(Bloomberg) — EpiPen, a life-saving allergy treatment widely criticized for its high price tag, will get generic competition for the first time since the autoinjector was approved more than two decades ago.
The Food and Drug Administration on Thursday cleared Teva Pharmaceutical Industries Ltd.’s generic EpiPen and EpiPen Jr. for sale, several years after the Israeli drugmaker filed for approval. Mylan NV has attempted to thwart competition from Teva, claiming that differences in how the epinephrine-injecting devices work would confuse patients. Mylan takes in about $1 billion a year in EpiPen sales.
Teva’s American depositary receipts rose 7.1 percent to $24.06 at 1:02 p.m. in New York. Mylan fell 0.4 percent to $37.68.
FDA Commissioner Scott Gottlieb has pledged to help copycats of complex drug-device combinations, such as the EpiPen, find a way to market. The strategy is part of a sweeping effort by the Trump administration to bring down drug prices with more low-cost competition.
Mylan acquired the rights to sell EpiPen in 2007, when it cost about $57 per shot. The market leader, which is run from Canonsburg, Pennsylvania, came under fire two years ago from patients and U.S. lawmakers for raising the price of EpiPen to $600 for a two-pack of the autoinjecting pens.
Mylan then introduced a generic version of its own device at $300 for a two-pack. In May, the FDA placed the EpiPen on its list of drugs in shortage after more than 400 patients in 45 states reported difficulty filling prescriptions following manufacturing issues at a Pfizer Inc. factory that makes the devices for Mylan.
“This approval means patients living with severe allergies who require constant access to life-saving epinephrine should have a lower-cost option, as well as another approved product to help protect against potential drug shortages,” Gottlieb said in a statement.
Mylan has faced competition from other autoinjectors — Impax Laboratories LLC’s Adrenaclick and Kaleo Inc.’s Auvi-Q — but neither are generic, which allows pharmacists to substitute the products for the a brand-name version at the drugstore counter. The two rivals haven’t sold nearly as well as EpiPen without name recognition. Adrenaclick is also on FDA’s shortage list.
Impax is now part of Amneal Pharmaceuticals Inc. Shares of Amneal fell 1.6 percent to $21.58.
The FDA previously rejected Teva’s generic EpiPen in 2016 after citing “major deficiencies” in the proposal. Unlike Mylan’s one-cap EpiPen, Teva’s proposed generic substitute had two caps, including a removable one that covers the spot where its needle extends. The difference in caps would confuse patients and could prove dangerous, Mylan had argued. It wasn’t immediately clear how the cap situation was resolved as part of Teva’s approval.
Mylan’s cap is nonremovable, a fairly recent innovation that prevents users from accidentally pricking themselves or others. Mylan argues that the updated cap along with other advancements are critical to the pen’s safety and functionality. It acquired new patents on the device that prevented others from copying its design until 2025.
Amazon.com Inc. is in the running to acquire Landmark Theatres, a move that would vault the e-commerce giant into the brick-and-mortar cinema industry, according to people familiar with the situation.
The company is vying with other suitors to acquire the business from Wagner/Cuban Cos., which is backed by billionaire Mark Cuban and Todd Wagner, according to the people, who asked not to be identified because the discussions are private. The chain’s owners have been working with investment banker Stephens Inc. on a possible sale, the people said. No final decisions have been made, and talks could still fall apart.
Pushing into movie theaters would follow Amazon’s expansion into myriad other forms of media, including a film and TV studio and music service. With Landmark, it gets a chain focused on independent and foreign films that was founded in 1974. The company has more than 50 theaters, including high-profile locations in New York, Philadelphia, Chicago, Los Angeles and San Francisco, with about 250 screens in 27 markets.
Amazon, based in Seattle, declined to comment. Officials at Landmark couldn’t be reached after normal business hours.
Though the acquisition price for Landmark would likely be small, it would mark a significant new incursion by Amazon into the physical world. The online retailer shocked the supermarket industry last year by acquiring Whole Foods for $13.7 billion, positioning the organic-food chain in the middle of its campaign to sell more groceries.
The e-commerce company already spends billions each year on movies and TV shows, saying it helps entice shoppers to join its Prime subscription plan and makes existing members more likely to renew.
