Wednesday, February 29, 2012

(BN) Obesity Epidemic Prompting Vivus Takeover Talk With 88% Windfall: Real M&A

Bloomberg News, sent from my iPhone.

Obesity Prompts Vivus Takeover Talk With 88% Windfall: Real M&A

Feb. 29 (Bloomberg) -- Vivus Inc.'s shareholders are poised to reap an 88 percent windfall in a takeover after the company's weight-loss drug moved one step closer to winning approval to treat America's 78 million obese adults.

A panel of U.S. Food and Drug Administration advisers voted 20-2 last week that the benefits of Vivus's Qnexa pill outweigh its risks, a recommendation that could lead to the first new FDA-approved weight-loss drug since 1999. An approval would make the company worth as much as $40 a share to potential acquirers, said Cowen & Co., valuing Mountain View, California-based Vivus at $3.6 billion. The 88 percent premium would be four times the industry average and the second-highest for a drug takeover over $1 billion, according to data compiled by Bloomberg.

Vivus could now lure interest from Johnson & Johnson, Merck & Co. and Bristol-Myers Squibb Co., with annual sales of the Qnexa pill projected to reach $5 billion by 2020, according to Rodman & Renshaw LLC. After more than a decade of weight-loss treatments presented risks from heart disease to brain tumors, the FDA's receptivity to Qnexa may also put rival obesity-drug developers Orexigen Therapeutics Inc. and Arena Pharmaceuticals Inc. in play as more than one-third of U.S. adults suffer from obesity, JMP Securities said.

"The FDA has clearly crossed the Rubicon of balancing risk and benefit, understanding that the obesity problem is a pandemic," Michael King, a New York-based analyst at Rodman & Renshaw, said in a telephone interview. "There are not a lot of products around in the pharmaceutical industry that address such large market opportunities. Vivus is not going to give this up cheap."

Losing Weight

If Qnexa is approved, Vivus plans to market the drug in the U.S. on its own, and to seek a marketing partner for outside the U.S., Ashley Buford, an outside spokeswoman for Vivus, said in an e-mail. She declined to comment further.

Vivus rose 5.8 percent to $22.50 today after earlier climbing as much as 10 percent.

Carol Goodrich, a spokeswoman for New Brunswick, New Jersey-based J&J, and Jennifer Fron Mauer of Bristol-Myers in New York said the companies don't comment on takeover speculation. Ron Rogers, a spokesman for Whitehouse Station, New Jersey-based Merck, didn't return phone and e-mail requests for comment.

Qnexa, which Vivus says helps patients lose 10 percent of their body weight, is ahead of rival obesity drugs including Orexigen's Contrave and Arena's lorcaserin, with a decision from regulators due by April 17.

'Nothing's Ever Guaranteed'

While the FDA isn't obligated to follow the panel's Feb. 22 recommendation, the advisers signaled the regulator's receptivity to Qnexa and other obesity drugs, said Ken Kam, who owns Vivus shares as chief executive officer of Los Altos, California-based Marketocracy Inc.

"Nothing's ever guaranteed until the FDA issues the letter, but this is as strong an indication it's going to get approved as I've ever seen," Kam said in a phone interview.

Worldwide obesity has more than doubled since 1980, according to the World Health Organization, and the Centers for Disease Control and Prevention calls it an epidemic. A person is considered obese if his or her body mass index, a measure of fat that divides weight by the square of one's height, is higher than 30.

"There is pressure to get something on the market, given everyone talking about the obesity epidemic and needing another tool for dealing with obesity," Simos Simeonidis, a New York- based analyst at Cowen, said in a phone interview.

Heart Attacks

The last prescription weight-loss drug approved by the FDA was Roche Holding AG's Xenical in 1999. New therapies have all stumbled over safety hurdles at the FDA, including Abbott Laboratories' diet pill Meridia, which was removed from U.S. shelves in October 2010 on concern about its links to heart attacks and strokes.

Safety issues also prompted the withdrawal of Wyeth's fen- phen diet-drug combination in 1997. More than 6 million prescriptions were written for fen-phen before it was pulled from the market for links to heart damage and primary pulmonary hypertension, a lung disease.

"Think of all the crazy things people do to lose weight," said King of Rodman & Renshaw. "If they hear about something that now has the imprimatur of the FDA to be shown safe and effective, why wouldn't they at least try it?"

The promise of Qnexa -- a combination of topiramate, used for seizures and migraines, and the appetite suppressant phentermine -- means Vivus may now be an acquisition target, said Simeonidis.

Takeover Premium

"I expect Qnexa to be approved, and I would not be surprised to see a takeout," he said. "This is a potentially large drug, and it's going to be utilized best in the hands of a large pharmaceutical company that has a primary-care sales force in place and can make the most of its commercialization potential."

