of materials of construction and seals you need to reflux thionyl chloride in your reactor and what kind of chiller capacity you need to condense it. 

And as engineers, they can plan a construction schedule, work up a cost estimate, and supervise the construction of whatever kind of process equipment you care to specify from the dirt up.  A chemist could probably do it as well, but it would look like a chemist did it.  I have personal experience here.

You probably wouldn’t ask a Chem E to synthesize vitamin B-12.  But they wouldn’t ask a chemist to design a continuous fractional distillation column either.

Chemical Blogometrics

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I see that according to Chemical Blogspace, my Gunning-Fog index has gone up a notch- from Al Gore to Thomas Pynchon.  Oh, good gawd.  Now I have to worry about that as well…?

Forty thousand years ago all you had to worry about was a sabre tooth tiger dropping out of a tree on you, or those nasty Neanderthals up the river raiding your camp, killing your women and raping the men. Today we have secretive organizations applying these odd metrics from the dark recesses of the blogosphere. Who are these people? And, what do they want? 

Actually, what they are doing is quite interesting. It provides good feedback for bloggers. Once we wipe away the tears we can improve our “product”.

All this talk coming from a guy who writes under a pseudonym \;-)

Specification Creep

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Back in grad school, when I was a younger and more innocent chemist, I never gave the matter of purity specifications much thought. Well, let me qualify that.  If my Aldrich reagent was 98 % or greater, I was usually happy.  Yeah, there is the matter of water and a few other things, but for the most part specs didn’t pop into my radar very much.  The other cats and dogs in the material usually washed out somewhere along the reaction sequence.

The issue of specifications in the fabulous world of industry, however, is a really big deal. Indeed, for a company that does custom synthesis or is otherwise agreeable to starting up production of a new product, the matter of negotiating specifications is strangely complex.  Customers have expectations of how pure their product should be and the manufacturer, that is, those who are grounded in the bitter reality of chemical processing, may be far less certain as to what constitutes a reasonable specification. This is nothing new or secret.  All other manufacturing industries have the same issue. 

I previously said that the matter was strangely complex.  Before the customer and the manufacturer can agree on a deal, they have to resolve the matter of what is needed vs what is wanted. 

Here is a case study: the customer initially specifies 99.0 % purity, white crystalline solid, and no greater than 0.2 % residual solvent. And they want it for $100/kg for a metric ton.  Fine, you say, it’s a hundred kilobucks worth of business. We’ll go in the lab and front run a process. This way we’ll be able to give the customer a qualification sample, and just as importantly, get an idea of the process economics.

The chemist does a representative front run and reports the following.  The process produces 68 % isolated yield of off-white powdered solid that has clumps, 1H-NMR shows that it is 98.3 % pure and it has 0.5 % residual solvent.  The product is a first crop and the solvent is a high boiler like toluene. Analysis of the mother liquor shows that there is an additional 21 % of product remaining with the balance of the mass as unidentified colored components. 

This is a node in the decision process for the manufacturer.  From this result, we have to make a business case to go forward or decline and offer a “No Quote”.

The customer has expressed a preference for a pricing set point of $100 per kg for a metric ton.  It is hard to know if this price and volume are just posturing or if they are firm numbers.  More often than not, the customer will decline to disclose an upper price limit.  Remember, the buyer’s job is to get the lowest price and the sellers job is to get the highest profit.  It is common for a buyer to ask for a quote on a volume higher than they intend to order just to see where the price/volume curve flattens.

The first thing to notice is that the first crop fails to meet the specifications all around. Low purity, high residual solvent, off color, and clumps of powdery material instead of free flowing crystalline product. A estimate of the cost of manufacture suggests that the raw material cost is about $38 per kg and the labor and overhead cost is $52 per kg. The first pass doesn’t look good- estimated costs are ~$90/kg for off spec stuff.  Irrespective of the product’s compliance with the spec, if your sample is truly representative it might be worth sending a sample to the customer anyway.  You never know. The customer may recoil in horror or find that it works in their process despite being “off-spec”. 

