Finance and Economic

AstraZeneca PLC said Friday that it will appeal a U.S. court’s finding that it fraudulently inflated drug prices charged to the state of Alabama.

A state court in Alabama ordered the drug company to pay $215 million in compensatory and punitive damages after finding that it had overcharged for drugs for 15 years.

"AstraZeneca maintains that this lawsuit is legally and factually unfounded," the company said in a statement to the London Stock Exchange.

"The case was based on the misleading premise that the Alabama State Medicaid Agency did not understand how drug prices are established and reported."

Alabama Attorney General Troy King King in 2005 sued more than 70 drug companies quick payday loans. AstraZeneca (AZN) was the first case to come to trial. 

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Office supply retailer Staples Inc (SPLS.O: Quote, Profile, Research) is expected to raise its bid for Dutch rival Corporate Express (CXP.AS: Quote, Profile, Research) in the face of resistance, but it is considered unlikely to be prompted by a counterbid.

After several unsuccessful attempts to hold friendly merger talks, Staples bid 7.25 euros per share, or a total of 2.5 billion euros ($3.7 billion), which Corporate Express swiftly rejected on Tuesday.

“Corporate Express is not likely to surrender easily, and we are not sure whether Staples is willing to pay the price required,” said ABN AMRO analyst Mark Pieter de Boer. “We do not believe Corporate Express is a seller below 10-11 euros.”

Working out differences between the two could take time, analysts said, given the lack of a counterbid and difficulty in assessing the Dutch firm’s value.

The offer is widely seen as a first overture, ending months of speculation about Staples’ interest.

Corporate Express shares are currently trading at 7.72 euros, 6.5 percent above Staples’ offer, suggesting the market expects a higher bid freecreditreport. Lifted by the offer, the shares have more than doubled from a year low of 3.18 euros just one month ago.

Analyst Fernand de Boer suggests Staples could pay 8.25 euros for its European rival, while others believe Corporate Express shareholders would not yield for less than 10 euros.

The acquisition would allow Staples to cut costs, increase its global footprint and expand in the U.S., a fragmented market where Corporate Express generates about half its sales. 

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Corporate Express NV on Tuesday swiftly rejected an unsolicited $3.67 billion buyout offer from Staples Inc. as too low, but some analysts expect the strategic advantages of combining the two office products suppliers will yield an eventual agreement.

Staples disclosed Tuesday that it had offered to pay a hefty premium in an all-cash bid for Corporate Express — a proposal that sent the Netherlands-based wholesaler’s U.S. shares up nearly 39 percent. The acquisition would expand Staples’ profitable segments serving business customers and overseas clientele after recent slow sales at Staples’ U.S. stores.

But Corporate Express rejected the offer about two hours after the world’s largest office products supplier announced it.

"Corporate Express is of the opinion that this proposal significantly undervalues the company and fails to reflect Corporate Express’ prospects," the company said how to get a free credit report.
Staples said its offer came after it made repeated attempts to discuss a deal. After Corporate Express’ rejection, Staples declined to comment on whether it might submit a bigger offer.

Bank of America analyst David Strasser said the deal should ultimately go through because of the hefty premium that Staples is offering. Strasser also cited the improved competitive position Staples could gain in both the U.S. and Europe, and greater efficiency from combining warehouse operations with Corporate Express.

"We are highly confident that, despite what could be public posturing, this deal will eventually close, most likely around the current price," Strasser said in a research note.

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MBIA Inc (MBI.N: Quote, Profile, Research) ousted Chief Executive Gary Dunton and replaced him with former CEO Joseph “Jay” Brown as the bond insurer scrambles to overcome mortgage-related losses, maintain a top credit rating and restore market confidence.

MBIA said Dunton, 52, resigned on Saturday, effective immediately.

Its stock rose about 1 percent in early trading.

Shares of the Armonk, New York, company have plunged 83 percent in the past year, and the company has had to sell equity to bolster its finances weakened by exposure to mortgage market losses. MBIA also is battling with high-profile investors betting against its shares.