Vivus may fetch more than $40 a share in a takeover if Qnexa is approved, according to Simeonidis, based on his estimate that the medicine could pull in $2.2 billion in annual revenue by 2019.

At 88 percent more than yesterday's closing price, that would be four times the average 22 percent premium paid in takeovers greater than $1 billion in the medical drug industry, a sector of pharmaceuticals that excludes generic drugs and biomedical companies, data compiled by Bloomberg show. It would be the industry's second-highest on record after the 94 percent premium Gilead Sciences Inc. offered for Pharmasset Inc. in November, the data show.

'The Driver's Seat'

Vivus had already increased 102 percent through yesterday to $21.26 since the panel's decision was announced, adding $957 million to the company's market value. A takeover at $40 a share would boost stockholder value by another $1.7 billion.

"I would expect the price to be very high," Kam said. "If there is an interest, Vivus is in the driver's seat because they don't need to sell."

Competition to buy Vivus for the chance to mass-market the new drug will drive up the takeover price, Simeonidis said.

J&J, Merck and Bristol-Myers may all be interested buyers because of the prevalence of obesity and the cost efficiency of using their own sales teams, said Rodman's King. Qnexa has a net present value of $2.8 billion, based on estimated penetration rates, length of therapy and price for the drug, if it's approved, King said. An acquirer would need to pay at least that much for the whole company, he said.

J&J already sells one ingredient in Qnexa called topiramate, which it markets as Topamax for seizures and migraines. The drug was one of the company's top sellers before it lost patent protection in 2009. Merck and Bristol-Myers are also logical buyers because they already have metabolic-disease franchises through diabetes medicines, King said.

Clinical Trial

The FDA could still require a clinical trial assessing the cardiovascular safety of Vivus's drug before allowing it on the market, Charles Duncan, a New York-based analyst at JMP Securities, said in a phone interview last week. It may approve the drug by the April due date, or issue additional requirements that could be satisfied by year-end such as finishing details on a post-market study.

Qnexa was rejected by regulators in October 2010 over concern the medicine may cause birth defects and increased heart rate. Even if the drug gets approved, pharmaceutical companies may hold off on an acquisition to be sure of the potential side effects, said Les Funtleyder, a health strategist and portfolio manager at Miller Tabak & Co. in New York, where he helps oversee $500 million in assets.

'Radical Transformation'

"Down the road, if some of these drugs succeeded and there weren't any unfavorable off-target impacts, then perhaps" the makers of weight-loss drugs could be acquired, Funtleyder said in a phone interview. Success, particularly FDA approval, "breeds deal activity," he said.

While La Jolla, California-based Orexigen and Arena of San Diego are trailing Vivus, the panel's vote on Qnexa was "a little bit of a tide that lifted all boats," Duncan said.

Orexigen makes Contrave, which is a closer competitor to Vivus's Qnexa than Arena's lorcaserin based on safety and efficacy, Duncan said. Lorcaserin is a "totally novel agent" with less-understood risks, he said.

Orexigen shares had climbed 143 percent this year through yesterday for the second-biggest gain among 286 stocks in the Russell 2000 Health Care Index, giving the company a market value of $210 million. Vivus had posted the third-biggest increase at 118 percent. Arena, valued at $287 million, was down 1.6 percent.

Brain Tumors

"All three are takeout candidates," Duncan said. "The problem with obesity-drug development is there are so many questions. In the next 12 months we're going to see a radical transformation of the field."

In September Orexigen agreed with the FDA to run a two-year clinical trial on heart risks for Contrave, reviving stalled development of the medicine in the U.S. The company is partnered with Osaka, Japan-based drugmaker Takeda Pharmaceutical Co., a likely buyer if the drug shows success, Duncan said.

A phone call and e-mail to Takeda's North American media department weren't returned.

While Orexigen now aims to obtain FDA approval in 2014, Arena's drug lorcaserin is due to receive a regulatory verdict in June 2012. Arena was rejected by the FDA in October 2010 after lorcaserin was shown to have a potential link to brain tumors. The company said in August that concentrations of the pill were lower in human brains than rat models, suggesting humans are less likely to develop the slow-growing tumors.

Race for Approval

Jay Hagan, chief business officer of Orexigen, declined to comment on mergers and acquisitions. The company is partnered with Takeda in North America, and will run a process to find a partner to market the drug in the rest of the world, he said. Orexigen hasn't indicated when it will apply for approval in Europe.

"Arena is focused on preparing for its FDA advisory committee meeting in the second quarter," David Schull, an outside spokesman for the company, said in an e-mail. He declined to comment further.

Closely held drugmaker Zafgen Inc., which is wrapping up phase 1b trials of its obesity drug beloranib that affects the way the body metabolizes fat, has received acquisition interest from large pharmaceutical companies, CEO Tom Hughes said in a phone interview. Zafgen aims to file an application with the FDA in 2016.

