Top Headlines - part 64

US Medicaid Takes 25% of State Spending, Eligibility Improves

US Medicaid Takes 25% of State Spending, Eligibility Improves

ECONOMY

  • 14 US states spent more than 25% of overall expenditure on Medicaid
  • Medicaid spending totaled over $398 billion for 2011, 10% more than last year
  • North Carolina is overpaying for Medicaid because of issues with new billing system

Overall US state spending on Medicaid has increased this year to nearly 25%, while education funding has dropped by 20%, according to a report by the National Association of State Budget Officers (NASBO).

The NASBO report shows that 12 states have spent more than 10% on Medicaid, while 14 US states spent over 25% and California has spent up to 40% this year. Meanwhile, in Maine, Nebraska and New Mexico, Medicaid spending dropped due to a decline in federal funding.

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EU Medicines Agency Backs Roche Skin Cancer Drug

EU Medicines Agency Backs Roche Skin Cancer Drug

BUSINESS

  • Zelboraf sales estimated to reach around $930 million by 2016
  • Six-month treatment costs $56,000 in the US; EU price yet to be set
  • Drug found to delay disease progression and boost survival rates

EU drug regulators have recommended Swiss company Roche Holding’s Zelboraf treatment of a certain kind of melanoma for approval. The drug, whose clinical name is "vemurafenib", could generate profits as high as $930 million by 2016.

Zelboraf received the go ahead for retail in the US in August. It works by blocking a protein that drives tumor progression in around 50% of patients with advanced skin cancer.

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ISTA Pharmaceuticals Says No to Purchase Offer from Valeant

ISTA Pharmaceuticals Says No to Purchase Offer from Valeant

BUSINESS

  • ISTA Pharmaceuticals Rejects $314 Million Proposal from Valeant
  • ISTA foresees revenue growth for 2012 with expansion of eye, allergy products
  • Valeant purchases Afexa and iNova, is seeking more acquisitions
  • FCC Approves New Valeant Deals, Requires Divestment

ISTA Pharmaceuticals Inc. has rejected a buyout proposal from Valeant Pharmaceuticals International for $314 million, calling the offer “grossly inadequate.” Valeant's Board of Directors fully supported the buy, which includes the purchase of ISTA's $13 million debt.

In letter dated last week, ISTA's President and CEO Vicente Anido reports that Valeant's offer was not in the best interest of the company's shareholders. ISTA expects substantial revenue growth for 2012 and the foreseeable future due to its successful eye-care and allergy medicines.

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Coca Cola Makes Partnerships to Produce A 100% Plant-Based Bottle

Coca Cola Makes Partnerships to Produce A 100% Plant-Based Bottle

BUSINESS

  • Coca Cola partners with three biotechnology companies to create plastic bottles made entirely from plants
  • Coca Cola, PepsiCo intend to launch environmentally conscious plastic bottle alternatives, but testing required before production can begin globally
  • Coca Cola becomes new official beverage of Orlando’s SeaWorld, replacing Pepsi

Coca Cola Company has signed a deal with three biotechnology companies – Virent Incorporated of Wisconsin, Gevo of Colorado and Avantium of the Netherlands – to create a plastic for use in making bottles that will be made 100% from plants.

Coca Cola’s VP of Commercial Product Supply, Rick Frazier said during the launch: “This is another big step toward our commitment to lead the industry away from the use of non-renewable fossil fuels in packaging and toward more sustainable alternatives. It will build on our innovative first-generation PlantBottle package, launched in 2009, that was made from 30% plant-based material.”

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Theme Park Expansions Make a Splash For the US Tourism Industry

Theme Park Expansions Make a Splash For the US Tourism Industry

BUSINESS

  • Sea World Orlando announces biggest expansion in its 40-year history
  • Tourism observers question continued popularity of theme parks
  • Affordable entertainment with family appeal should lead to continued popularity of theme parks

In the wake of Universal Studio’s instantly successful Harry Potter attraction, Sea World Orlando has announced the biggest expansion in its almost 40-year history. But as Orlando solidifies its status as the world’s No. 1 destination for theme parks, some observers question whether there is smooth sailing ahead.