Amazon, founded as a book seller, previously disrupted that industry by giving authors an alternative to the big publishers, eliminating a middleman between readers and artists. It opened its first brick-and-mortar bookstore in 2015 in Seattle and now has nearly 20 around the country.
The U.S. government has previously barred film studios from the theater industry. But the U.S. government said earlier this month that it was considering terminating a 70-year-old Hollywood settlement that halted the vertical integration of studios and theaters. The so-called Paramount decree may have prevented smaller films from getting wider distribution.
Cuban and Wagner also own Magnolia Pictures, the production company 2929 Productions, and the networks AXS TV and HDNet Movies. Cuban, a 60-year-old who also appears on the reality show “Shark Tank,” told the Hollywood Reporter in April that he hired a bank to evaluate offers, but said at the time he was in “no rush to sell.”
(Bloomberg) — Spending at U.S. restaurants surged over the past three months by the most on record, making it both a bright spot for the economy and a risk if appetites for eating out return to normal.
Sales at food-service and drinking establishments rose 1.3 percent in July to $61.6 billion, the Commerce Department reported on Wednesday. That brought the three-month annualized gain to 25.3 percent, the fastest pace in figures going back to 1992.
Such historic gains caught the attention of economists. Kevin Cummins and Michelle Girard at NatWest Markets said the figures indicate “consumers remain quite comfortable with their personal financial situation and the economic outlook.” Omair Sharif of Societe Generale noted that restaurants accounted for 30 percent of the July increase in retail sales but just 12 percent of the total.
“Any mean reversion here would lead to a noticeably slower pace of retail sales in the coming months,” Sharif wrote in a research note.
One possible explanation for the recent jump is that Americans are spending their extra cash from tax cuts on dining out. In addition, major restaurant companies have recently hiked menu prices to keep up with higher minimum wages and rent costs.
In an interview, Sharif said the recent gains were surprising and probably partly reflect price increases related to labor costs. The retail figures are adjusted for seasonal variation but not for inflation.
While McDonald’s Corp. last month reported a gain in the key measure of same-store sales, its customer traffic still fell in its home market of the U.S. — suggesting fewer diners are coming in but they are spending more.
Across the industry, restaurants are increasingly pushing delivery and discounts to attract diners. Chipotle Mexican Grill Inc. this year is muscling its way into the delivery market with DoorDash and Postmates tieups. Meanwhile, fast-food chains are locked in a battle to offer the cheapest burger.
Bloomberg — Constellation Brands Inc., which for seven decades has made its money off beer, wine and whiskey, sees its future in a marijuana leaf.
In the biggest (legal) cannabis deal, the Victor, New York-based beverage company will spend about $3.8 billion to boost its stake in Canadian grower Canopy Growth Corp., betting legalization will gain traction around the world and especially in the U.S.
“This is rocket fuel,” Canopy Chief Executive Officer Bruce Linton said on the company’s earnings call Wednesday. “We’re going to be way more global.”
Constellation, among whose brands are Corona and Ballast Point beers and Robert Mondavi wine, will own 38 percent of Canopy, up from about 10 percent, according to a statement Wednesday. The record investment reflects a world in which pot has become ubiquitous as its counterculture stigma fades. In the U.S., a patchwork of state laws and gentle enforcement under the Obama administration have made its pungent odor common from Colorado ski towns to the sidewalks of New York.
Now, makers of alcoholic beverages are trying to add cannabis as an edgy ingredient as their traditional business slows. Molson Coors Brewing Co. has started a joint venture with Hydropothecary Corp. to develop non-alcoholic, cannabis-infused beverages for the Canadian market. Heineken NV’s Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic drinks infused with THC, marijuana’s active ingredient.
After Wednesday’s deal, Canopy’s Canadian shares jumped as much as 52 percent to the highest since the stock began trading in 2010. Constellation fell as much as 9.2 percent, the most intraday since November 2016.
Marijuana once was anathema to polite society and its use harshly punished. It was popular among bohemian types like jazz musicians, and the subject of sensationalist entertainment like “Reefer Madness,” a 1936 film advertised with the line “Women cry for it — Men die for it.” In 1987, the revelation that federal Judge Douglas Ginsburg once sampled its charms torpedoed his nomination to the U.S. Supreme Court. But as decades passed — and prisons filled with otherwise law-abiding users — governments began to run up the white flag.