It is at this point that the sales or business development manager has to make a decision- Are there any insurmountable problems with the front run?  If not, we have to decide if we want to risk R&D time to do process development to tweak the process to give product that meets the spec.  Remember, time = money.

The good news is that the purity is only slightly low, the residual solvent can be pumped down in a vacuum oven, and the clumps can be sieved out. But remember, too much “polishing” will tend to increase labor costs per kg of product. 

The color appearance is another matter.  It might be resolvable within the customers price constraint, or not. The transition from off-white to just white can be a difficult change. Whiteness is surprisingly subjective and dependent on particle size. And, particle sizing can involve a lot of art.  If the product were a $100,000 per kg pharmaceutical, there would be much more motivation to get the color right. Remember, it is only a $100,000 sale. One could easily burn up all of the profit in an prolonged period of process development and pilot plant time before you even sell the first kilogram. 

Product appearance would be a good candidate for negotiations with the customer. Try to get them to give up white for “white to off-white”.

The price is another problem.  It is too low.  It is desirable to have 20 % profit after interest and taxes, just like the pharmaceutical folks report.  A good rule of thumb is that the total manufacturing cost should be approximately 50 % of the price or less.  This is highly variable and subject to the company’s accounting practices.  So, just for arguments sake, let’s say that we need to get the price to equal twice the cost. 

To come in with a reasonable profit, we have to get the manufacturing cost down to $50 per kg.  The raw material costs were calculated at $38 per kg. Raw material costs are the least flexible, so that leaves little room for labor costs at a targeted $50/kg mfg cost.  The good news is that the labor costs are higher than the raw material costs, so at least there is some hope for bringing the total cost in line.  Labor costs can be brought down with processing experience and innovation. The learning curve is real and good plant manager can bring labor costs down over the product lifetime. 

In this circumstance, I would vote that we go forward with the product if we can initially keep the mfg costs at 65 % of the price or lower.  I would also vote that we send a representative sample to the customer for evaluation. In the mean time, we can do a bit of R&D to find a better process. 

Finally, one of the business risks for a manufacturer is the issue of “specification creep”.  Initially, a manufacturer will agree to produce a new product with a particular set of specifications. However, if the customer is simultaneously developing their use of this chemical in their new product while you are developing this chemical process, a gap in specifications might occur.  In other words, the customer might begin to tweak the product specs while you are in the middle of process development. 

The customer will call one day and try to add a specification. They will find that a previously obscure side product will present a big problem for them and they’ll indicate that the project will require higher purity.  Well, this might be a big problem, or not.  If it requires a tighter fractional distillation, assuming you can do it, this will probably add labor costs. If it requires further decolorization or reduction of residual solvent, R&D will be required to validate the changes to your process.  It is actually a big deal.

So, why not just say “NO”?  Well, in all likelihood, you have not been paid yet.  Few customers will pay for development in advance. Those costs have to come out of future sales.  It is a lot like boiling the frog. You just ramp up the temperature imperceptably and the frog never notices that he is being cooked.  The same effect can happen with specification creep.  By being willing to work with the customer you’ll find that at some point it becomes too costly to go forward at the arranged price. 

At this point you have arrived at the hardest part of doing business- the part where you have to say NO to a customer.  Some people can’t do it. Honestly. But if you want to survive, you have to set boundaries. The customer will understand.  This is where good communication skills come in. It is always desirable to give bad new earlier than later.

NaBH4 Reduction of Esters

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What new things are there to say about sodium borohydride?  Very little, really.  I have to say that I was generally unaware that NaBH4 had utility in the reduction of esters.  The Gray Beast or Lucifer’s Hydride- LiAlH4- has always been the reagent of choice for carboxylates.  But while enroute to other applications of NaBH4, I stumbled upon a few recent references.  This is why I like to browse.

A 2006 article by de Souza in ARKIVOC, reports that aliphatic and aromatic esters are cleanly and rapidly reduced by NaBH4 in methanol/THF.  OK, that’s nice (yawn). Other references to ester reduction can be found dating back at least to Persterfield in 1965 and references therein to 1961.  It’s obviously not new, but I do think that it is relatively obscure.

