Thursday, July 10, 2014
Inquirer Daily News

Business news in brief

Johnson & Johnson wants an Arkansas court to overturn a $1.2 billion judgment.
Johnson & Johnson wants an Arkansas court to overturn a $1.2 billion judgment. Bloomberg

In the Region


CSX: Loose rail derailed train


CSX Corp. says the Jan. 20 derailment of a crude-oil train on a Schuylkill bridge was caused by a rail that shifted because it had been improperly secured by workers who had done maintenance on the line. The crew, which was replacing timber cross ties on the tracks, had not followed CSX protocols when it temporarily secured the rail to the ties, said Melanie Cost, a company spokeswoman. Seven rail cars, including six tankers containing crude oil, left the tracks. There were no leaks and no structural damage to the Schuylkill Arsenal bridge, CSX said. - Andrew Maykuth




Penn National gets Mass. nod


Penn National Gaming Inc. won preliminary approval to build a slots parlor in Massachusetts, beating out the owner of Parx Casino in Bensalem and Cordish Cos., of Baltimore, the Massachusetts Gaming Commission said. The five-member commission voted 3-2 to award the state's single slots license to Penn National, which proposed a $225 million project in Plainville, Mass., near the Rhode Island state line. A final vote will be held Friday if Penn National, which is based in Wyomissing, Pa., accepts 18 licensing conditions. This is the first license issued in Massachusetts, which also plans to have three larger casinos in three different regions. - Harold Brubaker


Penn plans research park


The University of Pennsylvania plans a research and product commercialization park on the former DuPont Co. paint factory property, on the east bank of the Schuylkill near the Grays Ferry section, the university said. The "South Bank" plan, drafted for Penn by locally based planning firm WRT, will unite students, teachers and outside business interests to "accelerate the formation of new, University-based business ventures,"  Penn president Amy Gutmann said in a statement. - Joseph N. DiStefano


Inovio set to raise $55M


Inovio Pharmaceuticals Inc., of Blue Bell, said it will raise about $55 million in an offering of 19 million common shares at $2.90 per share. Inovio is developing synthetic vaccines for cancer and infectious diseases. The stock offering is expected to close on or around March 4, Inovio said. The company intends to use net proceeds for general purposes, including clinical trial expenses, research and development and other expenses. Shares closed down 8.3 percent, or 31 cents, at $3.42. - Reid Kanaley


J&J seeks judgment reversal


A lawyer for two pharmaceutical companies argued that the Arkansas Supreme Court should reverse a $1.2 billion judgment because the trial judge improperly applied a law in the state's lawsuit over improper marketing of the antipsychotic drug Risperdal. Attorney Walter Dellinger said there was no fraud or improper reimbursements for Medicaid patients who were prescribed the drug, even though the state pursued New Jersey-based Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals Inc., under the state's Medicaid fraud statute. Attorney David Frederick argued for the state, saying that there was fraud and that the companies didn't properly communicate the risks of the drug and marketed it for off-label use. - AP


Heinz to close Euro factories


European operations are the latest to hit the chopping block at H.J. Heinz Co. as the Pittsburgh food company cuts costs under new ownership. The ketchup maker said it plans to close two factories and lay off about 350 workers in Belgium and Germany. The move follows two factory closures in the U.S. Heinz reached a deal to sell a factory in Canada that the Pittsburgh food company had planned to close. Highbury Canco Corp., a Canadian company, agreed to buy Heinz's Leamington, Ontario, plant and would take over the manufacturing and distribution of Heinz products. - Pittsburgh Tribune-Review


Radian's rating up, a bit


Standard & Poor's Ratings Services raised its credit rating on Philadelphia-based Radian Group Inc.'s mortgage-insurance subsidiaries to "BB-" from "B" and changed the outlook to positive from stable. The Radian upgrade to a still very low level was part of a review of the mortgage-insurance industry. "The rating actions reflect these mortgage insurers' improved recent and prospective operating earnings arising from the overall positive macroeconomic trends in the U.S.," said Ron Joas, Standard & Poor's credit analyst. - Harold Brubaker






Founder defends eBay


EBay Inc.'s founder Pierre Omidyar said billionaire investor Carl Icahn's claims that the company is not operating in the best manner for shareholders aren't merited. Icahn has urged the company to split off its PayPal unit, which is the fastest growing unit of the e-commerce company and accounts for about 40 percent of its revenue. Icahn has also leveled attacks at two directors and company CEO John Donahoe. Omidyar said Icahn is making unsubstantiated claims about the company and "deliberately impugning the integrity of our directors." - AP


Mortgage rates rise


Mortgage buyer Freddie Mac said the average rate for the 30-year loan increased to 4.37 percent from 4.33 percent last week. The average for the 15-year mortgage rose to 3.39 percent from 3.35 percent. - AP


Freddie posts $8.6B profit


Separately, Freddie Mac posted net income of $8.6 billion for the October through December period, its ninth straight profitable quarter. Earnings were boosted by the continued rise in home prices, which reduced the amounts the company had to set aside to cover losses on mortgages. - AP



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