Brown, 59, in a statement issued on Tuesday said he had spoken to New York State Insurance Superintendent Eric Dinallo, who is trying to broker a solution to the woes of MBIA and its rivals.

“I believe we can look forward to improved dialogue with the department,” Brown said in a statement.

In an interview with CNBC, Brown said he was optimistic that a deal involving New York state could happen in the next two weeks.

Between 1999 and 2004, Brown ran MBIA and its main unit, MBIA Insurance Corp pay day loans. He joined the firm as a director in 1986 and retired last May. 

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When the world’s greatest sporting and marketing event crosses paths with one of the best economic growth stories ever, the result could be the opportunity of a lifetime for corporate sponsors of the Beijing Olympics.

Companies are stepping up, with an eye on China’s increasingly prosperous consumers, some of whom are snapping up BMWs and sipping French wines just 30 years after the communist depths of the Cultural Revolution.

U.S. healthcare company Johnson & Johnson, sponsoring an Olympic Games for the first time as a global partner, ran a contest to reward acts of caring and community service with free trips to the Olympics in August.

Owen Rankin, the company’s vice president of Olympic sponsorship, said it was drawn by the size of China’s market.

“This is the right time to do it,” said Rankin.

The Beijing Olympics and the Winter Olympics in Turin, Italy, in 2006 have already brought in about $4.4 billion in broadcasting rights and sponsorship deals alone faxless payday advances. This figure is greater than the total revenues generated by the 2002 Winter Olympics in Salt Lake City and the 2004 Summer Games in Athens.

“This will be the most successful marketing program ever in the Games,” said Christopher Renner, president of sporting consultant Helios Partners in China. “No question about it.”

German sports shoe maker Adidas, one of 11 so-called “China partners” of the Beijing Games, will pay $100 million to use the Olympics logo in China. 

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Swiss bank UBS shocked markets with tens of billions of dollars in new exposure to risky U.S. mortgages, leveraged finance and complex securities, dramatically raising its vulnerability to the credit crisis.

The revelations, which included $26.6 billion in exposure to U.S. mortgages distinct from subprime loans, sent the bank’s shares tumbling to levels not seen since 2004 as investors braced for even more writedowns.

UBS stock has lost more than half its value since last June after it took $18.1 billion of writedowns in the second half of 2007 alone on subprime-related exposures.

“They have $60-70 billion worth of exposure to troubled areas and the market did not know about much of it,” said David Williams at Fox-Pitt, Kelton in London.

Deutsche Bank estimated that UBS’s total exposure to risky U.S bad credit payday advance. mortgages was $68.7 billion.

“They are in a sorry predicament. They have by far the largest exposure of any European bank and they cannot just trade out of it. The crisis at UBS will last as long as the credit crisis lasts,” said Williams.

Shares in UBS, which said it was facing another difficult year in 2008, were trading down 7 percent at 38 francs at 1500 GMT.

UBS also unveiled further exposures of $11.4 billion in leveraged finance — loans made to fund buyouts of companies — and of $11.2 billion to a complex securitization product called a U.S. reference-linked note program. 

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Chrysler LLC unveiled plans Friday to reduce the number of dealerships in its network, a move that will enable the company to more easily drop unprofitable products.

The goal of the plan, which the company calls Project Genesis, is to have a smaller number of dealers, with each selling all three of the company’s brands: Chrysler, Dodge and Jeep.

Company executives recently completed an eight city tour during which they explained the strategy to local Chrysler brand dealers, the automaker said.

"In the end, we will have a more viable dealer body focused on the customer," Press said in a company statement.

"When that happens, the customer, dealer and company wins. That builds commitment, drives profitability and builds franchise value," he said.

Until last fall, Press led the U.S. operations of Toyota Motor Co. (TM) He is now co-president at Chrysler along with former Chrysler CEO Tom LaSorda.

Chrysler and its parent company, private equity firm Cerberus Capital Management, have already begun sending teams of lawyers and accountants to various major metro areas to negotiate with dealers, according to industry newspaper Automotive News.