Reduction of benzylic ketones and alcohols as well as assorted amides in acidc media to form the corresponding -CH2- or N-alkylation product was reviewed by Gribble at Dartmouth in 1998. 

Well, here is the reason for my excitement.  I did some pricing and found that the $/hydride cost of NaBH4 is approximately 25 % that of LiAlH4 at the bulk scale.  That’s a big deal.  What is a bigger deal is that NaBH4 is arguably safer to use than LAH and you can run reactions in water, MeOH, and various combinations of other solvents.  Kill the excess hydride with aq NH4Cl and you’re off to the races.  Though I dearly love and respect LAH, handling bulk material as the solid or as an Et2O or THF soln brings unfortunate hazards to the plant. And, LAH quench can lead to large volumes of pasty aluminate solids that present serious filtration issues. 

I’m sure that a lot of hot shots out there knew this, but it was new to me.  The great breadth of reactivity of NaBH4 as well as its stability to protic solvents provides many useful possibilities for the process chemist. The ability to run a reaction in methanol as opposed to anhydrous ether or THF can provide cost, safety, and competitive advantages for a manufacturer.

1/25/09. Update. US patent 2,765,346 teaches a process wherein Na or K BH4 in THF is treated with LiCl to form a composition that reportedly reduces a variety of esters to the corresponding alcohols. Examples of selective ester reduction are ethyl benzoate, butyl stearate, and ethyl p-nitrobenzoate. While I have not personally tested this process, it seems plausible enought to try.

Teaching College Chemistry in the Internet Age

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It has been 10 years since I was an Asst. Prof. of Chemistry.  My jump to the dark side (business) has largely disconnected me from the latest trends in chemical education. Much has changed in regard to information technology.  Students now show up in class with laptop computers and cell phones. They didn’t 10 years ago.

I do have a question in regard to the Internet and how it may add or subtract from use of the literature.   Are students referencing web sites in lab writeups or papers? How does that work? Just what kind of legitimacy does the internet enjoy today as a “reference”?  How has the internet affected how we archive information? 

And just how do you handle the matter of students and their cell phones?  Calls and text messaging could be pretty disruptive to the classroom.

Hu- The Human Element

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We’ve all seen the ad on television with it’s folksy music and mosaic of compelling images while the voice-over waxes philosophic about the “Human Element”. It is a very well done piece of public relations art.  The theme is that the practice of chemistry is ultimately about serving people.  I’m inclined to agree, though the ad does gloss over the imbalance between service to the stakeholders and the shareholders.  But that is the general state of affairs with the whole of the corporate world.  We’re all stakeholders, but only a few are actual shareholders.

Few people outside our field associate chemistry with the term “high technology”.  That is commonly reserved for medicine, electronics, and aerospace.  Just look at any news outlet or magazine. If it ain’t happenin’ in space or in the hospital or it doesn’t involve TV or cell phones, it is too boring for words. 

But in fact, chemistry deserves to be in that elite group as well.  We chemists know that the ballyhoo about advances in medicine typically resolve to advances in the chemical sciences.  It’s the same for electronics and even aerospace because they rely heavily on the material sciences. OK, so our chosen field is not the object of admiration. We’re probably better off for it.

It is an understatement to say that the human element is important.  My observation is that resolving issues with the other elements is almost always easier than issues relating to this one element- Hu.  Using it to titrate buy-in, cooperation, or just help often requires the most subtle interactions and the results can be spectacularly non-linear. 

Sometimes Hu is refractory, other times it is pyrophoric.  It can be most agreeable, or not.  I still do not understand it very well.  But I’ll keep trying. 

Chemical Business Development People

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Any chemical manufacturing business has a sales group.  Sales people will sell existing products, that is, products for which the manufacturing facility already has a process.  It is relatively straightforward to sell existing products.

If your company is so disposed, the sales group might also market its ability to take on new projects.  To sell this kind of capability you need a special kind of sales person.  Many companies call such sales people “Business Development” managers. Such people almost always have a strong technical background and a desire to interact with customers. 