"There is new interest in the renewed belief that obesity products might be approved," Hughes said.

Despite the race for regulatory approval from the developers of other obesity drugs, Vivus has the highest probability of being acquired, said Cowen's Simeonidis.

"From a purely financial perspective, the potential cash flows and the size of the opportunity makes them very attractive," said Kam of Marketocracy. "Just think what percentage of people would want to lose 10 percent of their weight without having to change their diet or exercise habits. It could be huge."

To contact the reporters on this story: Meg Tirrell in New York at Tara Lachapelle in New York at .

To contact the editors responsible for this story: Daniel Hauck at Katherine Snyder at Reg Gale at .

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(BN) Buffett Plans More Solar Bonds After Oversubscribed Deal

Bloomberg News, sent from my iPhone.

Buffett Plans More Solar Bonds After Oversubscribed Deal

Feb. 29 (Bloomberg) -- Warren Buffett's MidAmerican Energy Holdings Co. is planning to sell more bonds to finance its $2.4 billion Topaz Solar Farm in California after investors sought more of the debt than was offered in the first public offering for a U.S. photovoltaic power project.

The first Topaz bond offering, for $850 million, was oversubscribed by more than $400 million. Fitch Ratings, which gave the deal its lowest investment-grade rating of BBB-, said the second tranche will probably be enough to cover the balance of the $1.265 billion in debt MidAmerican needs to complete development of the 550-megawatt project.

The demand shows that renewable-energy projects, which provide reliable revenue through long-term contracts to sell power to utilities, are becoming more appealing to investors, said Chris Yonan, a project finance director at Barclays Capital, which led a group of investment banks in underwriting the debt.

"The Topaz bond illustrates the deep and attractive source of financing available in the bond market to fund the construction of renewable-energy projects," Yonan said in an interview today. "There are a lot of takeaways here for wind and other segments of the renewable-energy market. It's our hope that more and more of these deals get done."

MidAmerican, a unit of Berkshire Hathaway Inc., has been expanding its investments in renewable energy as it adds to its portfolio of coal and natural gas. The company created a business unit in January to support investments in wind, geothermal, solar and hydroelectric projects.

Ann Thelen, a spokeswoman for MidAmerican, said the company doesn't discuss the details of its financing strategy. The company said "Topaz expects to issue approximately $430 million of additional senior secured notes" in its annual report this week.


"Demand was definitely oversubscribed, which is why they bumped up the amount to $850 million," said Joseph Salvatore, an energy analyst with Bloomberg New Energy Finance. "They're due to offer another issue soon that will cover the rest of the debt portion." The Topaz bond offering was originally planned for $700 million.

The Topaz bonds were the largest for a renewable-energy project without a U.S. government guarantee and the first to be rated by the three largest ratings companies, according to New Energy Finance.

The Solar notes are rated Baa3 by Moody's Investors Service, its lowest investment grade, according to data compiled by Bloomberg. Standard & Poor's assigned the debt an equivalent BBB-.

Two Solar Purchases

MidAmerican agreed in December to buy the Topaz project from Tempe, Ariz.-based First Solar Inc., which is supplying the solar panels. Later that month the Des Moines, Iowa-based utility holding company agreed to take a 49 percent stake in NRG Energy Inc.'s $1.8 billion Agua Caliente solar project in Arizona.

MidAmerican has become the largest generator of wind energy among regulated U.S. utilities by investing or committing $6 billion to the renewable power source.

"We can make this sort of investment because MidAmerican retains all of its earnings, unlike other utilities that generally pay out most of what they earn," Buffett said in his annual letter to Berkshire shareholders, posted on the company's website Feb. 25. "Many more wind and solar projects will almost certainly follow."

MidAmerican sells electricity to about 2.5 million customers in the U.S. and is the largest supplier in Iowa, Utah and Wyoming, according to the letter. The Berkshire unit also transports about 8 percent of the country's natural gas through its network of pipelines.

Topaz Solar Farms LLC on Feb. 16 issued $850 million of 5.75 percent, unsecured debt due in September 2039 that priced to yield 379.7 basis points, or 3.797 percentage points, more than similar-maturity Treasuries, according to data compiled by Bloomberg.

The rate on the 27.5-year notes is lower than the 5.875 percent coupons that Charlotte, North Carolina-based Bank of America Corp. and New York-based Citigroup Inc. got on 30-year bond offerings this year.

The average yield on Feb. 16 for BBB rated debt maturing in more than 15 years was 5.54 percent and has declined to 5.38 percent as of yesterday, the lowest in data going back to June 1998, according to Bank of America Merrill Lynch index data.

To contact the reporters on this story: Justin Doom in New York at Noah Buhayar in New York at

To contact the editor responsible for this story: Reed Landberg at

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Lunch Talk: (@TED) Creativity, fulfillment and flow.

