When big commercial leases get close to expiring, the negotiations to entice an employer across town, the city line or the river can gain a public profile.

That happened in 2003, when Towers, Perrin, Forster & Crosby Inc. was looking to relocate its pension and health and welfare administration services operation in Voorhees.

The bistate jockeying ended with the privately held firm picking Cherry Hill, keeping 1,100 jobs in South Jersey. Towers Perrin moved into a renovated steel factory, taking 200,000 square feet of office space.

So I was curious what happened to that operation following the news last week that Stamford, Conn.-based Towers Perrin would be merging with Watson Wyatt Worldwide Inc. in a transaction worth about $3.5 billion. After all, Towers Perrin said its Center City office was its biggest with 1,016 employees.

What happened to the Cherry Hill operation is that Towers Perrin had sold its last remaining interest in the business about a month ago, said spokesman Joe Conway.

Less than six months after making that move from Voorhees, Towers Perrin agreed to sell 85 percent of its interest in its human- resources outsourcing business to Electronic Data Systems Inc. That deal, under which EDS paid $420 million, closed in March 2005, and the business was renamed ExcellerateHRO.

In May, Towers Perrin sold its remaining stake to EDS, now a unit of Hewlett-Packard Co. Terms for that deal were not released.

A Hewlett-Packard spokeswoman would not disclose how many people ExcellerateHRO employs in Cherry Hill, saying it was company policy not to provide employment numbers by business unit or location.

Heading to work

Despite a bad job market, there’s always room for interns, right?

About 1,000 Philadelphia students will start their six-week paid internships at 120 local employers today. It’s the third year for the Greater Philadelphia Chamber of Commerce’s involvement in a program managed by the Philadelphia Youth Network.

Employers either contributed positions in their workplaces or funding for positions at nonprofits.

The recession has meant fewer internships this summer than last, when 1,500 students participated.

When bad news strikes Discovery Laboratories Inc., the company always seems to lose half of its market value.

Shares of the Warrington biotechnology company sank 53 percent on April 25, 2006, when it announced a significant delay in winning approval for its first product, called Surfaxin.

On May 2, 2008, shares fell 50 percent after the Food and Drug Administration issued an “approvable letter” for Surfaxin. While the name of that document sounds positive, it actually means a company has more work to do before its drug can be sold commercially.

Plus, that was Discovery Laboratories’ third approvable letter for Surfaxin, which is a respiratory treatment for premature infants.

Shares declined nearly 50 percent on April 20 after the company said the FDA had once again requested more information, and a June 2 meeting was set to hash out their differences.

Yesterday, it happened again after the firm discussed the outcome of that meeting. Given that Discovery shares fell 52 percent to 51 cents, you already know that the company failed to persuade the FDA staff to see things its way.

The bottom line: Surfaxin most likely will not be approved without a new limited clinical trial.

While Discovery Labs said it might appeal the decision through the FDA’s formal dispute-resolution process, the company does not want to spend millions on new tests.

Management told analysts in a conference call it would rather focus on two other products at earlier stages of development.

In a statement, Discovery chief executive officer Robert J. Capetola described plans to begin late-stage clinical tests on Surfaxin LS and Aerosurf in 2010.

But as of March 31, the company had only $19.1 million in cash. In a Securities and Exchange Commission filing, Discovery did say it had “committed equity financing facilities” that could enable it to raise up to $77.3 million.

Kimberly Lee, an analyst with Wedbush Morgan Securities Inc., downgraded her recommendation to “sell” on Discovery shares. Lee said she saw too many issues for it to overcome: financing, regulatory, and development risks. She projects the company will run out of cash during the third quarter, unless it finds a way to access funds through those CEFFs.

The bigger the car maker, the harder the sales fall.

The U.S. vehicle sales numbers for June fell short of expectations, missing the 10 million annual rate the bailout twins, Chrysler (down 42 percent) and General Motors (down 33 percent), say they need to break even.

But several smaller companies continue hold their own in 2009, including Cherry Hill’s Subaru of America Inc. For June, Subaru’s sales were 18,620 units, up 3 percent. For the first six months, its sales are down only 1 percent.