A business development manager is a special kind of animal.  In addition to their technical ability they must have a wide range of general business skills.  Such a person must have a thorough grasp of all phases of manufacturing- R&D, pilot plant, semi-works, and production.  This intimate understanding of manufacturing is not limited to just the technical aspects of making a proposed material to specifications.  There is raw material sourcing to be done as well as the generation of an economic model of the proposed process.  And, before you can even offer a product you have to do your due diligence in the intellectual property arena. 

The business development person must somehow mesh the customers price and delivery requirements with the company production timeline. For the development of a new product,  a company needs a process that operates at scale.  To get a scaled-up process, it has to have a process validated at the pilot plant scale.  To get a pilot scale process, the company needs its process bench chemists to pony up a process that is cost efficient and safe. 

The practice of business development will involve math.  Costing and pricing are two economic activities that will put you in contact with accounting and with upper management.  This is where the job can become highly stressful.  Your company will probably have costing numbers that are reasonably accurate.  I say probably because there is some philosophy involved. 

Your accountants will use GAAP- Generally Accepted Accounting Principles.  I’m not an accountant and I have no aspirations to be one.  All I can say is that the allocation of costs to a given product, at least in a multipurpose facility, will involve some assumptions about how to partition resource costs to any given process.  The previous sentence can be the source of incredible confusion for companies.  The method by which costs are allocated can lead to numbers that are unrealistic on either the high or low side.  Overly low numbers can lead to pricing that is too low to sustain the operation.  Overly high numbers can lead you to offer quotations that are not competitive. Both circumstances are not desirable.

A business development person must be intimately familiar with all phases of manufacture.  Fundamentally, business development people are show horses.  They represent their company on site and at meetings and conferences off-site.  A business development person must have excellent communication skills, be an effective public speaker, and be in command of details in diverse fields.  And, it really helps if you have some savoir-faire.   Personal skills like the ability to listen, to carefully drill into customers and competitors for specific details without being rude or creepy.  It helps to be able to dress well, understand decorum, and display good manners.  It is better to be sincere and risk being taken advantage of on occasion than be cagey and deceptive. This kind of thing does really matter. 

Many chemists out there who have yet to hatch from the academic and post-doc world may not have heard of this job description. Other manufacturing arenas may use engineers in this capacity. In the chemical manufacturing field, chemists can step into this type of activity and be in the center of the activity and at the edge of technology all at once. Having done it, I can only encourage fellow chemists to consider it as a career path. 

Isotope Mojo Blues

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Near as I can tell, there is some kind of demand in the marketplace for all of the elements from 1 through 92, with the exceptions of Pm, At, and Rn, I suppose. It is hard to gauge the trade in actinides since precious little gets outside the realm of government regulatory frameworks. Clearly there is demand for certain isotopes of Th, U, and Pu.  But the nuclear regulatory people keep a tight reign on that stuff.

I remember a pottery class I took some years back in a nearby town. I was snooping through the pottery stockroom looking for glazes and what did I find? I found a sizeable quantity of Thorium nitrate.  These hapless middle-aged, post-hippy era, meadow muffin starving artisans running the co-op clearly had no idea that they had an actinide a nuclear-age artifact in their midst. Obviously, it had been secured for colored glaze applications.  I warned them about it but was met with the cow-in-the-headlights-look. I call it the “bovine stare”.  So, I brought a GM survey meter the next week and opened up the jar with a few of them standing there. As the clicks ramped up from the beta’s and as I switched the attenuation to keep the needle on scale, I thought I heard the unmistakeable faint slapping sound of multiple sphincters slamming shut.

The first question was “Would I like to have it?”.  Pppffffttttt!  “Hell no!” says I.  Nuclear cooties. Jesus H. Crimony!!  I did a careful survey with the GM counter and found that the surrounding area was clean. The material (early 1960’s vintage by the looks of the label) had hardly been used, so I was confident that contamination was not too bad, if indeed there was any. There may have been alpha emitters but this counter wouldn’t pick them up.  I gave some names of hazardous waste vendors and a stern warning not to drop it or spill it.  That’s the last I heard of it.

