(Bloomberg) -- Wall Street, after getting billions of taxpayer dollars, will emerge from the financial crisis looking much the same as before markets collapsed, said H. Rodgin Cohen, chairman of law firm Sullivan & Cromwell LLP.
“The system will look more like what preceded the current environment than many people seem to believe,” Cohen said yesterday at a panel discussion on the future of Wall Street sponsored by Bloomberg News in New York. “I am far from convinced there was something inherently wrong with the system.”
Cohen, 64, joined Lazard Ltd. Deputy Chairman Gary Parr, 52, and Carlyle Group co-founder David Rubenstein, 59, in discussing the industry’s future after the deepest financial crisis since the Great Depression forced the government to take equity stakes in hundreds of financial institutions. The panelists projected a future led by core banking and lower risk for established firms.
“There’s a good chance there are five to seven or eight global institutions, of which three or four will be clear winners and then some others will be good, doing full-service banking and securities business sort of as we knew it five years ago,” Parr said. They will operate “with a lot lower return on equity and a lot lower risk profile,” he added.
Banks and other financial institutions reported more than $1.37 trillion in writedowns and losses since the mortgage markets collapsed in 2007, and Parr said more are ahead. “There is still hundreds of billions of dollars of losses to be realized at a number of financial institutions,” he said. “There will be a need for substantial capital raising.”
Wall Street ‘Reshaped’
Rubenstein said that while Wall Street will likely rebound after the recession, competition probably will emerge from global banks being formed in China and the Middle East as well as from so-called boutique investment banks at home.
“Wall Street will be reshaped,” Rubenstein said. “People once thought that American brand-name institutions could do no wrong and that if they sold a product, it was a good product, and if they said something was worth a certain value, it was worth a certain value. Now that has changed.”
U.S. Treasury Secretary Timothy Geithner has urged broad changes in regulating the U.S. financial system to address a lack of confidence caused by the credit crisis.
President Barack Obama in the New York Times Magazine May 3 called for “an updating of the regulatory regimes comparable to what we did in the 1930s, when there were rules that were put in place that gave investors a little more assurance that they knew what they were buying.” Obama stopped short of calling for a restoration of the Depression-era separation between banks and brokerages created by the Glass-Steagall Act of 1933, which was repealed in 1999.
Glass-Steagall
“Some people say, did all of this arise due to the elimination of Glass-Steagall and we should put Glass-Steagall back into place,” Parr, a specialist in advising financial firms, said at the panel. “I’ve observed that that had little or nothing to do with this crisis.”
Rubenstein said private-equity firms will take advantage of the financial crisis by investing in “smaller” financial companies.
“This is a good opportunity for private equity to show what it can do,” Rubenstein said.
Carlyle is preparing a bid for BankUnited Financial Corp., a Florida lender deemed “critically undercapitalized” by federal regulators, with Blackstone Group LP and billionaire Wilbur Ross, people familiar with the offer said April 22.
“Whenever there is disequilibrium or imbalance in a system, there is always opportunity,” Rubenstein said, declining to comment on BankUnited. “Opportunities will be in smaller banks where you can do the due diligence and where you can have some involvement in management and you can effectuate some changes in the way the company is run.”
Read more here
Tuesday, May 5, 2009
Monday, May 4, 2009
New Chrysler auto incentives coming
(CNNMoney.com) -- With bankruptcy threatening to further weigh down the carmaker's sales, Chrysler is expected to announce a new incentive program Tuesday.
Chrysler's "Employee Pricing Plus Plus," program ended just days after the carmaker declared Chapter 11 bankruptcy. That program combined cash rebates with price reductions and cut-rate financing for qualified customers.
The new sales program is expected to rely heavily on giving dealers cash incentives, which means that customers will see big price reductions at the dealership, said Jessica Caldwell, an industry analyst with the automotive Website Edmunds.com.