But being small doesn’t insulate every brand from double-digit declines. BMW’s Mini USA unit, based in Woodcliff Lake, N.J., reported June sales of 4,105 cars, down 21 percent.

Of course, perhaps Mini is too mini, with only 83 dealers in the U.S.; in contrast, Subaru has 600. Mini said it plans to add 17 dealerships during the next 18 months, including one each in Mount Laurel and Allentown, Pa.

Beat It

Investors can be merciless when a company management that has reaffirmed its financial outlook decides to lower it eight days later.

That’s what CardioNet Inc. did Tuesday evening. Yesterday, its shares, which trade under the symbol “BEAT”, fell 42 percent to $9.57 from $16.32 the day before.

Randy Thurman, CEO of the Conshohocken provider of wireless cardiac monitoring devices, faced analysts on a conference call yesterday, and it was far from the clubby atmosphere that marks many such gatherings.

CardioNet cut its adjusted earnings per share to 30 to 35 cents from 69 to 73 cents, and cut its revenue outlook.

Ninety percent of the reduction in revenue can be blamed on “downward pressure” by commercial insurance payers, Thurman said.

Several times, Thurman referred to CardioNet’s role as a pioneer in wireless medicine, a field so new everything is in flux, including insurers paying for it.

What’s going on with commercial insurers should be “a mere bump in the road for those committed to the potential for wireless medicine,” he said.

But the reaction of investors, so close to the Fourth of July holiday weekend, showed little patience with the health-care “revolution” that Thurman described.

Forget for a moment the lagging economic indicators, such as employment, and realize that conditions are better than they were eight months ago.

Disaster has not occurred.

I’m not ready to hang a “Mission Accomplished” banner outside the Federal Reserve, because the job is not done and the bill has not come due.

Lately, there’s been a lot of handwringing over how the Fed will exit from all the rescue efforts it’s undertaken. Most Fed officials haven’t touched the topic, because they want to stress their pursuit of policies that encourage economic growth. That can feed the nightmares of the Inflation Generation and spur lively debates among camps of economists.

So James Bullard, president of the St. Louis Fed, deserves credit for coming to Philadelphia yesterday to talk about those “exit strategies.”

Bullard told the nonprofit Global Interdependence Center the Fed’s liquidity programs, such as those for the commercial paper market and foreign currency swaps with foreign central banks, should spur no worries because there are signs that use of them is decreasing.

What is of concern is how the Fed is going to unwind the $1.75 trillion asset-purchase programs it launched earlier this year. It’s been buying the agency debt of Fannie Mae and Freddie Mac, and longer dated Treasuries through “reserve creation,” Bullard said. You know it better by the phrase “printing money.”

The central banker’s handbook says that if you permanently double the money supply, you will eventually double the price level. Should the Fed do nothing, in the near term inflation would remain benign. But, in a video on the St. Louis Fed Web site, Bullard explains that 10 years out, inflation could be expected to run at 7 percent a year.

The challenge for the Fed is not only when to sell those assets before inflation takes hold, but also to manage investor expectations of inflation. Expectations are powerful forces. If lots of investors think inflation is going to be higher in the future, they push up long-term interest rates today.

Bullard’s speech is a sign that the Fed takes those expectations as seriously as that mountain of mortgage-backed securities growing in its vault.

Put two big pharmaceutical companies together and people notice, but two large benefits consulting firms …?

Well, I only noticed this billion-dollar deal because one of the consulting firms is Towers, Perrin, Forster & Crosby Inc., which was founded in Philadelphia in 1934.

Now based in Stamford, Conn., Towers Perrin is one of those “quiet giants” in Philadelphia business circles. It’s been a major tenant in the Centre Square office building at 1500 Market St. since 1975. And that office remains its biggest, employing 1,016 people, or 16 percent of its total workforce.

Towers Perrin is quiet, for one thing, because it’s a private company. But while Philadelphians frequent the convenience stores of the privately held Wawa and the concession stands at arenas run by privately owned Aramark, they are largely unaware of how Towers Perrin may intersect their lives.