Mihaly Czikszentmihalyi asks, "What makes a life worth living?" Noting that money cannot make us happy, he looks to those who find pleasure and lasting satisfaction in activities that bring about a state of "flow."


tags: lunchtalk, creativity

Tuesday, February 28, 2012

Lunch Talk: (@Google) A novel about Nikolas Tesla.

The @Google Program was happy to welcome author Samantha Hunt to speak about her book- The Invention of Everything Else

About the Book:

A wondrous imagining of an unlikely friendship between the eccentric inventor Nikola Tesla and a young chambermaid in the Hotel New Yorker where Tesla lives out his last days


tags: lunchtalk, invention

(BN) Android Takes IPhone Battle to Office as SAP Plugs Security Hole

Bloomberg News, sent from my iPhone.

Android Takes IPhone Battle to Office, Narrows Security Gap

Feb. 28 (Bloomberg) -- Google Inc.'s Android, having become the most popular smartphone software among consumers, is set to gain traction with businesses as SAP AG and VMWare Inc. help iron out security kinks.

Software companies attending the Mobile World Congress in Barcelona this week are displaying solutions designed to prevent corporate data from being compromised when employees use their personal phones for work. Samsung Electronics Co., the biggest maker of Android phones, says reducing that risk would give it a chance to overtake Apple Inc. in the enterprise business.

"We recognized that we need a new growth agenda for Samsung, which is going to enterprise," said Bum-coo Cho, who heads Suwon, South Korea-based Samsung's enterprise business team. "Samsung will put a significant amount of effort into generating business from the enterprise sector."

Android, released less than four years ago, has since vaulted past Nokia Oyj's Symbian and Apple's iOS in popularity among consumers of smartphones and tablet computers. Yet many businesses are concerned about the security of its open-source software, leaving a market largely untapped by champions of the platform including Samsung, HTC Corp. and LG Electronics Co.

SAP Partnership

About 50 percent of tablets and 30 percent of all smartphones are already used for business purposes, said SAP Chief Information Officer Oliver Bussmann. In Barcelona, SAP unveiled a partnership with Samsung to make Android devices safer to use as corporate tools.

"I currently don't see anyone on the Android side who's as far advanced," Bussmann said in an interview today. "When I see that the number of security functions they have is already as high as Apple's and growing further, I think they have a real shot at this."

More companies are evaluating their corporate handset strategy that goes beyond Research in Motion Ltd.'s BlackBerry and the iPhone. Siemens AG, Europe's largest engineering company, is considering options for a comprehensive solution on how to integrate not only personal computers, but also devices like smartphones and tablets into the company's IT landscape, said spokesman Wolfram Trost.

Market Share

"Employees are coming to us with their private devices that they know from home and that they like to use, so we're looking how we can make that happen," he said. "It's not always easy because security requirements need to be fulfilled."

Android smartphones accounted for 50.9 percent of all smartphone sales to end users last quarter, up from 30.5 percent a year earlier, according to researcher Gartner Inc. Sales of iPhones also rose, while fewer people bought devices running Symbian or BlackBerry.

Enterprises are facing an increasingly technology-savvy staff and calls to let employees use their own personal device for tasks like sending e-mail, working on business presentations or accessing databases. That trend puts additional pressure on Waterloo, Ontario-based RIM, which has dominated the market for mobile business devices.

Still, a change may take longer. "There is no way the IT manager of a large investment bank is going to allow you to have such a myriad devices" as those running the Android platform,'' said Shannon Cross, an analyst at Cross Research in Livingston, New Jersey. "It seems like a nightmare to manage. That's probably going to be a problem for the foreseeable future."

IT Virtualization

The key to successfully bringing private devices into a corporate environment is separating the business from the private information that's on the phone, said Srinivas Krishnamurti, senior director of mobile solutions at VMWare, which specializes in virtualization of corporate IT.

VMWare is working with LG Electronics and Samsung to produce hardware that enables such differentiation and is in talks with three more Android manufacturers, he said in an interview. The software maker also partnering with operators Telefonica SA in Europe and Verizon Wireless in the U.S. to enable separate billing of private and business calls.

"One of the reasons why enterprises have not deployed Android in the enterprise is that a solution like this doesn't exist," Krishnamurti said in Barcelona. "Now they say, you guys have addressed a lot of the problems that we've had with Android. Now we're actually going to deploy Android in the enterprise and feel safe and secure."

Telefonica, Vodafone

Vodafone Group Plc, the world's largest mobile operator, plans to use the Cebit technology trade show in Hanover next month to demonstrate its device-management suite as well as a SIM-card software that authenticates a phone's user and encrypts data and messages, said Jan Geldmacher, who heads the carrier's German enterprise unit. The encryption works better on Android devices than on iOS because Apple doesn't let developers fine- tune the operating system for maximum security, he said.

