Posted on Wed, Apr. 9, 2008
Business news in brief
In the Region
Ratings cut for Radian, 3 other mortgage insurers
Standard & Poor's lowered credit ratings on four mortgage insurers, including Philadelphia's Radian Group Inc., after concluding that median housing prices would slump 20 percent from their November 2006 peak. Last November, the ratings agency was forecasting an 11 percent decline. Radian's corporate rating was lowered to "BBB" from "A-." The rating on the company's mortgage-insurance subsidiary was lowered to "A" from "AA-." Both remain on credit watch with negative implications. Radian said separately that it would submit a plan to Fannie Mae and Freddie Mac detailing how it planned to improve its financial position. Otherwise, Radian is in danger of being limited in the amount of business it can do with the two government-sponsored mortgage investors. Standard & Poor's predicted that most mortgage insurers would not be profitable until 2010. - Harold Brubaker
FDA criticizes Glaxo on Avandia disclosures
GlaxoSmithKline P.L.C. failed to properly disclose studies of the diabetes drug Avandia in annual reports starting in 2001 and even after the pill was linked last year to a greater risk of heart attacks, according to a warning letter posted yesterday on the Food and Drug Administration's Web site. The FDA also criticized the company's initial response for not saying how it would fix the problem. Glaxo spokeswoman Nancy Pekarek said the firm had improved its processes so that the appropriate data were reaching the FDA. No study kept from the FDA raised new safety concerns, Pekarek said. Glaxo has a U.S. headquarters in Philadelphia. - Karl Stark
Report cites losses in Pa. manufacturing jobs
In a report timed to attract the attention of Democratic presidential candidates campaigning in Pennsylvania, the American Manufacturing Trade Action Coalition said that Pennsylvania has lost 207,300 manufacturing jobs - 24.3 percent of its total - since 2001. The group called on the candidates to address how they would help this country's manufacturing sector and how they would change the rules for foreign competitors, particularly China. "America just simply can't keep running up its China credit card," Peter McKernan, chief executive officer of Herculite Products in Emigsville, York County, said during a telephone news conference to publicize the report. "It's got to start producing more products . . . made in Pennsylvania and other parts of the U.S." - Stacey Burling
Endo withdraws bid to expand use of Frova
Endo Pharmaceuticals Holdings Inc., Chadds Ford, said in a regulatory filing that it had withdrawn a supplemental new-drug application to expand the use of its migraine drug Frova. Endo received a "not approvable" letter in September from the Food and Drug Administration to expand Frova's label to treat short-term prevention of menstrual migraine. Frova is approved by the FDA for acute treatment of migraine. Endo also said it would return the licensing rights to an implantable pain reliever, Chronogesic, to Durect Corp., Cupertino, Calif. Endo licensed U.S. and Canadian rights from Durect in 2002. Endo did not provide a reason for the decision. Shares closed up 61 cents, or 2.50 percent, at $25.00 on the Nasdaq. - Linda Loyd
Brinker Capital reports record gain in new assets
Brinker Capital Securities Inc., a Berwyn investment-management firm, said it gathered $712 million in new assets during the first quarter, a 20 percent increase over the same period a year earlier and a record for the company. Brinker, which provides investment products for institutions and individuals through investment advisers, said it had $9.7 billion under management on March 31. Brinker president John Coyne said that 500 additional advisers started selling the company's services last year, bringing the total to 2,700. - Harold Brubaker
4 IRS offices in Phila. area to be open Saturday
Four local Internal Revenue Service offices will be open Saturday from 9 a.m. to 1 p.m. to assist taxpayers preparing their 2007 returns, which are due Tuesday. The offices, among nearly 300 nationwide that will have the special hours, are at 600 Arch St., Philadelphia; 801 Old York Rd., Jenkintown; 601 S. Henderson Rd., King of Prussia; and 57 Haddonfield Rd., Cherry Hill. IRS offices normally are closed Saturdays. The IRS telephone help line also will be operating Saturday from 10 a.m. to 3 p.m. at 1-800-829-1040. - Paul Schweizer
Elsewhere
Fed auctions $50 billion to U.S. banks
The Federal Reserve, still working to combat the effects of a severe credit squeeze, said it had auctioned an additional $50 billion to cash-strapped banks. The Fed auction marked the ninth in a series that began in December; they have pumped $310 billion in short-term loans into the nation's banking system. Federal Reserve Chairman Ben S. Bernanke and his colleagues hope that the increased resources being supplied in the Fed auctions will encourage banks to keep lending to consumers and businesses and alleviate the economic drag from the credit squeeze that began in August. - AP
Medco pays $120 million for share of European firm
Pharmacy-benefits company Medco Health Solutions Inc. announced that it had paid about $120 million for a majority interest in Europa Apotheek Venlo, a privately held provider of clinical health-care and mail-order pharmacy services in Germany and the Netherlands. Germany is Europe's fastest-growing market for pharmacy health-care services, with $35 billion in annual spending, growing at a rate of 5 percent a year, Medco said in a release. Medco, of Franklin Lakes, N.J., has a processing facility in Willingboro. - Roslyn Rudolph
La. court backs insurance firm in Katrina case
Louisiana's highest court says an insurance company is not obligated to pay for water damage from the failure of levees in the New Orleans area after Hurricane Katrina. Yesterday's ruling by the Louisiana Supreme Court reversed a state appeals court decision that favored New Orleans property owner Joseph Sher in his suit against Lafayette Life Insurance Co. In November, the state's Fourth Circuit Court of Appeal concluded that Lafayette's homeowner policy failed to exclude all forms of flooding because its language was ambiguous. But the state Supreme Court disagreed and said Lafayette Insurance was entitled to limit its liability for damage from a levee breach. Lafayette said its homeowner policies covered damage from wind but not flooding. - AP
Rates rise on 3-month, 6-month Treasury bills
Interest rates on short-term Treasury bills rose in Monday's auction. The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 1.450 percent, up from 1.440 percent last week. An additional $21 billion in six-month bills were auctioned at a discount rate of 1.600 percent, up from 1.500 percent last week. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,963.35. A six-month bill sold for $9,919.11. - AP
Yield rises for key adjustable-mortgage index
The Federal Reserve said that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 1.63 percent last week from 1.60 percent the previous week. - AP
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