A roundup of news from the financial world

April 26, 2013
pharmaceutical
Novartis again sued
by U.S. for civil fraud

The U.S. government on Friday announced its second civil fraud lawsuit against Novartis in four days, accusing a unit of the Swiss drugmaker of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs.

U.S. Attorney Preet Bharara in Manhattan said the government joined a whistleblower lawsuit filed against Novartis Pharmaceuticals in January 2011 that seeks triple damages under the federal False Claims Act.

The government accused Novartis of causing the Medicare and Medicaid programs to pay millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and diabetes drug Starlix.

Twenty-seven states, the District of Columbia and the cities of New York and Chicago also joined as plaintiffs.

On Tuesday, the government accused Novartis of inducing pharmacies to switch thousands of kidney transplant patients to its drug Myfortic in exchange for kickbacks disguised as rebates and discounts.

Novartis spokeswoman Julie Masow said the company disputes the claims in both lawsuits and will defend itself.

— Reuters

manufacturing
Dreamliner flights
to resume in Japan

Boeing’s 787 Dreamliner is poised to resume flights in Japan, ending a more than three- month hiatus that grounded 24 planes owned by ANA Holdings and Japan Airlines.

ANA said it will conduct the jet’s first test flight on Sunday, after Japan on Friday approved the restart of 787 flights with upgraded batteries. The government’s permission is for all flights, including test and commercial services, said Shigeru Takano, a director at the ministry’s Civil Aviation Bureau.

The move will kick-start resumption of flights with 787s, which were ordered parked on Jan. 16 after lithium-ion batteries on two Dreamliners overheated and smoldered.

ANA Chief Executive Shinichiro Ito and Ray Conner, president of Boeing Commercial Airplanes, will be aboard Sunday’s flight, the airline said.

Boeing dispatched about 300 personnel on 10 teams to airlines to install the fix over five days while preparing to hand over the new 787s.

Ethiopian Airlines Enterprise plans its first Dreamliner flight with the upgraded batteries Saturday, a trip from Addis Ababa to Nairobi. United Continental Holdings, the only U.S. carrier that has received Dreamliners, sent the first of its 787s to a Boeing facility in San Antonio this week to get the new system installed.

— Bloomberg News

Also in Business

l  New York City is suing BP over the drop in its stock price after the 2010 Gulf of Mexico oil spill, saying its pension funds lost $39 million. The lawsuit in federal court in New York claims BP failed to tell shareholders about the risks of its offshore drilling, and that after the spill it tried to minimize the cost to shareholders. BP is facing a number of shareholder lawsuits over the spill, including a class-action federal suit in which the New York State Common Retirement Fund is a lead plaintiff, along with the Ohio attorney general representing four public pension funds.

l  Chevron, the world’s third-biggest energy company by market value, reported first-quarter profit that exceeded analysts’ estimates after boosting natural gas output amid rising prices for the fuel. Net income declined 4.5 percent to $6.18 billion from $6.47 billion a year earlier, the San Ramon, Calif.-based company said Friday. Chevron’s earnings from oil and gas wells outside the United States rose 3.1 percent to $4.78 billion as increased gas output more than offset lower crude production. In the United States, the company raised gas output from new wells in Appalachia’s Marcellus Shale formation, where most of the drilling costs are being borne by India’s Reliance Industries under the terms of a joint venture.

l  Burger King’s first-quarter earnings more than doubled even though revenue fell, as the fast-food chain trimmed several restaurant-related expenses. Sales at established restaurants declined 1.4 percent, including a 3 percent drop in the United States and Canada. Overall, Burger King Worldwide said Friday its net income rose to $35.8 million, up from $14.3 million a year earlier. Revenue fell about 42 percent to $327.7 million. Total restaurant expenses, which include food costs and payroll expenses, fell nearly 70 percent in the quarter to $108.1 million.

l  Oil rose more than 5 percent this week, even with a decline on Friday, as traders concluded that last week’s dive to a low for the year was overdone. The price of oil slipped Friday after a report showing that growth picked up in the U.S. economy last quarter, but not as much as expected. Benchmark oil for June delivery fell 64 cents to $93 a barrel. Still, oil rose $4.99 a barrel this week. The 5.6 percent increase was the largest weekly gain of the year. Oil hit a low of $86.68 last week.

l  Tesla Motors, the luxury battery-car company run by billionaire Elon Musk, is North America’s rechargeable auto sales leader so far this year as its Model S sedan passed General Motors’ Chevrolet Volt. Tesla expects to report at least 4,750 deliveries of the electric Model S in the United States and Canada when it releases first-quarter results May 8, said Shanna Hendriks, a company spokeswoman. That compares with 4,421 Volt sales in North America and 3,695 deliveries of Nissan Motor’s Leaf, based on data provided by the carmakers.

— From news services

Coming Next Week

l  In Sunday Business: You too could be Mr. Money Mustache and retire at 30.

l  Monday: Personal income data for March released at 8:30 a.m. Pending home sales for March released at 10 a.m.

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