On Oct. 17, Canada will become the first G-7 country to legalize pot for recreational use. In the U.S., federal law still prohibits the drug, but states from California to Colorado have made it legal, and its medical use is thriving. The situation has created legal dissonance, but also the expectation that America will one day support a vibrant consumer market.
QuickTake: Marijuana’s Path From Taboo to Legit to Job Engine
Global consumer spending on cannabis will hit $32 billion by 2022, triple current levels, according to a report this week by U.S. research firms Arcview Market Research and BDS Analytics. The U.S. industry is gaining economic and political clout, employing more than 200,000 workers.
Canopy, based in Smiths Falls, Ontario, has specialized in the medical product and doesn’t currently have operations south of the border. Entering the U.S. may create challenges for its listing on the Toronto Stock Exchange, as the bourse has said it may delist marijuana companies that run afoul of U.S. federal law. Canopy is also listed on the New York Stock Exchange.
Linton said on the call that marijuana may become legal federally in the U.S. “sooner than people think” and that Canopy is doing everything lawful to get ready.
Ken Shea, an analyst at Bloomberg Intelligence, said Constellation and Canopy are poised to spring. “They want to be a first mover on a disruptive product,” he said.
Still, the companies face a formidable obstacle in the Trump administration. Attorney General Jeff Sessions over a decades-long career in law enforcement has made prosecuting marijuana crimes a focus. “Good people don’t smoke marijuana,” he said in 2016.
Still, President Donald Trump appeared to get out of states’ way when he signaled he’d allow them to decide how to regulate the drug, against his attorney general’s policy.
Both companies said they have no plans to sell cannabis products anywhere unless it is permitted at all government levels.
Canopy, which has a presence in 11 markets around the world, said it would make international growth a priority. The company isn’t putting hard guidelines on how it plans to use the influx of capital, though its target acquisition list exceeds $1 billion globally, Linton said on the call.
Constellation will be able to name four of Canopy Growth’s seven directors. Canopy will continue to be led by its existing management.
“Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities,” Constellation CEO Rob Sands said in the statement.
Women’s rights advocates have urged companies to adopt full pay transparency policies — meaning that employees know what each of their colleagues make — as a tool to close pay gap, which is even worse for women of color. While white women in the U.S. on average earn 79% of what white men make, black women earn 63% of what white men make, Native American women bring in 57%, and Hispanic women — 54%, according to a 2018 report from the American Association of University Women.
But others fear pay transparency could spark jealousy among employees and reduce the number of staffers a company can hire. Pay transparency is still relatively rare in the private sector, according to Stephanie Penner, a senior partner at consulting firm Mercer, which works with companies on these issues. About 17% of private companies practice pay transparency, while 41% discourage and 25% explicitly prohibit discussion of salary information, according to a December 2017 report from the Institute for Women’s Policy Research.
But is pay transparency actually beneficial to employees and employers? Here’s what the experts say.
There isn’t comprehensive research on how pay transparency affects employees because so few companies have these policies, according to Todd Zenger, presidential professor of strategy and strategic leadership at the University of Utah’s David Eccles School of Business. But anecdotal evidence from Buffer and SumAll suggests it can make workers more productive and satisfied.
Hailley Griffis, Buffer’s public relations manager, says job applications to work at Buffer significantly increased after the company made its compensation data public. SumAll CEO Dane Atkinson told Business Insider in 2017 that transparency made employees more productive and collaborative. And a 2016 study published in the Journal of Business and Psychology found that employees were more likely to ask for help from the right people when they knew what their colleagues make.
“If I don’t know my co-worker’s pay, I assume that I might not be getting paid as much, and I decrease my performance,” says Elena Belogolovsky, who authored the 2016 study when she worked as an assistant professor of human resources studies at Cornell. “When people don’t know each other’s pay, they assume they are underpaid.”
But when employees are able to compare, they might realize they’re being paid market rate and spend a lot less time being dissatisfied, says Chandra Childers, a senior research scientist at the Institute for Women’s Policy Research.
Companies can close pay gaps
Of course, employees will only be happy if they’re being paid fairly — and knowing colleagues’ salaries allows workers to fight to close the gap. Childers points to the case of Lilly Ledbetter, who famously sued her company for discrimination after a co-worker anonymously informed her that she made less than two male colleagues in the same job.