Dealer incentives give auto dealers extra cash that can, in turn, be used to offset price reductions negotiated with customers. Dealer cash incentives are more subtle than straight cash rebates, so they aren't as damaging to a car brand's image and they don't reduce resale value of cars the way more straightforward customer rebates do.
But incentive money for dealers will likely be paired with limited customer rebates as well, Caldwell said. The carmaker announced in a conference call on Friday that the incentive plan would include some "loyalty" incentives for returning Chrysler, Dodge and Jeep buyers.
Chrysler has been the biggest spender among all auto manufacturers on incentives in the U.S. market. Last month, Chrysler spent $4,288 per vehicle on incentives.
Read more here
Chrysler's "Employee Pricing Plus Plus," program ended just days after the carmaker declared Chapter 11 bankruptcy. That program combined cash rebates with price reductions and cut-rate financing for qualified customers.
The new sales program is expected to rely heavily on giving dealers cash incentives, which means that customers will see big price reductions at the dealership, said Jessica Caldwell, an industry analyst with the automotive Website Edmunds.com.
Dealer incentives give auto dealers extra cash that can, in turn, be used to offset price reductions negotiated with customers. Dealer cash incentives are more subtle than straight cash rebates, so they aren't as damaging to a car brand's image and they don't reduce resale value of cars the way more straightforward customer rebates do.
But incentive money for dealers will likely be paired with limited customer rebates as well, Caldwell said. The carmaker announced in a conference call on Friday that the incentive plan would include some "loyalty" incentives for returning Chrysler, Dodge and Jeep buyers.
Chrysler has been the biggest spender among all auto manufacturers on incentives in the U.S. market. Last month, Chrysler spent $4,288 per vehicle on incentives.
Read more here
Sunday, May 3, 2009
Catch-Up Buying May Lift S&P 500 as High as 1,000
(Bloomberg) -- “Most investors have missed the rally” in U.S. stocks, so further gains are likely as they spend some of their cash to buy shares, according to Andrew Garthwaite, a global strategist at Credit Suisse Group.
The Standard & Poor’s 500 Index may reach 1,000 before prices peak, he wrote in a report yesterday. His estimate is 15 percent higher than yesterday’s close of 872.81, which resulted from the S&P 500’s biggest monthly gain since March 2000. The index last closed above 1,000 on Nov. 4.
As the CHART OF THE DAY shows, investors have more money stashed away in money-market mutual funds than in equity funds, according to data compiled by the Investment Company Institute. That hadn’t been the case for 16 years, according to the report, which included a chart comparing the funds’ assets since 1991.
Read more here
The Standard & Poor’s 500 Index may reach 1,000 before prices peak, he wrote in a report yesterday. His estimate is 15 percent higher than yesterday’s close of 872.81, which resulted from the S&P 500’s biggest monthly gain since March 2000. The index last closed above 1,000 on Nov. 4.
As the CHART OF THE DAY shows, investors have more money stashed away in money-market mutual funds than in equity funds, according to data compiled by the Investment Company Institute. That hadn’t been the case for 16 years, according to the report, which included a chart comparing the funds’ assets since 1991.
Read more here
Tuesday, April 28, 2009
Specter's shift will help him more than Democrats
(MarketWatch) -- With longtime Republican Sen. Arlen Specter switching to the Democratic Party, all of Washington is abuzz with news that the Democrats will have a filibuster-proof majority in the Senate.
President Barack Obama's agenda might get a small boost from Specter's change, but the biggest beneficiary is likely to be Specter, who changed parties to protect himself, not Obama. See full story.
With 60 sure votes, the Democrats would be able to advance much of Obama's agenda, especially the transformations in the health-care and energy sectors. Under Senate rules, a minority of 41 senators can block almost any legislation or nomination.
The problem is that the 60 votes aren't sure. There is no guarantee that all 60 will consistently vote to end filibusters mounted by the Republicans. Every issue, every bill is different. The Democratic leaders still have to get the votes of a few moderates of either party, including Pennsylvania's Specter, Democrat Ben Nelson of Nebraska, or Maine Republicans Susan Collins and Olympia Snowe.
