Bankrupt Solutia has retained investment-banking firm Rothschild Inc. to explore a possible sale of most of its pharmaceutical services division.

The business generates about $50 million in sales annually, representing about 2% of Solutia's total, and is a relatively new business for the company. It entered pharmaceutical services through a spate of acquisitions several years ago.

The sale would include Switzerland-based CarboGen Laboratories, which Solutia bought in February 2000. CarboGen provides clinical quantities of active pharmaceutical ingredients (APIs) for early trials of pharmaceuticals, and it conducts process research.

	FOR SALE Solutia pharmaceutical division employees work in a chromatography lab in Switzerland. SOLUTIA PHOTO

Also on the block is Swiss firm AMCIS, which Solutia acquired after CarboGen. AMCIS provides process development as well as current Good Manufacturing Practices production of pharmaceutical intermediates and APIs--all services downstream in the drug development chain from CarboGen.

At the time, analysts balked at these acquisitions, pointing to chemical companies that were exiting fine chemicals. Solutia insisted, however, that it was forming a unique combination of businesses that would hand off clients to each other as drugs progressed through clinical trials.

Subsequently, the unit has faced difficulties. Solutia took a $78 million charge for its pharmaceutical services unit to write down intangible assets. These charges were "precipitated," the company said in a filing with the Securities & Exchange Commission, "by the declining estimates of forecasted results given current economic and market conditions within the pharmaceutical services business environment."

Solutia does not plan to include Axio Research Corp., which provides clinical trial data management services, in any sales deal for the unit.

In December 2003, Solutia filed for bankruptcy under the weight of liabilities from 1997 spin-off parent Monsanto--items such as retiree benefits and a class-action lawsuit concerning polychlorinated biphenyl contamination in Anniston, Ala.

Solutia isn't the only company exiting fine chemicals. Kemira, which is changing strategic direction, has agreed to sell its fine chemicals business to London-based venture-capital firm 3i for $85 million (C&EN, July 12, page 11)