“She didn’t know she was being paid less so she couldn’t negotiate for higher pay — and that’s more common than we might think,” Childers says.
Griffis says Buffer, which uses a formula that factors in job title, experience and cost of living to determine staff salaries, doesn’t have a pay gap among men and women in the same roles. But she notes there is a pay gap when women and men’s salaries across the company are compared: women make 9.25% less than men on average. As of April 2018, the company employed 48 men and 21 women in total.
“We don’t think the gap is because of our salary formula, but a lack of diversity. And that’s something we’re working on and taking very seriously,” Griffis says. “As a woman, I know a man doing the same job as me would not make more money.”
Companies can control the narrative
While pay transparency policies brought Whole Foods and SumAll public goodwill, Uber, BBC and Google became ensnared in controversies over alleged gender pay gaps. Penner says companies could benefit by getting ahead of the narrative since public pressure will only continue to mount.
“Employees want more information,” Penner says. “There’s more information that’s available in the marketplace that’s accessible to employees and job candidates. If an organization doesn’t form its own pay method on transparency, someone else will — and it probably won’t be a complete message.”
What are the downsides of pay transparency?
Companies may hire or retain fewer people
Companies may be reluctant to make their pay transparent, because that can render it more difficult to hire talented staffers at lower rates, Belogovsky says. That means that companies will be able to hire fewer people on tight budgets.
“If no one knows, you can pay people whatever you want,” she says. “Companies want to keep the ability to hire more stars and pay them less. If they can hire a woman and pay her less, why wouldn’t they do that?”
Before Buffer began publicizing its internal pay data, company leaders feared it might be easier for competitors to poach employees, Griffis says.
“Competitors would just need to offer an employee another $20,000, and soon they can take our whole engineering team,” she says. “That was definitely a fear, but to my knowledge that didn’t happen.”
Transparency could pit employees against each other
While some have argued pay transparency can increase employee performance, others say full transparency can have a detrimental effect on employees. Zenger says it could cause tension.
“In environments where performance is difficult to precisely measure and isn’t observable to everyone, everyone believes they’re above average in terms of their contributions or performance,” Zenger says. “Broadcasting everyone’s individual pay triggers a process of social comparison.”
Belogovsky says there’s also a chance transparency could stoke envy among the company’s lowest earners.
“When you see everyone’s performance, some people might not be motivated because they feel jealous,” she says. “You can argue when everyone knows each other’s pay, people who earn less will be more likely to quit.”
Pay differences could be taken out of context
Many companies base pay on subjective determinations. Not clearly communicating the reasons why certain employees are paid more or less may exacerbate employee frustration, Penner says.
“There is definitely a tipping point at which too much information is harmful because it will be taken out of context… There’s a lot more that goes into how someone is paid than what meets the eye to employees,” she says. “It’s important to give more information about why the pay is different for different jobs. If you don’t, it’s up for interpretation by each employee about why that’s fair.”
Zenger suggests it might be more beneficial for companies to explain exactly how pay is determined — without revealing specific figures.
“In a university setting, we have strict rules about publicizing students’ grades on exams. But we try to be transparent about how performance is determined,” Zenger says. “It’s really a question about whether you broadcast [salaries] or be transparent about the process to which pay is determined.”
A group of Tinder founders, executives and early employees sued IAC/InterActiveCorp and Match Group Inc., claiming the owners of the dating app are trying to cheat them out of billions of dollars in options.
Match Group shares dropped as much as 3.8 percent Tuesday. The lawsuit was first reported by CNBC. IAC rose 0.3 percent to $191.77 at 12:46 p.m.
The 10 people suing include co-founder and former Chief Executive Officer Sean Rad and co-founder and former Chief Strategy Officer Jonathan Badeen. They claim IAC and Match used “false, misleading and incomplete financial information and projections” to create an artificially low valuation of Tinder and avoid paying the group money they’re due under options agreements.
Swiping through potential matches on the mobile app Tinder has become an ubiquitous part of Millennial dating culture with its subscriber numbers skyrocketing and year-over-year revenue growing at 136 percent. In 2018, the company expects revenue of as much as $800 million, according to the complaint.