Specter said he would not be an automatic 60th vote.
The current lineup in the Senate is 56 Democrats, 41 Republicans and two independents who vote with the Democrats. Democrat Al Franken leads in the Minnesota race, now locked in the courts following a recount.
Read more here
President Barack Obama's agenda might get a small boost from Specter's change, but the biggest beneficiary is likely to be Specter, who changed parties to protect himself, not Obama. See full story.
With 60 sure votes, the Democrats would be able to advance much of Obama's agenda, especially the transformations in the health-care and energy sectors. Under Senate rules, a minority of 41 senators can block almost any legislation or nomination.
The problem is that the 60 votes aren't sure. There is no guarantee that all 60 will consistently vote to end filibusters mounted by the Republicans. Every issue, every bill is different. The Democratic leaders still have to get the votes of a few moderates of either party, including Pennsylvania's Specter, Democrat Ben Nelson of Nebraska, or Maine Republicans Susan Collins and Olympia Snowe.
Specter said he would not be an automatic 60th vote.
The current lineup in the Senate is 56 Democrats, 41 Republicans and two independents who vote with the Democrats. Democrat Al Franken leads in the Minnesota race, now locked in the courts following a recount.
Read more here
Monday, April 27, 2009
London Bankers Look for Exits After ‘Last Straw’ Tax Increase
(Bloomberg) -- Demetris Efstathiou, a hedge-fund trader and a Londoner for two decades, listened last week to Chancellor of the Exchequer Alistair Darling outline a plan to raise taxes on high earners. Then he decided to leave Britain.
“There is no reason for me to stay here anymore,” said Efstathiou, a 38-year-old Cypriot who moved to London in 1990. “This tax increase is the last straw. This government is no longer interested in the City.”
Prime Minister Gordon Brown’s proposal to boost the tax rate to 50 percent from 40 percent on income above 150,000 pounds ($220,000) pushed headlines about “class warfare” onto the front pages of the capital’s newspapers. It also prompted predictions from business groups that it would undermine the U.K.’s competitiveness and lead to an exodus of financial talent. Brown was portrayed as Vladimir Lenin in a cartoon on Page One of the Daily Telegraph.
The income-tax change, set to take effect next year, would give the U.K. a higher top rate than Spain, Italy, Germany, France and the U.S., according to KPMG, the accounting firm. Among the 30 members of the Organization for Economic Co- operation and Development, the country would jump to seventh from 19th in the rankings of tax rates, accounting firm Ernst & Young said.
The initiative is part of the government’s efforts to contain a planned budget deficit of 12.4 percent of gross domestic product, Britain’s biggest in peacetime. The Treasury expects the tax to raise about 2.2 billion pounds next year when government borrowing will be 173 billion pounds. Darling’s budget calls for 703 billion pounds of deficits in the five years through April 2014.
How Increase Works
Under the new rates, a banker making 350,000 pounds would pay 160,000 pounds in income-tax and national-insurance contributions, according to a government online tax calculator. That’s 22,600 pounds more than the current amount and doesn’t include the elimination of tax relief on the first 6,000 pounds of earnings and the reduction of breaks for pension contributions that Darling is also introducing.
About 350,000 people in the U.K. earn more than 150,000 pounds annually, according to the London-based Institute for Fiscal Studies. About 750,000 make more than 100,000 pounds, and their taxes will also increase after the government scrapped a personal tax-free allowance.
“There is a populist side to this message: Let’s over-tax the rich,” said French-born Philippe Houchois, 45, an analyst in London for Zurich-based UBS AG. The state is encouraging this anger “against banks, against the financial sector.”
Poll Shows Support
The proposal, part of the 2010 budget, is likely to go ahead after Conservative Party leader David Cameron said April 24 that reversing the 50 percent rate wasn’t a priority. About 57 percent of Britons have a “positive view” of the plan, a Populus Ltd. poll published the same day showed. Populus surveyed 518 adults after the April 22 budget speech.
Brown isn’t without supporters in the finance industry.
“We do have a major crisis,” said Bill Blain, a bond broker at KNG Securities LLP in London. “Taxes do need to rise. People in that bracket do need to pay.”
Fleeing bankers may find that taxes are also going up elsewhere. President Barack Obama wants to let the top two U.S. tax brackets increase to 36 percent and 39.6 percent from 33 percent and 35 percent. The top U.S. rate kicks in at $372,950.
Lower Taxes Elsewhere
Countries such as Singapore, where the top rate is 20 percent, and Switzerland have lower taxes. A single banker living in London and earning 350,000 pounds would pay about 40,000 pounds more under the new system than he would in Zurich, according to British and Swiss government figures.
“People are questioning their operations in London,” said Steven Bell, chief economist at the GLC Ltd. hedge fund in London. He was a U.K. Treasury official the last time a Labour government decided to raise taxes on high earners in 1976. The numbers leaving “will be significant,” Bell said.
The move reverses policies dating from former Prime Minister Tony Blair’s election in 1997 that rejected income-tax increases and encouraged wealth creation.
When the Labour Party was previously in power in the late 1970s under Prime Minister James Callaghan, the top tax rate was 83 percent on earned income and 98 percent on unearned income. These were cut to 60 percent and 75 percent when Margaret Thatcher took office in 1979. Blair said his party, re-branded as New Labour, wouldn’t return to the past.
Read more here
“There is no reason for me to stay here anymore,” said Efstathiou, a 38-year-old Cypriot who moved to London in 1990. “This tax increase is the last straw. This government is no longer interested in the City.”
Prime Minister Gordon Brown’s proposal to boost the tax rate to 50 percent from 40 percent on income above 150,000 pounds ($220,000) pushed headlines about “class warfare” onto the front pages of the capital’s newspapers. It also prompted predictions from business groups that it would undermine the U.K.’s competitiveness and lead to an exodus of financial talent. Brown was portrayed as Vladimir Lenin in a cartoon on Page One of the Daily Telegraph.
The income-tax change, set to take effect next year, would give the U.K. a higher top rate than Spain, Italy, Germany, France and the U.S., according to KPMG, the accounting firm. Among the 30 members of the Organization for Economic Co- operation and Development, the country would jump to seventh from 19th in the rankings of tax rates, accounting firm Ernst & Young said.
The initiative is part of the government’s efforts to contain a planned budget deficit of 12.4 percent of gross domestic product, Britain’s biggest in peacetime. The Treasury expects the tax to raise about 2.2 billion pounds next year when government borrowing will be 173 billion pounds. Darling’s budget calls for 703 billion pounds of deficits in the five years through April 2014.
How Increase Works
Under the new rates, a banker making 350,000 pounds would pay 160,000 pounds in income-tax and national-insurance contributions, according to a government online tax calculator. That’s 22,600 pounds more than the current amount and doesn’t include the elimination of tax relief on the first 6,000 pounds of earnings and the reduction of breaks for pension contributions that Darling is also introducing.
About 350,000 people in the U.K. earn more than 150,000 pounds annually, according to the London-based Institute for Fiscal Studies. About 750,000 make more than 100,000 pounds, and their taxes will also increase after the government scrapped a personal tax-free allowance.
“There is a populist side to this message: Let’s over-tax the rich,” said French-born Philippe Houchois, 45, an analyst in London for Zurich-based UBS AG. The state is encouraging this anger “against banks, against the financial sector.”
Poll Shows Support
The proposal, part of the 2010 budget, is likely to go ahead after Conservative Party leader David Cameron said April 24 that reversing the 50 percent rate wasn’t a priority. About 57 percent of Britons have a “positive view” of the plan, a Populus Ltd. poll published the same day showed. Populus surveyed 518 adults after the April 22 budget speech.
Brown isn’t without supporters in the finance industry.
“We do have a major crisis,” said Bill Blain, a bond broker at KNG Securities LLP in London. “Taxes do need to rise. People in that bracket do need to pay.”
Fleeing bankers may find that taxes are also going up elsewhere. President Barack Obama wants to let the top two U.S. tax brackets increase to 36 percent and 39.6 percent from 33 percent and 35 percent. The top U.S. rate kicks in at $372,950.
Lower Taxes Elsewhere
Countries such as Singapore, where the top rate is 20 percent, and Switzerland have lower taxes. A single banker living in London and earning 350,000 pounds would pay about 40,000 pounds more under the new system than he would in Zurich, according to British and Swiss government figures.
“People are questioning their operations in London,” said Steven Bell, chief economist at the GLC Ltd. hedge fund in London. He was a U.K. Treasury official the last time a Labour government decided to raise taxes on high earners in 1976. The numbers leaving “will be significant,” Bell said.
The move reverses policies dating from former Prime Minister Tony Blair’s election in 1997 that rejected income-tax increases and encouraged wealth creation.
When the Labour Party was previously in power in the late 1970s under Prime Minister James Callaghan, the top tax rate was 83 percent on earned income and 98 percent on unearned income. These were cut to 60 percent and 75 percent when Margaret Thatcher took office in 1979. Blair said his party, re-branded as New Labour, wouldn’t return to the past.
Read more here
Thursday, April 23, 2009
AutoNation CEO: Gas is too cheap
(Fortune) -- For most Americans, Topic A in the auto industry right now is the fate of GM. Mike Jackson, 60, the outspoken CEO of the nation's largest auto retailer, AutoNation, has some definite opinions about that subject--and we'll spell them out below. But his own Topic A today is the level of gas prices, which he thinks intolerably low. Here is the conversation that he and FORTUNE senior editor at large Carol Loomis had a few days ago.
Tell me your opinions about the price of gas and what might be done to influence it.
I think we need a revenue-neutral gas tax that puts a floor under the price of gasoline at around $3.50 to $4. The price of gas totally determines the types of vehicles that people buy and how they use them. The fact that America has ignored this reality is the reason why our energy policies have failed for 50 years. With gas now around $2 per gallon, it won't be possible to sell fuel-efficient vehicles. Already, another great migration away from them is underway. I've seen this movie three times in my career.
How would you establish a price floor?
Through taxation. But it doesn't need to happen by next month. If you simply announce that taxes will be put in after the economy recovers, in 2011 or 2012, people will start now to factor that into their decisions.
And how about your revenue-neutral point?
This would be a very painful, regressive tax, which needs to be rebated quickly--maybe through the payroll tax. If there's a rebate, I think the political backlash can be handled.
Read more here
Tell me your opinions about the price of gas and what might be done to influence it.
I think we need a revenue-neutral gas tax that puts a floor under the price of gasoline at around $3.50 to $4. The price of gas totally determines the types of vehicles that people buy and how they use them. The fact that America has ignored this reality is the reason why our energy policies have failed for 50 years. With gas now around $2 per gallon, it won't be possible to sell fuel-efficient vehicles. Already, another great migration away from them is underway. I've seen this movie three times in my career.
How would you establish a price floor?
Through taxation. But it doesn't need to happen by next month. If you simply announce that taxes will be put in after the economy recovers, in 2011 or 2012, people will start now to factor that into their decisions.
And how about your revenue-neutral point?
This would be a very painful, regressive tax, which needs to be rebated quickly--maybe through the payroll tax. If there's a rebate, I think the political backlash can be handled.
Read more here
Wednesday, April 22, 2009
Glaxo Compares Sex Virus Shots, Delay Raises Eyebrows
(Bloomberg) -- GlaxoSmithKline Plc will release the first study to compare its cervical cancer vaccine with Merck & Co.’s blockbuster Gardasil, more than a year after completing the research.
Sales for Glaxo’s Cervarix amount to less than 10 percent of those garnered by Merck’s similar vaccine. The comparison study may influence which product doctors use and insurers pay for. It will be presented for the first time at a medical meeting in Malmoe, Sweden, on May 10, according to a draft of the program obtained by Bloomberg News.
The study also will help governments determine which of the vaccines to select for immunizing women, influencing a global market that Glaxo estimated at more than $10 billion last year. Glaxo’s shot, used less often than Gardasil in Europe, hasn’t won approval in the U.S., where Merck began selling its version three years ago.
Glaxo’s decision to wait 14 months to release the data and pick a little-known medical meeting as the venue “certainly has both my eyebrows up,” said Arthur Caplan, director of the University of Pennsylvania’s Center for Bioethics, in Philadelphia.
“Half the world is waiting to see which vaccine is the better one,” Caplan said. “You have a huge ethical obligation to get information out quickly. I’m never a fan of releasing key findings on a highly contentious issue, such as who’s got the better vaccine, at a relatively unknown meeting.”
The study concluded in March 2008, according to its listing on the U.S. government database that tracks clinical trials.
Two Studies
Cervarix and Gardasil protect women against the sexually transmitted human papillomavirus. The virus can lead to cervical cancer, which kills 250,000 women each year.
Stephen Rea, a spokesman for Glaxo in London, said the company chose the International Papillomavirus conference in Malmoe because it’s “internationally renowned and has a reputation for scientific rigor.”
Glaxo also plans to release another key Cervarix study, known as HPV-008, which tracks the effect of the vaccine on more than 18,600 women, at the meeting. U.S. regulators will use the findings to determine whether to clear the shot later this year. The company wanted to present the two studies “as a package,” Rea said. “Attendees will be able to see presentations on the efficacy study and the head-to-head study” together, he said.
Glaxo needs Cervarix to help offset cheaper generics that eroded U.S. sales of four medicines last year. Profit fell in the past two quarters at the London-based company.
‘Long Delay’
Glaxo shares have dropped 21 percent so far this year, the second-worst performance in a Bloomberg index of 18 European pharmaceutical companies. They fell 31.5 pence, 3 percent, to 1,019.5 pence in London trading, the biggest drop in a month.
Glaxo’s head-to-head study, dubbed HPV-010, measures which vaccine sparked a greater immune system response in more than 1,000 women seven months after the shot.
That means the results won’t say which product works best to keep cancer at bay, though it’s the first indication of the body’s ability to defend itself, said Aaron S. Kesselheim, an expert in pharmaceutical epidemiology and economics at Harvard Medical School and Brigham and Women’s Hospital in Boston. As such, it will help governments decide which product to pick, Caplan said.
“I can’t explain the long delay,” Kesselheim said. “If you have positive results, wouldn’t you want to get it out? If it’s negative, people should know that soon. It’s concerning to me that the turnaround time for getting the data out there is so slow.”
Spitzer Settlement
Glaxo may have taken longer to analyze the research to see whether women were protected against other strains of the virus than the ones contained in the shot, according to Nick Turner, an analyst at Mirabaud Securities in London.
The company has won exclusive contracts to provide Cervarix to young girls and women in the Netherlands and the U.K. since the study was completed. A spokesman at the U.K. Department of Health did not return calls seeking comment. Saskia Hommes, a spokeswoman for the Dutch Ministry of Health, said Cervarix was “cost effective.”
One dose of Cervarix costs about 112 euros ($145) in Europe, compared with about 124 euros for Gardasil. Women need three injections to be protected.
Glaxo, Europe’s fifth-largest drugmaker, has come under fire before for not promptly disclosing study results. When the company found that its Avandia diabetes medicine raised the risk of heart attacks in 2005, it submitted the findings to regulators and posted them on its Web site. It didn’t notify doctors or patients.
Read more here
Sales for Glaxo’s Cervarix amount to less than 10 percent of those garnered by Merck’s similar vaccine. The comparison study may influence which product doctors use and insurers pay for. It will be presented for the first time at a medical meeting in Malmoe, Sweden, on May 10, according to a draft of the program obtained by Bloomberg News.
The study also will help governments determine which of the vaccines to select for immunizing women, influencing a global market that Glaxo estimated at more than $10 billion last year. Glaxo’s shot, used less often than Gardasil in Europe, hasn’t won approval in the U.S., where Merck began selling its version three years ago.
Glaxo’s decision to wait 14 months to release the data and pick a little-known medical meeting as the venue “certainly has both my eyebrows up,” said Arthur Caplan, director of the University of Pennsylvania’s Center for Bioethics, in Philadelphia.
“Half the world is waiting to see which vaccine is the better one,” Caplan said. “You have a huge ethical obligation to get information out quickly. I’m never a fan of releasing key findings on a highly contentious issue, such as who’s got the better vaccine, at a relatively unknown meeting.”
The study concluded in March 2008, according to its listing on the U.S. government database that tracks clinical trials.
Two Studies
Cervarix and Gardasil protect women against the sexually transmitted human papillomavirus. The virus can lead to cervical cancer, which kills 250,000 women each year.
Stephen Rea, a spokesman for Glaxo in London, said the company chose the International Papillomavirus conference in Malmoe because it’s “internationally renowned and has a reputation for scientific rigor.”
Glaxo also plans to release another key Cervarix study, known as HPV-008, which tracks the effect of the vaccine on more than 18,600 women, at the meeting. U.S. regulators will use the findings to determine whether to clear the shot later this year. The company wanted to present the two studies “as a package,” Rea said. “Attendees will be able to see presentations on the efficacy study and the head-to-head study” together, he said.
Glaxo needs Cervarix to help offset cheaper generics that eroded U.S. sales of four medicines last year. Profit fell in the past two quarters at the London-based company.
‘Long Delay’
Glaxo shares have dropped 21 percent so far this year, the second-worst performance in a Bloomberg index of 18 European pharmaceutical companies. They fell 31.5 pence, 3 percent, to 1,019.5 pence in London trading, the biggest drop in a month.
Glaxo’s head-to-head study, dubbed HPV-010, measures which vaccine sparked a greater immune system response in more than 1,000 women seven months after the shot.
That means the results won’t say which product works best to keep cancer at bay, though it’s the first indication of the body’s ability to defend itself, said Aaron S. Kesselheim, an expert in pharmaceutical epidemiology and economics at Harvard Medical School and Brigham and Women’s Hospital in Boston. As such, it will help governments decide which product to pick, Caplan said.
“I can’t explain the long delay,” Kesselheim said. “If you have positive results, wouldn’t you want to get it out? If it’s negative, people should know that soon. It’s concerning to me that the turnaround time for getting the data out there is so slow.”
Spitzer Settlement
Glaxo may have taken longer to analyze the research to see whether women were protected against other strains of the virus than the ones contained in the shot, according to Nick Turner, an analyst at Mirabaud Securities in London.
The company has won exclusive contracts to provide Cervarix to young girls and women in the Netherlands and the U.K. since the study was completed. A spokesman at the U.K. Department of Health did not return calls seeking comment. Saskia Hommes, a spokeswoman for the Dutch Ministry of Health, said Cervarix was “cost effective.”
One dose of Cervarix costs about 112 euros ($145) in Europe, compared with about 124 euros for Gardasil. Women need three injections to be protected.
Glaxo, Europe’s fifth-largest drugmaker, has come under fire before for not promptly disclosing study results. When the company found that its Avandia diabetes medicine raised the risk of heart attacks in 2005, it submitted the findings to regulators and posted them on its Web site. It didn’t notify doctors or patients.
Read more here
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