Pfizer request for judgment denied

By Globe Staff and wires, 8/27/2003

THE REGION

Pfizer request for judgment denied

US District Judge Patti Saris has denied a request by Pfizer Inc. for summary judgment -- a ruling in its favor without a trial -- in a federal whistle-blower lawsuit. The suit, brought by a former employee of Parke-Davis, now Pfizer, alleges the company illegally promoted its best-selling epilepsy drug, Neurontin, for medical conditions not approved by federal regulators. The US attorney's office in Boston is investigating the company's actions and is negotiating a settlement with Pfizer. Pfizer contended the whistle-blower must prove Parke-Davis sales people lied to doctors about Neurontin's effectiveness or safety. Saris, in a ruling issued Friday, disagreed, saying the plaintiff needs to prove only that the company provided physicians with kickbacks to prescribe the drug or engaged in off-label marketing, not that the marketing was false. Pfizer officials could not be reached for comment. (Liz Kowalczyk)

Genuity files plan for liquidation

Genuity Inc., a high-speed network communications company in Woburn that sought bankruptcy protection in November, has filed a

liquidation plan and said that stockholders will receive nothing from the sale of its assets. In February, Genuity sold most of its assets to rival Level 3 Communications Inc., which is backed by billionaire investor Warren Buffett, for $242 million. The proceeds were to be distributed to creditors, with stockholders getting nothing. Genuity's financial health declined rapidly last year after Verizon Communications Inc., its former parent, decided not to rescue the money-losing operation. (Reuters)

TolerRx plans to raise $75m from IPO

TolerRx Inc., which makes drugs to treat the immune system, said it plans to raise as much as $75 million in an initial public offering. The company will use the proceeds for research and development, according to a Securities and Exchange Commission filing. J.P. Morgan Chase & Co. and S.G. Cowen will underwrite the sale, along with Leerink Swann & Co. TolerRx, founded in 2000 by chief executive Douglas L. Ringler, has five products in development, none of which has advanced past early clinical trials. TolerRx said in the filing that it has never been profitable and expects to incur "significant operating losses" in the future. The company had a net loss of $6.6 million on sales of $750,000 for the six months ended June 30. Research and development expenses in the same period were $5.2 million. Cambridge-based TolerRx did not disclose how many shares it will sell. (Bloomberg)

SeaChange posts 16% revenue increase

SeaChange International Inc. posted a 16 percent increase in second-quarter revenue from video-on-demand, and said it would beat third-quarter expectations by a penny a share. The Maynard company posted second-quarter net income of $942,000, or 3 cents a share, meeting expectations, on revenue of $36 million. The year-ago loss was $635,000, or 2 cents a share, on revenue of $33.3 million. Revenue in the recent quarter included $17.6 million from video-on-demand, compared with $15.1 million last year. For the quarter ending Oct. 31, SeaChange forecasts net income of 5 cents a share, on revenue of $36 million. Analysts expect earnings of 4 cents a share. (Dow Jones)

THE NATION

Northrop Grumman to pay $60m to settle

The Pentagon said Northrop Grumman has agreed to pay $60 million to settle a case in which the company's Newport News Shipbuilding Inc. subsidiary allegedly overcharged the government for costs associated with a contract to build double-hulled tankers. The settlement was disclosed by the Pentagon's office of the inspector general, which investigated the allegations along with the Naval Criminal Investigative Service and the Defense Contract Audit Agency. Newport News Shipbuilding has been a wholly owned subsidiary of Northrop Grumman since November 2001. (AP)

Microsoft to charge for MSN software

Microsoft Corp., whose MSN Internet service is losing money, will sell subscriptions to use a new version of its software to bring in clients. The service, called MSN Premium, will cost $9.95 a month or $80 a year for a set of e-mail, security, calendar, and digital-photo programs, said Lisa Gurry, MSN Group product manager. A version without some of the programs will cost less, she said. Sales will begin sometime between December and February. Microsoft is avoiding selling high-speed access and is trying to collect a fee for MSN software from customers who get fast access from other companies. Clients may be unwilling to pay the fee plus access charges, analysts said. (Bloomberg)

United to resume trans-Pacific service

Tilton United Airlines said it will restore all trans-Pacific flights next month, including those from Hong Kong, as it attempts to recover from the sharp downturn in air travel caused by SARS. Meanwhile, chief executive Glenn Tilton, who begins a two-day trip to Beijing today, said he will discuss cooperation plans with mainland Chinese airlines to help United expand into the booming mainland Chinese aviation market. United, the world's number two carrier, slashed 75 percent of its flights in and out of Hong Kong at the peak of the severe acute respiratory syndrome outbreak, said Mark Schwab, a United vice president. The airline, which earns 17 percent of its revenue from trans-Pacific routes, has been gradually restoring its services since SARS fears eased in June, Schwab said. (AP)

Sears says Aug. sales ahead of forecast

Sears, Roebuck and Co., the largest US department store chain, said that August sales at its stores open at least a year were tracking ahead of expectations. Sears said same-store sales for the four weeks ended Aug. 30 were helped by strength in the home appliance category. A Sears spokesman could not comment on how well other categories were doing, but said that home appliances -- which account for 60 percent of its sales -- had been tracking so far above normal that the company wanted to inform investors. This month, Sears forecast that its August same-store sales would be flat compared with a year ago, when they fell 11.1 percent. The retailer has reported 23 straight months of negative same-store sales. (Reuters)

Wild Oats rises on buyout speculation

Shares of Wild Oats Markets Inc., a natural-foods grocer, rose 11 percent amid speculation the company may be acquired by supermarket chain Kroger Co., analysts said. Shares rose $1.20 to $12.30. Kroger, the largest US grocer, has been involved in about 20 transactions valued at more than $12 billion in the past five years. A purchase price of about $17 a share has been mentioned among traders, said Jeff Tryka, an analyst at Delafield Hambrecht Inc. who has a "buy" rating on Wild Oats but doesn't personally own it. A Wild Oats spokeswoman declined to comment. (Bloomberg)

Justice rejects SBC bid for long-distance

The Justice Department told federal regulators it could not support SBC Communications Inc.'s application to enter the long-distance market in four Midwestern states. SBC, the second-largest of the nation's four regional Bell companies, asked federal regulators last month for permission to offer long-distance service in Ohio, Indiana, Illinois, and Wisconsin. The move is opposed by potential competitors, who say the local telephone giant is blocking competition for its services. SBC has been trying for years to offer long-distance in its service area, and approval from the Federal Communications Commission is the final hurdle. SBC already sells long-distance in eight states, including California and Texas. In its statement, Justice found flaws with SBC's billing accuracy. (AP)