"The security is a bit reduced if the manufacturer doesn't let us access the system," he said in an interview. "When I advise a customer and he wants to use an encryption mechanism from our Secure SIM card, and he asks me which phone he'd recommend, I'd say take an Android device."

SAP, the biggest maker of enterprise-management software, is developing solutions to better identify users who log into the corporate network from their private phone, manage permissions and safeguard data on the phones. Besides Samsung, Walldorf, Germany-based SAP also partners Motorola Mobility Holdings Inc. to improve the interaction of SAP's Sybase Afaria device-management software with the device's operating system.

"When we talk to customers, most of the time if not all the time they ask, what is the support for Android devices?" said Raj Nathan, head of SAP mobile applications group. "That's not something they asked two years ago, but they're asking now. That's an indication that it's an important platform for them to consider supporting."

To contact the reporter on this story: Cornelius Rahn in Barcelona at

To contact the editor responsible for this story: Kenneth Wong at

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(BN) Fox, Warner Said to Work With Hard-Drive Makers on Movie Storage

Bloomberg News, sent from my iPhone.

Studios Work With Hard-Drive Makers on Movie Storage

Feb. 28 (Bloomberg) -- Movie studios owned by News Corp. and Time Warner Inc. have enlisted hard-drive makers to create storage devices for films and TV programs, part of their push to spur online purchases.

Twentieth Century Fox Home Entertainment and Warner Bros. Home Entertainment will work with SanDisk Corp. and Western Digital Corp. on methods to store and watch shows on TVs, Blu- ray players, tablets and phones, the companies said today in a statement. The first products are scheduled this year.

The effort, dubbed "Project Phenix," is part of Hollywood's effort to coax consumers to buy digital copies of programs instead of renting them. The storage hardware would complement the studios' cloud-based system, called UltraViolet, by letting users play films on multiple devices when offline.

"The simple message is you're collecting all your content and putting it in one place to be able to access a full high- definition experience," Danny Kaye, Fox's executive vice president of global research and strategy, said in an interview.

The companies formed a joint venture called the Secure Content Storage Association. It was established in August, according to the website of the Austrian Competition Authority.

Studios are trying to counter shrinking DVD sales fueled by low-cost rentals from Netflix Inc. and Coinstar Inc.'s Redbox kiosks. Their focus is on UltraViolet, which lets consumers buy videos from retailers, store them online and on approved devices, and play them on any device.

Offline Viewing

The goal of the latest venture is to let consumers watch movies and other content even when they don't have access to the Internet, Mike Dunn, president of Los Angeles-based Fox Home Entertainment, said in an interview.

The studios and device makers have been discussing at least one product, dubbed "The Egg," that would connect to home networks and store movies and shows. Consumers could use USB memory cards to take content outside the home. That may be just one of many uses, said Bert Hesselink, chief technology officer of branded products at Western Digital, based in Irvine, California.

"I might also download it from a kiosk or from a store where the content might be available, using a USB 3.0-type transfer, which is very fast," Hesselink said in an interview.

Such devices could improve UltraViolet's chances, because they would be classified as physical products, such as Blu-ray discs, that don't require renegotiating digital rights from content creators, Richard Doherty, research director at Envisioneering Group, said in an interview.

Ready to Play

For example, hard drives could be partitioned for participating studios and loaded with entire libraries at stores, Doherty said. The titles would be unlocked as consumers make UltraViolet purchases.

"The business model actually is a good one because a lot of young people don't want to duplicate the huge libraries of their parents, but they do understand physical media," Doherty said.

Previous retail efforts to offer devices that combine digital rights with storage haven't been successful. Milpitas, California-based SanDisk in 2009 collaborated with the music industry for a device called the slotRadio player and a memory card with 1,000 popular songs from Billboard's music charts.

The UltraViolet effort is backed by retailers, entertainment and technology companies through the Digital Entertainment Content Ecosystem, whose members also include Comcast Corp.'s NBC Universal and Viacom Inc.'s Paramount Pictures.

Retailers Best Buy Co., owner of the CinemaNow website, and Wal-Mart Stores Inc. are also part of Ultraviolet, although neither website has begun using the system.

To contact the reporter on this story: Cliff Edwards in San Francisco at

To contact the editor responsible for this story: Anthony Palazzo at

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(BN) Brazil Bullet Train to Be Ready in ‘22, Minister Passos Says

Bloomberg News, sent from my iPhone.

Brazil Bullet Train to Be Ready in '22, Minister Passos Says

Feb. 27 (Bloomberg) -- Brazil's high speed train connecting Sao Paulo and Rio de Janeiro will be ready by 2022, Transportation Minister Paulo Sergio Passos said.