I remember a seminar in grad school when a visiting rock star from ETH gave an organic seminar detailing the use of Li-6 in NMR studies.  The fellow lamented in his fastidious German/Swiss accent that it was difficult to get Li-6.  He also said that for a time much of the refined Lithium in the market place was depleted of Li-6.  It would be interesting to hear someone comment on the accuracy of this. 

Cash is King

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It is tough being a small company or start-up.  You have perpetual cash flow concerns and maintaining a big enough plug of working capital is always difficult. Add to this the fact that larger companies tend not to take you seriously on either the buy or sell side. 

Selling to a company that is much larger is often challenging.  They are often skeptical of your ability to deliver; they want to throw their weight around by dumping outrageous terms and conditions on the table; and they may want you to “invest in the relationship” with freebies like holding inventory, unpaid R&D, free R&D samples, or a dozen other things. 

One of the common purchasing tricks is to ask for wide range of volume pricing. That is, ask for the pricing of 1, 10, 100, and 1000 kg of a product.  What they will do is to look at the largest volume price as a sort of floor or asymptote price and then begin to ask for lower quantities at that price.  They know that you can offer the material at the low unit price one way or another, so why not ask for smaller quantities there as well?  This can be a very effective leverage when negotiating price with a vendor, that is, the knowledge of their fall-back pricing. 

As the manufacturer you are well aware that the economy of scale only works if you actually manufacture at scale.  Many manufacturers of specialty chemicals may not actually keep certain products in inventory. If their sales history is spotty or if it is relatively obscure, there is no way to predict demand.  So, dumping capital into finished goods that sell poorly is a bad decision most of the time.  When you do not carry a product in inventory, that is, you only make it on demand, your hands are tied in price negotiations.  You just can’t rationally offer 10 kg at 1000 kg pricing.

Another difficulty is invoicing.  It is almost always the case that the vendor will have to pay for raw material in advance, hopefully with commercial credit terms like 30 days net.  And no matter what, payroll has to be met.  So the manufacturer has to commit resources up front for a given sale. Only when the product goes on the truck can the vendor issue an invoice.  This is all reasonable and expected.

It is possible to go to your banker with a purchase order in hand and apply for a short term loan to fund the manufacturing costs.  It is important to get to know your banker well. If they have confidence in you they can help you out during tough times.

Typically, payment is due 30 days after the product ships.  Some companies will insist on starting the clock when the shipment arrives. For shipments in the states, this isn’t such a problem. But for shipments involving boats it can present cash flow problems given the month-long transit time.  Incidentally, companies that use the SAP accounting system will have requirements that will be as fixed and unchangeable as the very ground you stand on. 

It will usually transpire that the manufacturer will have to pay for raw materials and payroll well in advance of payment.  This is normal.  One of the ways you get into trouble is when raw mats show up too early or too late. Raw mats that show up too early will require payment sooner and raw mats that show up too late will delay manufacture.  Timing is important. 

Another kind of financial trouble you can encounter is from late payment or even nonpayment from a customer. Late payment gives rise to all kinds of trouble for any company, but especially for small, capital-deficient companies.  Receivables accountants maintain an aging chart for invoices.  After 30 days, the receivables person will begin to get nervous and get on the phone to roust the customer for payment. After 60 days, people are getting jumpy about payment and after 90 days there may be calls to the customers president or controller. 

When a company has a cash flow problem, they will direct whatever cash they have into their most critical expenses in order to keep the place running.  Your invoice may not be at the top of the list.  When you encounter this problem with a customer, it is important to keep your cool and try to get whatever they can afford to send. Chances are good that they are already twittered about it so threats and heavy handedness may be a waste of time.  But often it is the squeaky wheel that gets the grease (or lucre) in these circumstances. So it is always worth talking to the customer about payment.

This whole business of pricing, invoicing, and getting paid is deadly serious and the inability to do it well will shut a company down quickly.  We technical people often discount the accounting end of our business, perhaps believing that it is the domain of lesser skilled persons.  Successful companies, however, know that a good accounting group and clear policies are crucial for stable operation.

Start-up companies, however, may not pour resources into accounting systems as generously as they should.  Often, it is the founders who do the accounting themselves in the early days.  Eventually, the founders realize that they need book keepers and accountants to manage all of the cash flow issues.