Shareholders willing, Britain's Imperial Chemical Industries plc (ICI) will "demerge" this spring into two separate companies.

The split would sever ICI's burgeoning bioscience activities from the more traditional paints, explosives and commodity chemicals for which the company was founded in 1926.

In making the announcement on Thursday, Denys Henderson, company chairman, said, "The board of directors has unanimously recommended that ICI should now proceed to put to its shareholders formal proposals for the demerger of Zeneca (the name of the future biosciences successor concern)."

Zeneca began as a wholly owned subsidiary on Jan. 1 to take over R&D, manufacturing and marketing of ICI's pharmaceutical, agrochemical and specialty products. Of these, the first two have a hefty biotechnology component.

"Zeneca is a word coined in Britain," ICI's North American media relations manager, Bill Warelis, told BioWorld. "It combines the concepts of "zenith," alchemy and chemistry." He added that "demerge" is also an Anglicism, denoting the opposite of "merge."

Henderson, who remains chairman of both companies, also announced that Zeneca's first independent act would be to launch an initial public offering, to raise some 1.3 billion (approximately $2 billion) "to reduce its indebtedness to ICI."

He explained, "Our decision to proceed with the demerger was directly attributable to meeting the changes taking place in the chemical industry, exacerbated by the recession."

Among the non-executive directors named to serve on the truncated ICI's future board is economist Paul A. Volcker, chairman from 1979 to 1987 of the U.S. Federal Reserve Bank.

Peter Doyle, ICI's research and technology director, will be one of Zeneca's executive directors. Doyle was chairman of the seven-member advisory group on biotechnology, a high-level lobby at the European Economic Commission.

In the U.S., Zeneca is absorbing businesses previously part of ICI, Americas Inc. It will become a $2.6 billion enterprise, with 8,000 employees and 52 R&D and manufacturing sites in the U.S.

Zeneca inherits from its parent company a tradition of biotechnology ventures going back to the beginnings of the industry:

-- In 1980, ICI was one of the few R&D companies to clone alpha-interferon.

-- In December 1979, it edged out General Electric to become the first to claim a biotechnology patent in Japan. (GE's entry was the Chakrabarty oil-eating patent.)

ICI's patent-seeking invention was a method of producing microbial single-cell protein. Based on experience fermenting antibiotics from microorganisms, ICI scientists constructed a bacterium, Methylophilus methylotrophus, which converts methanol, ammonia and air into a nutritious, edible "Pruteen," intended for human consumption.

A decade ago, the company assembled a massive fermenter at its site in Billingham, England. It was rated the largest continuous monoculture fermentation unit in the world.

Pruteen, however, was derailed as a new food and fodder, by adverse economic costs and market factors.

In the early 1980s, ICI invested $200 million in a plant, Marlborough Biopolymers, to make bacterial "BioPol," a degradable plastic, from polyhydroxybutyrate and alkanoate. It has been commercialized for producing surgical sutures.

And on Feb. 4, the European patent office of the World Intellectual Property Organization published the full text of an ICI patent application, WO 93/02194, which claims genes for polyhydroxyalkanoate synthase, expressed by Chromatium vinosum.

Other ICI (now Zeneca) agricultural biotechnology patent applications disclosed in recent months cover herbicide- resistant plants, anti-glyphosate bacteria, control of gene expression in plants and modified ripening in tomatoes.

In the pharmaceutical field, disclosures concern diagnosis and therapy of Alzheimer's disease, plasmin-inhibiting antibodies and ricin toxin chains for monoclonal-conjugation, and multifunction expression vectors.

-- David N. Leff Science Editor

(c) 1997 American Health Consultants. All rights reserved.