The government will auction rights to build and manage the railway between Brazil's two most populous cities in two stages, Passos said in an interview from his office in Brasilia. The first stage, to be completed by December, will decide on the technology and operator for the train, while the second stage, in which the consortium that will build the infrastructure will be chosen, will happen in 2014, Passos said. Construction will probably take six years, he added.

The biding process for the 511-kilometer (318-mile) high- speed train was cancelled three times in Dec. 2010, April and July last year, because not enough bidders signed up for the auctions. The government is now reviewing the auction rules, Passos said.

"The fact that we didn't have a more detailed study was creating uncertainties to private investors," Passos said in the interview. "These uncertainties translated into risks that were monetized by eventual bidders, putting the value of the investment at much higher level than what the government had estimated."

According to the original project, the planned investment was 33 billion reais ($19.3 billion), and the winning bid would be the lowest fare below the minimum level of 199.80 reais set by the government for the Rio- Sao Paulo trip. The minister didn't provide new values. The concession contract is for 40 years, he said.

A new project for the bidding process will be delivered to President Dilma Rousseff in the next few days, Passos said.

Editors: Fabiola Moura, Adriana Brasileiro

To contact the reporter on this story: Carla Simoes in Brasilia Newsroom at

To contact the editor responsible for this story: Helder Marinho ou

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Google+ ghost town.

Even Google with its deep pockets and broad user base has trouble competing with Facebook, an established player in the social media industry.
Feb 28, 2012. WSJ -- Visitors using personal computers spent an average of about three minutes a month on Google+ between September and January, versus six to seven hours on Facebook each month over the same period, according to comScore, which didn't have data on mobile usage.
Behind the lack of engagement are Google's difficulties in differentiating Google+ from Facebook.

Youtube seems to be a much better social media property for Google than Google+. Unlike Google+ it addresses a new need with a new technology.
If Google enters the enterprise market with Google Apps, then Google+ can become an internal enterprise version of social networking, especially on mobile devices.

tags: mousetrap, social, networking, media, google, facebook, youtube

Monday, February 27, 2012

(BN) Apple Wins Karlsruhe Ruling on German Online Sales of Some iPads, iPhones

Bloomberg News, sent from my iPhone.

Apple Wins Temporary Ruling on German IPad, IPhone Sales

Feb. 27 (Bloomberg) -- Apple Inc. won a German appeals court ruling temporarily blocking the enforcement of a patent verdict obtained by Motorola Mobility Holdings Inc. in December.

Motorola Mobility, which forced Apple to remove some iPad and iPhone models from its German online store for a short period, can't enforce the verdict during an appeal. The ruling was issued after the iPad maker revised license-agreement terms it offered Motorola Mobility, the court said in an e-mailed statement today.

"At the current state of the proceedings, it is to be assumed that Motorola Mobility would violate its duties under antitrust rules if it continues to ask Apple to stop the sales," the court said in a statement.

Motorola Mobility, which is being acquired by Google Inc., and Apple are entangled in numerous patent disputes. Today's case concerned a so-called standard essential patent that companies must license to competitors because they can't produce the devices without the technology. Cupertino, California-based Apple has also filed a complaint with the European Union accusing Motorola Mobility of violating a pledge to license industry-standard patents on fair terms.

Apple spokesman Alan Hely declined to comment. Motorola Mobility's press office didn't immediately reply to an e-mail seeking comment.

Mannheim Court

Motorola Mobility, based in Libertyville, Illinois, would violate its duties if it doesn't accept the new offer and thus can't make use of the verdict during an appeal, the court said. It didn't disclose details of Apple's offer.

Apple made a first request to the appeals court in January over the issue. At that time, the judges said the terms Apple offered weren't adequate, supporting the reasoning of the lower court in Mannheim, Germany, that had issued the December verdict. Apple then revised its offer.

Today's ruling helps Apple's prospects in the appeals case, which hinges on the terms Motorola Mobility must accept to be forced to grant a license. In their December verdict the Mannheim judges rejected Apple's offer, saying it didn't adequately take Motorola Mobility's interest into account.

Today's case is OLG Karlsruhe, 6 U 136/11.

To contact the reporter on this story: Karin Matussek in Berlin at

To contact the editor responsible for this story: Anthony Aarons at .

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(BN) India Road-Building Hits Record as Builders Pay to Work: Freight

Bloomberg News, sent from my iPhone.

India Road-Building Hits Record as Builders Pay to Work: Freight

Feb. 27 (Bloomberg) -- India is awarding highway- construction contracts at a record pace, and saving taxpayers money, as builders stop asking for subsidies and instead offer fees to lay and operate new toll roads.

Competition among builders such as GMR Infrastructure Ltd., Larsen & Toubro Ltd. and IRB Infrastructure Developers Ltd. has helped the National Highways Authority of India win payments, or premiums, for at least 23 of the 35 projects it has offered since April 1, said G. Suresh, its chief general manager for finance. He didn't elaborate. The body will award tenders for 7,300 kilometer-lanes of highways this fiscal year, worth about 570 billion rupees ($12 billion), and 9,000 kilometers next year.