Towers Perrin’s game is providing management consulting services, which means it employs lots of actuaries, risk managers, and employee benefits and insurance professionals.

On Sunday, Towers Perrin agreed to merge with the publicly held Watson Wyatt Worldwide Inc. in a transaction valued at about $3.5 billion. The resulting organization will be called Towers Watson & Co. and have annual revenues of more than $3 billion.

Watson Wyatt, of Arlington, Va., is the bigger firm with 7,700 employees worldwide, including offices in Berwyn and Philadelphia.

Where’s the exit?

James Bullard, president of the Federal Reserve Bank of St. Louis, will speak in Philadelphia Tuesday about the central bank’s “exit strategies” from the emergency lending programs that have helped rescue the U.S. economy.

It should be a timely lecture, coming soon after Bullard’s counterpart at the Dallas Fed told Bloomberg News on Friday that such strategies are “not ready to be articulated” until the “appropriate time.”

Let’s hope today’s more appropriate.

Amid the too-evident wreckage of capitalism's "creative destruction," signs of business creation continue to show up.

Three new companies won acceptance last week to the business incubator at Drexel University's LeBow College of Business.

An annual competition for admittance to the incubator had already brought 32 companies under the roof of Drexel's Baiada Center for Entrepreneurship since 2003.

The center's Web site lists 15 current residents of the incubator, such as Renaissance Scientific L.L.C., a competition winner two years ago that is developing a microbe- and sperm-killing condom lubricant effective against HIV and other sexually transmitted diseases.

Some of the rest ultimately failed, and eight have hatched from incubation, said Baiada Center director Mark Loschiavo.

This year's winners are:

Stabiliz Orthopaedics, whose organizing team of M.B.A. students - including Doug Cerynik, the director of research in orthopedic surgery at Drexel's medical school - are developing bone fasteners using bio-absorbable materials;

Ranter, a social-networking tool that one of its principals, 27-year-old M.B.A. student Brad Welch, calls a "stripped down application" for texting groups through a cell phone chat window;

Konnect.me, a new run at the concept of business-to-business Web portals.

Each won a modest pot of seed money - Stabiliz Orthopaedics got the most, at $12,000 - along with space in the incubator, and access to mentoring and other support services there.

While they're not ignoring the recession, "I don't see them moping around," Loschiavo said of denizens of the incubator.

"From the entrepreneurs' perspective, they see the economy as just one of the many variables that they have to deal with, . . . one more challenge to overcome," the director said.

"It's going to be more difficult to raise funds in this economy," said Brian Schneck, 24, the other principal of the Ranter texting tool. "The good thing, development costs these days are very low."

He and Welch expect to have a beta version of their would-be Twitter-killer in three months.

Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

Brian Ruby doesn't want you to take this the wrong way, but the recession has been good to him - or at least to his high-tech startup company, so far.

"This has been the absolute best time for us," Ruby, 25, said yesterday before the ribbon-cutting at his nine-person firm, Carbon Nanoprobes Inc., on Phoenixville Pike in East Whiteland, Chester County.

Because of the recession, Ruby said, he's been able to cut deals "that a year and a half ago we never would have been able to afford, and nobody would have funded."

Ruby's entrepreneurial tale begins in 2002 at Columbia University, where he studied engineering and came up with a system for making teeny-weenie structures called carbon nanoprobes.

In excess of $4 million later - money that Ruby said he raised from institutional and angel investors - he is ready to make and market nanoprobes. Researchers use them in the tips of multi-million-dollar atomic microscopes, where they act like little fingers reading the braille code of molecules used in medicines, computer chips, fabric coatings and solar cells.

"A few million dollars and a dozen patents later, we're actually pursuing the marketplace now," Ruby said.

Ruby, who hails from Westchester County, New York, said he picked Pennsylvania after being courted by state officials attempting to lure high-tech ventures - specifically in his case with the deal of a $500,000 investment as part of the Pennsylvania Initiative for Nanotechnology.

He picked the Chester County address for its proximity to the region's pharmaceutical corridor, and for the deal he was able to get on the real estate.

Profit, Ruby insisted yesterday, "is a very near-term occurrence."