Sea World announced two major parks to open this year with an even more ambitious project set to open in 2013. This year’s new openings include:

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Morgan Stanley To Shed 1,600 Staff In 2012

Morgan Stanley To Shed 1,600 Staff In 2012

FINANCE

  • Banking sector sheds 125,000 jobs in 2011 amid market volatility
  • Morgan Stanley to relocate 80 Singapore back-office workers
  • Morgan Stanley agrees to drop MBIA insurance claims for over $1 billion

Morgan Stanley will cut around 1,600 jobs from its 62,600-strong workforce in the first quarter of 2012 in the face of financial market instability.

The banking sector is reigning in on its employee numbers across the board, with Citigroup planning to cut 4,500 jobs, Bank of America set to axe 30,000 jobs over the coming years, and Swiss lender UBS planning on letting 2,000 of its 18,000-strong workforce go.

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Brazil Wants $11 Billion From Chevron, Transocean For Oil Spill

Brazil Wants $11 Billion From Chevron, Transocean For Oil Spill

WORLD

  • 3,000 barrels of oil leak into Compos Basin over 8 days in November
  • Brazil’s National Petroleum Agency fines Chevron $28 million after oil spill
  • Chevron announces gas find off west coast of Australia

Brazilian prosecutors are suing oil company Chevron and oil rig operator Transocean to the tune of almost $11 billion. The suit aims to suspend both company’s operations after an eight-day oil spill near Rio de Janeiro in November leaked 3,000 barrels of oil into the Compos Basin.

The suit threatens to thwart the country’s plan to double its crude oil output over the next decade. Brazil relies on Transocean, which operates more than 15% of its oilrigs. Chevron, the second-biggest oil company in the US and third in Brazil after Petroleo Brasileiro and Royal Dutch Shell, fell 3% to just over $100.50 in New York following news of the case. Transocean fell almost 4% to just over $40.

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Financial Filing Lets Olympus Avoid Removal From Tokyo Stock Exchange

Financial Filing Lets Olympus Avoid Removal From Tokyo Stock Exchange

FINANCE

  • Olympus files 5 years of revised financial statements to avoid automatic removal from Tokyo Stock Exchange
  • Olympus being investigated for possibly hiding $1.5 billion over past 13 years
  • Future of Olympus unclear as it may need to sell assets or form merger to raise capital

Olympus Corp. filed five years of revised financial statements yesterday with Japan’s Financial Services Agency and avoided automatic removal from the Tokyo Stock Exchange. In its statement, Olympus needed to prove its financial problems are limited to senior management and that there were no more revisions after losing $1.3 billion in net assets.

Olympus may had avoided removal from the stock exchange, but it is not in the clear. The 92-year-old optics company is being investigated by law enforcement officials in Japan for hiding $1.5 billion over the past 13 years. Officials from the United States and the United Kingdom are also conducting their own investigations.

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Eurozone Debt Crisis: Credit Agricole to Cut 2,350 jobs

Eurozone Debt Crisis: Credit Agricole to Cut 2,350 jobs

ECONOMY

  • Credit Agricole stocks fall 52% in 2011, third-quarter profit down 65%
  • Global banking sector sheds 120,000 jobs in 2011
  • Moody’s downgrades top three French banks

France’s third-biggest bank Credit Agricole has announced plans to let 2,350 of its employees go, mostly from its investment-banking sector, in an effort to cut costs in the face of the Eurozone debt crisis.

Among the cuts are 600 jobs in Credit Agricole’s factoring and consumer finance branch and 1,750 jobs at its corporate and investment bank, which has a staff of 13,000 total. Among the 1,750 corporate and investment positions to be axed, 500 will be cut in France.

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Southwest Files Record $19 Billion Order with Boeing For 737s

Southwest Files Record $19 Billion Order with Boeing For 737s

BUSINESS

  • Southwest orders 208 Boeing 737s including 150 fuel-efficient 737 MAX jets
  • First order for 737 MAX
  • 737 MAX catalog prices announced at $95.2 million to $101.7 million

Southwest Airlines has finalized a $19 billion deal for 208 Boeing 737 jets, the biggest aircraft order in history. The deal includes 150 narrow-body 737 MAX aircraft, representing Boeing’s first order for its latest fuel-efficient jets, which cost up to around $102 million depending on the version according to company catalog prices.

Southwest took an option to buy an additional 150 737 MAX models, though didn’t specify which version of the jet it would order. The Dallas, Texas-based airline also ordered 58 Next-Generation 737 jets.

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