"Many of the projects where we thought we'll have to pay subsidies, we actually got premiums," said B.K. Chaturvedi, who headed a government committee on highway development and a member of the state Planning Commission. "It's a good thing there's competition."

Construction companies have stepped up bids for highways as growing vehicle ownership is spurring traffic and because of a slowdown in other sectors such as building power plants. The work will improve roads ranked worse than Botswana's by the World Economic Forum and ease congestion that contributes to about 440 billion rupees of harvested foods going to waste each year, according to government estimates.

"India's road network is barely adequate to maintain its current growth trajectory," said Shailesh Kanani, an analyst with Angel Broking Ltd. in Mumbai. "Positively, the political will to acknowledge and address this issue is now visible."

$1 Trillion Spending

India's investments in roads could rise to $145 billion in the five years to 2017 from about $69.8 billion in the previous five years, according to a PricewaterhouseCoopers LLP. study. The country plans to spend a total of $1 trillion on roads, railways, airports and other infrastructure in the period.

The national highway system, a predominately two-lane network linking major cities, carries 65 percent of India's freight and 80 percent of passenger traffic. In about six years through October 2011, the highway agency oversaw 5,182 kilometers of construction, including new highways and improvements.

Prime Minister Manmohan Singh in August 2009 set a goal of building 20 kilometers of highways a day. The nation has added 823 kilometers, or about 2 kilometers a day, since then as construction slowed, Tushar A. Chaudhary, junior road transport and highways minister, told lawmakers in parliament Dec. 12.

Tenders Online

Construction is now speeding up, partly because the agency has made it easier for builders to compete for projects by accepting tenders online and by creating a list of prequalified bidders. Winning bidders get to collect tolls for as long as 30 years before transferring the highways to the state, Suresh said. Toll fees are decided by the National Highways Authority.

The highways have become more lucrative for builders and the government as the rising number of cars and trucks boosts traffic and tolls. India's car sales in the year ended in March jumped 30 percent, the biggest gain in at least nine years, according to Society of Indian Automobile Manufacturers. Sales may triple to more than six million by 2018, Rothschild forecast in a December report.

"Traffic risk is something to be taken on by the developer," said Virendra Mhaiskar, chairman of IRB Infrastructure, which has constructed roads including the Mumbai-Pune highway. If the builder is confident of generating enough tolls to cover costs and make a profit, it can offer the extra anticipated funds to the government as premiums to secure the contract, he said.

Overestimating Traffic

Builders run the risk of overestimating future traffic and tolls, which could cause them to pledge unprofitable levels of fees, said Parvesh Minocha, managing director, transport division at Feedback Infrastructure Services Pvt., which advises clients on construction projects.

"The premium bids are increasingly becoming a cause for worry," he said. "The worry will start manifesting a couple of years down the line when you have to give the NHAI what you promised and also put in money to build the roads."

L&T, the nation's biggest engineering company, decides to make premium bids for projects based on factors including traffic expectations, competition from other roads, the type of traffic the highway will attract and the ease of construction, said S.N. Subrahmanyan, director and senior executive vice president of its construction division. He didn't say how much premiums the company has so far paid.

The builder fell 3.5 percent to 1,301.9 rupees at close of Mumbai trading. It's fallen 14 percent in the past year. IRB Infrastructure declined 2.9 percent and GMR Infrastructure dropped 5.3 percent today.

Reliance, Adani

Builders may also be chasing road projects to help replenish orderbooks amid a slowdown in power-plant orders, said Manish Agarwal, an executive director at the Indian unit of PwC. Reliance Power Ltd., Adani Power Ltd. and other electricity generators have delayed building $36 billion of power stations because of concerns about coal supply.

L&T, based in Mumbai, has orders to build 100 billion rupees of roads, Subrahmanyan said. The builder boosted the number of road projects to 7,171 lane-kilometers in the first nine months of this fiscal year from 5,701 lane-kilometers a year ago, according to company presentations on its website. The number of power projects remained unchanged at 5 during this period.

Power Plants

That means power plants now account for 29 percent of L&T's orderbook, compared with 37 percent a year ago. Roads and other building projects' share has jumped to 40 percent from 32 percent.

"For investors, a company's valuation seems to be driven by its orderbook," said Agarwal. "If a company wins a bid, they see it as fantastic."

Welspun Infratech Ltd., a unit of JPMorgan Chase & Co.- backed Welspun Corp., has won road projects worth 10 billion rupees since 1999, including a 185-kilometer stretch in the central Indian state of Madhya Pradesh, without offering premiums, said Assistant Vice President Rajeev Kumar. Still, the company is willing to offer fees.

