Key Company News
(June 2013) In a decision that is a setback for the pharmaceutical industry, the US Supreme Court has ruled that antitrust regulators should be able to challenge the arrangements that allow drug makers to delay the sale of a generic drug. In deals known as “reverse payments” or “pay for delay,” brand-name drug makers facing a patent challenge from generic competitors pay them to temporarily stay out of the market. Last year, there were 40 patent-dispute settlements between brand-name and generic drug makers involving a payment to the generic firm and restricted sale of a generic medicine, according to the US Federal Trade Commission (FTC.) The agreements related to 31 brand name drugs with yearly US sales of more than $8.3bn, the agency said.
(June 2013) Bloomberg says Chinese consumers spend about $183bn on pork a year, favouring pig head, feet and offal that aren’t popular on US menus. The nation’s farms are mostly small, which combined produce about five times more pig meat than the US China’s food industry had been wracked by scandals ranging from tainted milk to the illegal dumping of hogs in rivers. Last month, Smithfield Foods, one of the biggest pork producers in the US, agreed to be bought by China's Shuanghui International Holdings Ltd. The deal, which still faces a federal regulatory review and Smithfield shareholder approval, is the largest takeover of a US company by a Chinese firm, valued at about $7.1bn, including debt.
(June 2013) Novo Nordisk, the Danish pharmaceutical giant, dates from the 1920s and had its genesis in two small Danish companies Nordisk Insulinlaboratorium and Novo Terapeutisk Laboratorium founded in 1923 and 1925, respectively. The companies started the production of the revolutionary new drug insulin that had just been discovered by two Canadian scientists. Today Novo Nordisk, the world's biggest maker of insulin, has 35,000 employees across the globe, including some 15,000 in Denmark, and has been slapped with a 5.5bn Danish crown ($1bn) tax demand involving the use of Switzerland for tax avoidance.
(May 2013) Merck's Januvia blockbuster diabetes drug, which made revenues of $4bn in 2012 and similar drugs for Type 2 diabetes, that make in total $9bn, are under scrutiny because of studies linking them with pancreatic cancer. Meanwhile, the top-selling class of blood-pressure drugs is under attack from an unusual source: a senior regulator at the Food and Drug Administration. Bucking his bosses, Thomas A. Marciniak is seeking stronger warnings about the drugs known as angiotensin receptor blockers, or ARBs, according to internal documents reviewed by The Wall Street Journal.
(May 2013) The pace at which the United States produces $100m companies has been stable over the last 20 years despite changes in the economy. However research shows that the locations and sectors in which those companies are created are changing. While information technology is important, it is not the most important contributor in percentage terms to the $100m firms in the United States on a founding cohort basis. Instead, the largest contributors, in percentage terms, are consumer discretionary and industrials. After all, the consumer discretionary and the industrial sectors are the largest non-government segments of the US economy, so it stands to reason they produce more companies, many of which, in turn, go on to become large and successful.
(May 2013) Nokia, Europe's once lone global consumer electronics champion, became the world's biggest mobile phone handset manufacturer in 1998 and in 2001 when the company’s individual share value stood at over €65, Nokia accounted for 4% of Finland's national GDP and contributed over a billion euros in tax revenues. The company's employment in Finland peaked in 2005 at 24,000 and in the key smartphone market Nokia is now a minnow with a low single digit market share compared with the giants Samsung and Apple. Rovio, the company behind the Angry Birds game app for smartphones, has become the second most well-known Finnish high-tech company in recent times.
(May 2013) Microsoft is preparing to perform a U-turn over key aspects of its much maligned Windows 8 operating system. PC shipments plunged in the first quarter of 2013 and confusion following a major overhaul of Microsoft’s operating system, Windows 8, in late 2012 is seen as accelerating the blues.
(May 2013) Following last week's announcement by Apple that it would buyback a further $55bn in shares to make a total value of $100bn over the next two years, the electronics giant raised $17bn through the sale of a corporate bond on Tuesday, avoiding drawing down $102bn of its cash hoard of $145bn that is technically overseas. It saved a $9bn tax bill through that manoeuvre. Apple made a tax provision of $713m on its foreign pre-tax earnings of $36.8bn in 2012, giving the company a foreign effective tax rate of 2%. As its main global operations centre outside the Americas and China, is in Ireland, a big chunk of the foreign earnings would have been routed through Ireland.
(May 2013) In July 1995, a former hedge fund executive launched a website that aimed to upend the traditional way of selling consumer goods, starting with books but soon expanding into a diverse array of products. Dubbed Amazon.com, Jeff Bezos’s business went on to disrupt not only the way people typically shop, but also the book publishing industry itself, en route to becoming the world’s largest online retailer. It now serves as a prime example of how technology can enable innovative companies to fundamentally rethink the way business is done, as opposed to merely optimising existing processes.
(May 2013) High CEO pay and benefits has been in the news again with Marissa Mayer reported to have been awarded total pay of $36.6m for her first six months as chief executive of Yahoo! even as the internet company’s board made efforts to quell shareholder anger about excessive pay. This week Alfredo Sáenz (70) resigned as chief executive of Banco Santander with a €88.2m pension pot he has to survive on. Then there is Ron Johnson, a former Apple manager and now fired CEO of JC Penney, the department store group, who made an astonishing 1,795-times the average wage and benefits of his department store workers.