<BREAKFAST WITH THE FOOL>
Tuesday, March 16, 1999
"If all economists were laid end to end, they would not reach a conclusion." -- George Bernard Shaw
Merck Wins FDA Approval
The world's largest drug maker Merck <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MRK)") else Response.Write("(NYSE: MRK)") end if %> announced that it has won approval from the U.S. Food and Drug Administration to market its cholesterol-lowering medicine Mevacor as a drug that reduces the risk of a first heart attack. This means that the drug will become available to millions of generally healthy Americans previously ineligible for the therapy because their total cholesterol levels were considered average.
The drug can now be prescribed to patients without symptoms of cardiovascular disease, and with average to moderately elevated levels of total and LDL ("bad") cholesterol and below-average HDL ("good") cholesterol.
In a study involving 6,605 patients, treatment with Mevacor reduced the risk of a first major coronary event by 37% compared to the placebo. During the study, 3.5% of participants taking Mevacor experienced a coronary event, while 5.5% of those taking the placebo did.
News to Go
Elsewhere in the drug industry, biotechnology firm Immunex <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMNX)") else Response.Write("(Nasdaq: IMNX)") end if %> restated its 1998 earnings to better reflect a lower provision for income taxes. The company's independent auditors advised the company to reduce the provision to $2.2 million from $5.9 million. As a result, the company's 1998 results will show a profit of $1 million, or $0.02 a share, instead of a loss of $2.7 million, or $0.07 a share. While the accounting change will have "no material impact on future results or any operations of the company," the restatement does give Immunex its first profit since the early '90s. Immunex is majority owned by drug maker American Home Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHP)") else Response.Write("(NYSE: AHP)") end if %>.
IBM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> said Washington Mutual <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WM)") else Response.Write("(NYSE: WM)") end if %> has extended an existing 5-year, $533 million computer services pact into a 10-year deal. Under the expanded deal -- financial terms were not disclosed -- IBM Global Services will manage the office computer systems located throughout Washington Mutual's growing network of 2,000 bank branches.
Online retailer Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> plans to increase its number of authorized common shares to 1.5 billion from 300 million to finance acquisitions and corporate operations and to fend off hostile takeovers.
Chemicals maker Union Carbide <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UK)") else Response.Write("(NYSE: UK)") end if %> announced that it expects first-quarter earnings to be within a few cents of the highest published Wall Street estimate of $0.47 a share. That would be significantly better than the current mean estimate of $0.34 -- the forecasts range from $0.15 to $0.47 a share.
Surprise, surprise. American Airlines parent AMR Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AMR)") else Response.Write("(NYSE: AMR)") end if %> said its 1999 earnings will be reduced by the pilots' sick-out last month that led to the cancellation of more than 6,600 flights. The company plans to cut capital spending to help stem the damage.
Electricity and natural gas company Enron Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ENE)") else Response.Write("(NYSE: ENE)") end if %> eight-month-old water and wastewater unit, Azurix Co., has filed a registration statement with the SEC to make an initial public offering expected to raise up to $750 million ($863 million assuming exercise of underwriters' overallotment options).
Aerospace and automotive products maker AlliedSignal <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALD)") else Response.Write("(NYSE: ALD)") end if %> said it won a seven-year, $324 million NASA contract to operate a test facility for rocket propulsion systems, materials, and other components. The company has been the prime contractor of the White Sands Test Facility since 1994.
Movie studio Metro-Goldwyn-Mayer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MGM)") else Response.Write("(NYSE: MGM)") end if %> announced it will pay Time Warner's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TWX)") else Response.Write("(NYSE: TWX)") end if %> Warner Bros. unit $225 million to regain video and DVD distribution rights to MGM's film library. As part of the transaction, MGM expects to take a one-time pre-tax charge in the current quarter of around $225 million.
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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor