Thursday, February 26, 2009
If you're not subscribing, you're probably losing more money than you have to.
Here's what more he wrote: "This is a business where you can never relax, and say, "yeah, I get it." Because nobody gets it for long. For instance, yesterday I listed the reasons why I thought the primary trend of the market was bearish. But in the back of my mind I'm saying to myself, "The Dow topped out at 14164 and collapsed to 7350, a huge loss of 6814 points. Somewhere ahead we're going to get a full correction of those losses. A 50% correction (not impossible) could take the Dow back to well over 10,000. And wouldn't that be a shocker! Everybody would be convinced that the bull market had returned, and the public would rush back into the market in the hopes of making up for their losses. "Yeah, I think of that, and I watch for signs of a strengthening of the market. I don't see healthy signs yet, not in my PTI, not in the Lowry's studies. But I know that somewhere ahead the "big fooler" will arrive, and it will kill the shorts, and ultimately it will double-cross the public. That's the way bear markets work. Subscribers who have my history of the Averages chart books can follow some of the previous bear markets, to see what I'm talking about (and yes, I sell chart books of the D-J Averages going back to the beginning)."
A batch of sour economic data added to the gloom, spurring investors to sell shares in big consumer companies such as McDonald's Corp (MCD.N) and Coca-Cola Co (KO.N), which slid 3 percent.
The plan to expand healthcare coverage and curb costs calls for cutting Medicare payments to private insurers, letting consumers buy cheaper medicines and preventing drug companies from making deals that block generic competition. For details see [ID:nN26548210].
Merck was the Dow's biggest weight, down 6.7 percent at $26.04. Health insurers also fell, including Humana (HUM.N), which lost 19.5 percent to $23.64.
"They are certainly looking at providing healthcare across the board for everyone, but to pay for that they are looking to obviously reduce revenue for some of the healthcare agencies," said Peter Jankovskis, director of research at OakBrook Investments LLC in Lisle, Illinois.
The Dow Jones industrial average .DJI dropped 88.81 points, or 1.22 percent, to 7,182.08. The Standard & Poor's 500 Index .SPX shed 12.07 points, or 1.58 percent, to 752.83. The Nasdaq Composite Index .IXIC fell 33.96 points, or 2.38 percent, to 1,391.47.
Wednesday, February 25, 2009
Please note these amounts reflect what the Department of Justice and other government agencies, such as the FDA and SEC, have reported in press releases and may exclude some state settlements. They DO NOT reflect settlement with private parties in civil suits or class action litigation. Some individual companies have paid more than $20 billion to resolve such litigation.
Tuesday, February 24, 2009
Monday, February 23, 2009
Saturday, February 14, 2009
Thursday, February 12, 2009
-Dr. Tim Anderson at Sanford C. Bernstein in a voicemail blast to clients this morning.
Anderson "almost wonders"?!
So, Kilts, what is wrong with Pfizer's stock?
Why don't you buy some?
Why hasn't ANY insider at Pfizer bought ANY Pfizer stock during the last six months?
Pfizer board member dumped most of his PFE stock--his portfolio manager was unauthorized to trade, Pfizer says.
Kilts, 61, the former chief executive officer of Gillette Co., sold 13,905 Pfizer shares for $259,772 from June 3 to June 6, according to a U.S. Securities and Exchange Commission filing today. Kilts sold the shares for $18.99 to $18.30 each, at least 21 percent higher than today’s closing price of $14.38 in New York Stock Exchange composite trading.
Kilts’ portfolio manager sold the shares against Kilts’ instruction and without his knowledge, the filing said. Pfizer agreed Jan. 26 to buy Wyeth and cut its dividend in half. Both Pfizer and Wyeth said their negotiations began last summer, though they wouldn’t specify a date.
“Contrary to the direction of Jim Kilts’ explicit instructions not to engage in any transaction in Pfizer stock without his prior approval, Jim Kilts’ portfolio manager sold shares of Pfizer in early June 2008,” Pfizer spokesman Ray Kerins said in a statement. “Neither Mr. Kilts nor Pfizer was aware of these sales. Once Mr. Kilts became aware of these sales, he immediately notified Pfizer, and Pfizer made a prompt and appropriate disclosure on his behalf.”
Kilts still owns 2,200 Pfizer shares, the filing said.
The SEC requires company insiders to document share sales within two days. Kilts will be listed in Pfizer’s annual proxy statement as a late filer.
Kilts, the founding partner of private equity firm Centerview Partners LLP in New York, didn’t return a phone call left with his assistant.
Wednesday, February 11, 2009
Rep. Kanjorski: "It would have been the end of our economic system and our political system as we know it."
Kanjorski's bombshell begins to detonate at roughly 2:10 into the video.
From the video:
"I was there when the secretary and the chairman of the Federal Reserve came those days and talked to members of Congress about what was going on... Here's the facts. We don't even talk about these things.
On Thursday, at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two.
The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.
They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic and there. And that's what actually happened.
If they had not done that their estimation was that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.
Now we talked at that time about what would have happened if that happened. It would have been the end of our economic system and our political system as we know it. "
More here on this topic.
Here's the video's url:
“All you need to do is grant visas to two million Indians, Chinese and Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper. “We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate — no Indian bank today has more than 2 percent nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans.”
While his tongue was slightly in cheek, Gupta and many other Indian business people I spoke to this week were trying to make a point that sometimes non-Americans can make best: “Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.”
Continued: NY Times
John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral.
You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John's $10 to make up the rest.
You brag to everyone about your financial health. You have assets--two cows you own, plus one Paulson owes you--worth $300, and liabilities of just $100.
A third of the country goes vegetarian.
You thought your two cows were worth $200 and now they are worth $140.
You express confidence in your financial health. Your assets are now worth only $200--your two cows plus the one John owes you--but your liabilities are still only $100. If necessary, you could sell the assets at this distressed price and pay off all your loans.
You hold onto your cows because you are sure the market is "dislocated." Some day someone will want to eat beef again.
The rest of the country goes vegetarian. Your two cows are now worth $2 each to guys who want to make dog food.
John Paulson buys a cow in the market for $2 and he gives it to you as repayment of the loan. You now have three cows worth six bucks.
John wants his $10 back.
The bank calls. It wants its $90 back.
You call the Federal Reserve and ask for a bailout.
Friday, February 06, 2009
Pfizer Vice President Worldwide Communications: “How in the hell do we have such a bad reputation?!”
In 2007, on the second day of his new job as Pfizer's global PR chief, Ray Kerins said he was told of an unwritten rule: ignore the first question received from any reporter on any given issue . . . he is now asking his people to spend more time with journalists.
Tuesday, February 03, 2009
The Greenlining Institute: "Pfizer Inc.’s Wyeth acquisition perverts the U.S. government’s Troubled Asset Relief Program"
The Greenlining Institute asked the Justice Department and Treasury Secretary Timothy Geithner to block the $64.6 billion transaction unless the companies lower consumer drug prices, said Bob Gnaizda, an attorney for the public policy group, in a telephone interview today. The letters, sent Jan. 29 by the Berkeley, California, group, ask whether the deal abuses taxpayer funds.
TARP funds were meant to bolster the economy by promoting lending, not finance job cuts, Gnaizda said. Pfizer, based in New York, said 19,500 jobs will be eliminated from the combined companies. The deal is financed by $22.5 billion in loans from banks that received at least $75 billion from the Treasury Department’s rescue plan, the drugmaker said on Jan. 26.
Backing the acquisition with bailout money is “a kind of perversity,” Gnaizda said. “There’s no way this deal could occur without the use of TARP money.”
Pfizer climbed 31 cents, or 2.1 percent, to $14.89 in New York Stock Exchange composite trading at 4:15 p.m. The world’s largest drugmaker fell 16 percent last week after the deal was announced and lost 37 percent in the past 12 months. Wyeth, based in Madison, New Jersey, rose 23 cents, or less than 1 percent, to $43.20.
Drop ‘Not Unusual’
Pfizer’s drop last week, which reduced the value of the deal from its initial $68 billion, is “not unusual” for acquisitions, Chief Executive Officer Jeffrey Kindler said in an interview on CNBC television today. The company’s decision to halve its quarterly dividend also had an impact on shares, Kindler said.
The Justice and Treasury departments haven’t responded to the letters, Gnaizda said. Spokesmen for the departments didn’t immediately return calls seeking comment. Ray Kerins, a Pfizer spokesman, said he couldn’t respond to the complaint because he hadn’t seen it.
JPMorgan Chase & Co., Bank of America Corp., Barclays Plc, Citigroup Inc. and Goldman Sachs Group Inc. assembled the loan package for Pfizer. All but Barclays have tapped TARP, according to data gathered by Bloomberg.
The deal amounts to “a bailout of two of America’s largest big pharma companies and sets a precedent for similar misuses of TARP funds,” Greenlining’s letter to Geithner says.
The letter to Attorney General Eric Holder and the Justice Department’s antitrust division asks the government to block the deal unless Pfizer and Wyeth agree to sell medicines in the U.S. at no more than the lowest price they charge in Europe, Canada and other developed countries, Gnaizda said.
“You have the use of this money to promote something that’s anticompetitive and against the public interest and is also taking scarce funds away from what otherwise would be lending to small businesses,” Gnaizda said in the interview.
The complaints are unlikely to delay the deal, though they will create “perception problems” for Pfizer in the future, said Les Funtleyder, a Miller Tabak & Co. analyst in New York, in a telephone interview.
Pfizer shares rose today on Kindler’s public comments and a broader rise in financial markets, Funtleyder said. The Standard & Poor’s 500 Pharmaceutical Index, including Pfizer and 12 other companies, rose 0.7 percent today.
“The stock couldn’t keep going down forever,” Funtleyder said.
The acquisition prompted two lawsuits from Wyeth shareholders who said their board should have held out for a better price.
The deal deprives investors of “the full benefit of the company’s stronger patent portfolio,” shareholder Anna Meisher said in a complaint filed Jan. 30 in Delaware Chancery Court. Meisher asked a judge to declare the deal “unlawful and unenforceable,” and rescind any merger agreement.
Pfizer said Jan. 26 it would pay $33 plus 0.985 of a Pfizer share for each share of Wyeth, valuing shares of Wyeth at $50.19. The value has fallen as Pfizer shares declined.
The case is Anna Meisher v. Bernard Poussot, CA4329, Delaware Chancery Court (Wilmington). The second complaint, filed Jan. 27, is Sheldon Drogin v. Wyeth, 09-cv-383, U.S. District Court, District of New Jersey (Newark).
To contact the reporter on this story: Alex Nussbaum in New York email@example.com.
Monday, February 02, 2009
African families' damage claims for billions of dollars against Pfizer for allegedly secretly testing a new drug in a Nigerian hospital during a 1996 meningitis outbreak were revived Friday by a divided federal appeals court.
The ruling allows 88 Nigerian families to pursue claims under a law adopted in 1789 that gives foreigners the right to raise tort claims in federal court to vindicate violations of "the laws of nations."
In 89 pages containing numerous barbed comments, the 2nd U.S. Circuit Court of Appeals majority and dissent differed over whether the families' claims that their children had been subjected to medical experimentation without their consent fell within the 18th-century law.
In concluding that the law embraces claims of unconsented medical experimentation, Judge Barrington D. Parker wrote for the majority that the dissent took an approach to "customary" international law that is "unselfconsciously reactionary and static."
In dissent, Judge Richard C. Wesley described the majority as creating a new norm "out of whole cloth" upon the basis of "materials inadequate to the task."
The families claim Pfizer recruited 200 Nigerian children who were felled by meningitis during the epidemic, and treated half of them with a new antibiotic, Trovan. The other half, they allege, were given Ceftriaxone, an FDA-approved drug.
The test went forward, according to the plaintiffs, without the families being told the nature of the experiment or possible life-threatening side effects of using Trovan. They also charge that a deliberately low dose of Ceftriaxone was administered to boost the apparent effectiveness of Trovan.
According to the families, the experiment resulted in the deaths of 11 children and left many others blind, deaf, paralyzed or brain damaged.
In a statement Friday, Pfizer said its 1996 clinical study was conducted with the consent of the children's parents and "was consistent with both international and Nigerian laws."
Any deaths or injuries were "the direct result of the illness, and not the treatment provided to patients in the Pfizer study," the company stated.
The drug maker expressed confidence it will prevail and said it is weighing its legal options.
The case may yet be heard in Nigeria because the 2nd Circuit, upon the agreement of the parties, did not review that portion of Southern District of New York Judge William H. Pauley's ruling dismissing the case on the ground of forum non conveniens.
Pfizer advised the circuit that it would not seek affirmance on that ground, citing what the opinion described as "a tectonic change" in the political landscape in Nigeria.
In mid-2007, the Nigerian government sued Pfizer for $7 billion and the state of Kano in northern Nigeria, where the children were treated, brought criminal and civil cases against Pfizer.
Peter Safirstein of Milberg, who is representing 30 families, said none of the Nigerian lawsuits seeks to recover damages for individuals. He added that the Southern District suit does not specify a damages figure.
Richard Altschuler, of Altschuler & Altschuler in West Haven, Conn., said he is seeking to recover $2 billion in damages for the 58 families he represents.
The appeal of the two cases was consolidated under the caption, Abdullahi v. Pfizer, 05-4863 and 05-6768.
LAW NARROWLY INTERPRETED
Both the majority and dissent recognized that the 1789 law, the Alien Tort Statute, 28 U.S.C. §1350, has been narrowly interpreted.
Judge Parker described the statute as providing jurisdiction in just two cases in its first 190 years. The law has been construed "slightly more robustly" in the next 30, he added. Both Parker and Judge Wesley noted that the leading U.S. Supreme Court case construing the act, Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), requires "vigilant gatekeeping."
In concluding that claims of unconsented medical experimentation are cognizable under the act, Parker cited the first principle of the Nuremberg Code, which states that in medical experiments, "the voluntary consent of the human subject is absolutely essential."
The 10-principle code was formulated as part of a war crimes trial conducted after World War II in which 15 doctors were convicted of crimes against humanity for conducting unconsented experiments. Seven of the doctors were sentenced to death.
"History illustrates that from its origins with the trial of Nazi doctors at Nuremberg through its evolution in international conventions, agreements, declarations and domestic laws, the norm prohibiting nonconsensual medical experimentation on human subjects has become firmly embedded and secured universal acceptance in the community of nations," Parker wrote.
Judge Rosemary Pooler joined the majority.
But Wesley contended the Nuremberg trials and the international agreements cited by the majority did not establish a private right of action against non-state actors.
The Nuremberg cases, he wrote, were "premised primarily, on the defendants' forced medical experiments, which constituted war crimes when performed on prisoners of war and crimes against humanity when conducted on Nazi concentration camp prisoners."
While the plaintiffs "paint a picture of unbelievable pain and suffering," they have not alleged those "rare acts by private individuals" that the world has "collectively" determined are "so serious as to threaten the very fabric of international affairs."
Pfizer was represented by Steven Glickstein, David Klingsberg, Maris Veidemanis, James D. Herschein and Julie B. du Pont of Kaye Scholer.
Elaine S. Kusel, Ann M. Lipton, Andrew Wilmar and Tatiana Rodriquez worked with Safirstein of Milberg, and Ali Ahmad worked with Altschuler.
Op-Ed By JOHN ABRAMSON, M.D.
It's perfect. Pfizer buys Wyeth's pipeline, the behemoth marketing power of
Pfizer gets leveraged, the work force gets consolidated and the $22 billion
borrowed is read as a sign that banks are willing to lend again.
Well, not quite perfect but pretty darned good.
The problem is: pretty darned good for whom? Both Pfizer and Wyeth are
attending to their primary responsibility: maximizing profits and delivering
them to shareholders. Improving Americans' health most effectively and
efficiently is not their job, but convincing us all -- including doctors --
that it is, is.
We desperately need to find a way to contain health care costs and at the
same time improve access. Seems impossible, but the almost unimaginable
level of dysfunction in American health care actually creates enormous
It's hard to believe that despite spending twice as much per person as the
other industrialized countries, Americans live an average of 1½ years less
in good health. And if the rate of potentially preventable deaths in the
United States were declining as quickly as it is in Austria, Ireland and
Norway -- three countries that lead in this respect, and each spend about
half as much per person on health care as the United States does -- 100,000
fewer Americans would be dying each year.
The core problem with American medicine isn't really access or cost. It's
that medical knowledge itself has been turned into a commodity, produced and
disseminated with the primary goal of optimizing profits rather than health.
Eighty-five percent of clinical trials are now commercially funded, and the
odds are four to five times greater that the commercially funded trials will
conclude that the sponsor's drug is the treatment of choice compared with
noncommercially funded trials of exactly the same drugs, according to a
lecture given at Harvard Medical School in October by Dr. Catherine D.
DeAngelis, the editor in chief of the Journal of the American Medical
That's just the beginning.
Those studies are then bundled into review articles (often sponsored by the
drug maker); presented at continuing medical education courses that are
funded directly or indirectly by the drug maker; supported by "key opinion
leaders," recognized experts who happen to be getting paid by the drug
maker; incorporated into guidelines -- the majority of expert authors having
financial ties to one or more of the drug companies making a drug being
considered in the guidelines; and, of course, touted by the drug reps lining
up to get some face time with the doctors, who -- according to the
Pharmaceutical Research and Manufacturers of America's research --
overwhelmingly find the information delivered by the reps up to date, useful
The Failure of the Medicine Market
What we've got is a good old-fashioned case of market failure. But
understanding the magnitude and consequences of the failure of the market to
oversee the relevance and integrity of commercially generated medical
knowledge is virtually impossible to see unless you're a corporate insider
or have a subpoena to gain access to the unspun scientific evidence (closely
held as proprietary information by the drug companies) and other corporate
Actually it's a double failure.
First, the kinds of things that get researched are those that offer the
greatest potential return on investment. So our medical knowledge grows in
the direction that is most profitable for the medical industry and all too
often, this is not the direction that will improve Americans' health most
effectively and efficiently.
Then we get into the failure to ensure the integrity of the commercially
produced medical knowledge that informs doctors' prescribing decisions. For
example, on the same day (perhaps not coincidentally) that Pfizer's plan to
acquire Wyeth was announced, Pfizer also announced a pending $2.3 billion
settlement with the Department of Justice to settle allegations that it
marketed its arthritis drug Bextra off-label (allegedly having encouraged
doctors to prescribe Bextra for conditions for which the FDA had not deemed
the drug effective). The second story got far less coverage, probably as a
result of Pfizer's fortuitous choice of that particular day to announce the
record-shattering settlement in process.
And in order to pay for Wyeth, Pfizer will borrow $22 billion from Goldman
Sachs, JP MorganChase, Citigroup and Bank of America -- all banks under
pressure to increase lending since accepting government bailout funds.
So what effect will Pfizer's acquisition of Wyeth have on American health
Pfizer's purchase of Wyeth will diminish its imperative to develop new
products that genuinely improve health to replace the older blockbuster
drugs going off patent; the new Pfizer will have even greater marketing
power to convince doctors and patients to use its products (often in lieu of
less expensive and more effective approaches); attention is being
effectively deflected from Pfizer's pending $2.3 billion payment to the
Department of Justice for allegedly illegal marketing Bextra; and instead of
federal bailout money being used to save jobs, the taxpayers' money will be
used to put at least 18,000 hardworking, well-trained Americans out of work.
Pfizer's acquisition of Wyeth might be pretty darned good for the
shareholders and some of the executives, but it sure won't help the American
This work is the opinion of the author and in no way reflects the opinion of
Dr. John Abramson, a clinical instructor at Harvard Medical School, is the
author of "Overdosed America: The Broken Promise of American Medicine" and
serves as an expert to plaintiffs' counsel in litigation involving the
pharmaceutical industry, including both Pfizer and Wyeth.