"I'm no Marie Antoinette," he said, refering to the headless French royal's alleged quip about letting the poor eat cake if they couldn't afford bread. He understands the hardships the economic downturn has caused, and yet, "I'm not a complainer about the recession."

Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

Our annual look at the region's Top 100 businesses is out today and in many ways reflects the struggles firms have faced as the overall economy shuddered to a halt.

The report takes the measure of local businesses in several categories - market capitalization, CEO pay, employment, total return on investment - to provide snapshots of the corporate landscape from different angles.

A look at the list of companies ranked by total return (on Page 31 of the printed version of the special section, and at http://go.philly.com/top100) is revealing.

Total return is the growth or shrinkage of an investment, including dividends and changes in the company's share price.

By that measure, only a dozen of the 100 public companies on the list had positive results for the 12 months ended June 8.

And the top five provide examples of what it has taken in this harsh climate to impress investors:

1. Republic First Bancorp Inc., of Philadelphia,which is merging with the former Commerce Bank of Pennsylvania to become Metro Bank, returned 64.6 percent in the year ended June 8. The Metro Bank combination is backed by Commerce Bancorp Inc. founder Vernon Hill and led by former Commerce executives hoping to repeat the magic of the old Commerce's growth.

2. Dorman Products Inc., maker of 92,000 low-cost aftermarket auto parts, returned 50.4 percent. In an era that has seen new-car sales evaporate and automakers nationalized, the notion is that people increasingly need parts to patch up the old wagon.

(Philadelphia-based The Pep Boys - Manny, Moe & Jack came in at No. 10. Though its one-year return was just 2.3 percent, it was one of the golden dozen.)

3. J&J Snack Foods Corp. is the maker of snacks including soft pretzels - one of the region's signature comfort foods. Its one-year return was 37.5 percent. (Another regional comfort food contenter, Tasty Baking Co. of Philadelphia, was No. 6 on our list.)

4 Lannett Co. Inc., a maker of generic drugs, returned 26.7 percent for the year ended June 8. In calendar year 2008, Lannett shares climbed 62 percent as the company added new products and consumerism and health-care providers sought low-cost drug alternatives.

5 Destination Maternity Corp., the maternity clothing retailer, returned 19.3 percent as investors figured babies might be more predictable than the economy.

Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

It’s not surprising that executives who once ran a health-care company called Leprechaun L.L.C. would pick an unusual name for their next venture.

But Blood, Sweat & Capital L.L.C.?

Daniel C. Lyons, one of the four partners in the new private-equity firm, said he wasn’t sure who actually came up with the whimsical name. It was the winner from a contest the partners held among their friends and associates.

Their business plan is more serious: funding new health-care services companies. Rather than backing the next diabetes drug, Blood, Sweat & Capital is looking to capitalize on opportunities that the national debate over health reform will spawn.

Lyons said he expects to back new ideas championed by the nurses, allied health professionals and doctors on the front lines of a health-care system often criticized for its inefficiency and cost.

“They see the pain in the health-care system,” he said.

Blood, Sweat & Capital is a virtual company, with Lyons, based in Wayne, its only tie to the Philadelphia area. He retired recently after 14 years as an executive at Independence Blue Cross.

Most recently, Lyons was president and CEO of Veridign Health Solutions, a for-profit subsidiary in Center City that provides “back-office” services to insurers and health plans offering Medicare Advantage insurance coverage.

Based in New York, David Bach, who is CEO of Blood, Sweat & Capital, founded Leprechaun, also focused on Medicare Advantage plans. The other partners - Patrick Aberle in Fort Worth, Texas, and Michael Duffy in the San Francisco area - worked at Leprechaun, which was bought by XLHealth, of Baltimore, in 2007.

Lyons said the partners will use their own capital, but would not say how much they have committed. They intend to invest in the seed-stage range, from $50,000 to $250,000.

Top Dragon

The team of students behind Stabiliz Orthopaedics won Drexel University’s 10th annual Baiada Incubator Competition earlier this month. The medical-device maker gets rent-free space in the campus business incubator for a year, $12,000 in seed capital, and $35,000 in in-kind support, such as legal advice and brand positioning.