The case is Rad v. IAC/InterActiveCorp, Supreme Court of the State of New York (Manhattan).
Saudi Arabia’s sovereign wealth fund would be the main source of money for Tesla CEO Elon Musk’s grand plan to take the company private, but the deal isn’t done yet, Musk disclosed in a blog on Monday.
The fund approached Musk about going private multiple times during the past two years, and Musk says he left a July 31 meeting with no question that the deal would be closed. That’s why he tweeted on Aug. 7 that the funding had been secured, Musk wrote. The fund itself has not publicly commented on the possibility of a deal.
Under the proposal, only investors who don’t want to remain with a private company would be paid and funding for the deal would come from Tesla stock, not debt. Musk wrote that he expects about one-third of shareholders to take an offer of $420 per share, making the buyouts worth roughly $23.6 billion.
Musk’s blog was posted before the markets opened Monday, and there was little reaction from investors. Shares were up 2 cents to $355.51 in morning trading.
Musk wrote that at the July 31 meeting, the fund’s managing director “strongly expressed his support” for taking the electric car and solar panel maker private. “I understood from him that no other decision makers were needed and that they were eager to proceed,” Musk wrote in the blog.
But the deal appeared to be far from finished. Since the meeting, the men have continued discussions and the managing director has expressed support “subject to financial and other due diligence and their internal review process for obtaining approvals,” Musk wrote.
The wealth fund recently bought nearly 5 percent of Tesla’s shares.
Musk wrote that he made the Aug. 7 announcement because he had talked to large investors about his desire to take the company private. “It wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time,” he wrote.
He wrote that in the blog and the Aug. 7 tweet that he was speaking for himself as a potential bidder for the company.
Musk also wrote that the Saudis are interested in the company because they want to diversify away from oil.
He also is in talks with other investors because he wants Tesla to continue to have a “broad investor base,” he wrote.
(Bloomberg) — Saudi Arabia’s sovereign wealth fund is in talks that could see it becoming a significant investor in Tesla as part of Elon Musk’s plan to take the electric car maker private, according to people with knowledge of the fund’s plans.
The Public Investment Fund, which has built up a stake just shy of 5 percent in Tesla in recent months, is exploring how it can be involved in the potential deal, said the people, who asked not to be identified talking about the matter. Discussions began before the controversial Aug. 7 tweet by Musk, who is Tesla’s co-founder and chief executive officer, saying he was weighing a plan to take the company private.
Am considering taking Tesla private at $420. Funding secured.
The PIF sees its investment in Tesla as a strategic way for the world’s biggest crude producer to hedge against oil, the people said. The Saudi fund hasn’t made any firm decisions on whether to increase its stake, or by how much, but talks are ongoing, they said. It wasn’t immediately clear how much the fund would invest in Tesla.
Musk’s tweet stunned investors, with many raising questions about his claim that funding for the venture had been secured. While the entrepreneur owns 20 percent of Tesla, more than $60 billion would be needed to buy the business from public shareholders.
The PIF and Tesla didn’t respond to requests for comment.
Wall Street is awash with speculation on who might team up with Musk to do a deal. Musk and his advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter. Musk has said he still expects to own about 20 percent of Tesla after any transaction, and that he hopes all shareholders will remain owners of a private company.
The U.S. Securities and Exchange Commission, which has been gathering information about Tesla’s public pronouncements on manufacturing goals and sales targets, is intensifying its scrutiny of the company’s public statements in the wake of Musk’s tweet, people familiar with the matter have said.
Discussions over taking Tesla private have failed before. Musk and SoftBank Group’s Masayoshi Son held talks last year that touched on taking Tesla private, two people with knowledge of the discussions have said. The discussions failed to progress due to disagreements over ownership. The PIF is also a major backer of SoftBank’s Vision Fund.
Reuters reported on Aug. 11 that the PIF has shown no interest so far in financing Musk’s proposed deal, while CNBC said on Aug. 9 that Musk previously talked with the Saudi fund about a take-private deal, citing one person familiar with the matter.
The Saudi wealth fund’s current stake in the company is valued at about $2 billion. The government is planning to turn the PIF into a $2 trillion powerhouse to help diversify the kingdom’s oil-dependent economy.