Combining the brands into single dealerships would make it easier for Chrysler to cut models from its line up, since it would reduce pressure on the company to produce essentially the same vehicle with modest design changes - something automakers do to ensure that each brand gets a good mix of vehicles for dealers to sell.

Chrysler currently has several car and SUV models that are, in effect, the same vehicle sold under different brands no teletrak payday loans. These include the Chrysler Sebring and Dodge Avenger sedans, the Dodge Caliber and Jeep Compass small cars and the Chrysler Town & Country and Dodge Caravan minivans.

The company wants to reduce the number of different models it makes by as much as half and the number of dealers by up to a third, Alan Helfman, vice president of River Oaks Chrysler Jeep in Houston, told the Associated Press.

The company plans to add some new models to cover areas of the market in which it does not currently compete, Press and Steven Landry, executive vice president of North American sales, told Automotive News.

Chrysler said the company had not set a timeline for the strategy. Because most car dealerships are independent businesses, not directly owned or controlled by the car company, dealership closures must be negotiated one at a time - a process that can take years.

General Motors (GM, Fortune 500) instituted a similar strategy with its Pontiac, GMC and Buick brands starting more than 10 years ago. Today about 80% of Pontiac, GMC and Buick sales go through combined dealerships but there are still many independent dealerships remaining, GM spokesman Dee Allen said. 

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Jerome Kerviel, the trader blamed by French bank Societe Generale (SOGN.PA: Quote, Profile, Research) for huge losses, was jailed while police questioned a broker on whether he knew about Kerviel’s illicit deals.

Kerviel was taken to La Sante prison, close to the centre of Paris, where high-profile suspects such as business leaders and politicians are often held while under investigation.

His lawyer, Elisabeth Meyer, was seen by reporters at the scene leaving the hearing in tears. She said she would appeal the decision of the Paris appeals court.

The court ruled that Kerviel, a junior staffer blamed by SocGen for a $7 billion trading loss, should be held in custody during the investigation because he might try to run or act in concert with any accomplices he may have had.

Meanwhile, police questioned a second person, identified by two sources familiar with the matter as Moussa Bakir guaranteed approval cash advance loans. Bakir works at Newedge, a brokerage formerly known as Fimat that carried out orders on behalf of Kerviel.

Newedge’s offices were raided by police on Thursday. Bakir’s initial 24-hour detention period had been extended by another day, a legal source said.

If the investigation finds that others had a hand in Kerviel’s illicit trades, prosecutors may have new grounds to press fraud charges.

SocGen has maintained that Kerviel acted on his own and SocGen lawyer Jean Veil said it was “premature” to comment on the developments in the probe. 

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Medtronic said on Friday that the Food and Drug Administration approved its drug-coated stent Endeavor.

Medtronic’s (MDT, Fortune 500) stock rose more than 3% on the news. The company said it will launch the product into the U.S. market "immediately."

"We will initiate shipments today," said Scott Ward, president of Medtronic’s cardiovascular business. He said the first stent procedures would happen on Monday.

The approval was not entirely expected, as drug-coated stents have come under FDA scrutiny over reports that they might cause blood clots. But this potentially dangerous side effect has not been proven.

The Endeavor will compete directly with two drug-coated stents that are already on the market: Johnson & Johnson’s (JNJ, Fortune 500) Cypher and Boston Scientific’s (BSX, Fortune 500) Taxus.

Also, Abbott Labs (ABT, Fortune 500) is awaiting an FDA decision for its drug-coated stent, called Xience.

The drug-coated mesh wire stents have been available in the United States since 2003. They are used to prop over arteries during, and after, angioplasty procedures. The older model of bare metal stents is still available. 

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Sigma-Aldrich Corp. said Wednesday that it is expanding a research facility in Cambridge, England, to serve drug development customers in Europe, the United States and the Asia-Pacific region.

The St. Louis-based company said it is adding 7,500 square feet of laboratory capacity to the facility, and reorganizing offices to accommodate the installation later this year of state-of-the-art spectroscopic and diffraction equipment.

It is the second phase in a multi-step development program that in total will cost $600,000.

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