"We aren't averse to offering a premium to win a deal," he said. "If the deal is good, why not?"

To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at

To contact the editor responsible for this story: Neil Denslow at

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(BN) Nokia Offers Cheaper Windows Phone to Nip Android Expansion (2)

Bloomberg News, sent from my iPhone.

Nokia Offers Cheaper Windows Phone to Nip Android Expansion

Feb. 27 (Bloomberg) -- Nokia Oyj, the world's third-largest smartphone maker by shipments, will sell a Windows Phone priced at 189 euros ($254) in the second quarter to capture first-time users against similar devices powered by Google Inc.'s Android.

The Lumia 610 will be 30 percent less expensive than Nokia's current cheapest smartphone running Microsoft's Corp.'s Windows platform. The device will be targeted at young people to hook them to the company's new platform. Nokia also announced a high-resolution camera phone as it returned to the Mobile World Congress in Barcelona, Europe's biggest wireless show, with its first product introduction in three years.

Nokia Chief Executive Officer Stephen Elop won good reviews for the first two Lumia phones using the Microsoft platform, which sold "well over 1 million" units, he said Jan. 26. Nokia's shares have fallen about 10 percent since it unveiled those handsets Oct. 26 as consumers continued to bypass Windows Phones in favor of Android handsets costing as little as $100 and Apple Inc.'s iPhone, which broadened its range with discounted older devices.

"Nokia has come back with a vengeance," Elop said in an interview with Bloomberg Television today. "We're absolutely mobbed today because of the range of product and services" the company is showing at the Mobile World Congress.

Bigger Ecosystem

Microsoft has adapted Windows Phone software so that it requires half as much memory and runs the cheaper 7X27A chip from Qualcomm Inc. That should help manufacturers cut their costs.

"The new Nokia Lumia 610 is the perfect introduction of Windows to a younger audience," said Jo Harlow, Nokia's smartphones chief. "We are now able to cover a range of needs and a range of price points."

The price of the Lumia 610 "makes it very competitive with the low-end Android devices," said Carolina Milanesi, a research vice president at Gartner Inc. The handset will be attractive to operators as it will require very little subsidy, she said. "You build momentum, you build volume and then you build interest in the ecosystem."

The Lumia will run on the updated version of Microsoft's software, Windows Phone 7.5, known as Mango, which will be based on cheaper hardware, according to the announcement.

"Nokia is starting to deliver on Elop's promise to bring down the price points and enlarge the Windows Phone ecosystem," said Martin Garner, a London-based analyst at CCS Insight. "It's still too early to proclaim success, the volumes are not there, but he is executing and doing it at the right sort of speed."

Emerging Markets

The manufacturer also said that its high-end Lumia 900 device, which will first go on sale in the U.S. with operator AT&T Inc., won't be made available on any other fourth- generation network except in Canada. The handset, which will be sold in the second quarter and costs 480 euros, will run on a form of third-generation technology called HSPA+.

Nokia, based in Espoo, Finland, also introduced three phones for its Asha line, sold primarily in emerging markets. The company got about 46 percent of its sales last year from these handsets and other low-end phones, which lag behind smartphones in processing speed and applications such as video calling and corporate e-mail. The company's new camera-phone, the 808 Pure View, will have a 41 megapixel sensor, alongside optics jointly developed with Carl Zeiss AG.

Smartphone Growth

"We are demonstrating the actions necessary to improve the fortunes of Nokia, very deliberately recognizing challenges, changing strategy and then executing very aggressively against that," Elop said. "That's the path you'll see us continue to execute day in and day out."

Smartphone sales may grow 39 percent this year from 472 million units, according to researcher Gartner. Android and the iPhone together accounted for almost three quarters of smartphone sales last quarter, while Nokia's share was 12 percent, Gartner said. A billion people may use smartphones by 2016, Forrester Research said in a report this month.

Microsoft Corp. said it plans to bring its Windows Phone software to 23 new countries and put the operating system on less expensive smartphones. Microsoft will kick off the expansion by opening mobile-application stores in China, Thailand, Venezuela and the 20 other nations by the end of the month, with phones arriving around the same time. That will bring the total number of markets Microsoft serves to 63, letting it target 60 percent more buyers.

Value Drop

Nokia has lost more than 60 billion euros in market value since Apple introduced the iPhone in 2007, including a 14 percent drop on Feb. 14, 2011, the day Elop announced that Nokia would embrace Windows Phone and taper off its 10-year-old Symbian product line.

"Investor confidence will be built as we execute our strategy," Elop said.

Nokia will need the U.S. market for brand credibility and emerging markets for volume. It's preparing to sell the Lumia 900 handset with AT&T while the Lumia 710 is in shops including Wal-Mart Stores Inc. Nokia will offer Lumias in China and Latin America by July, Elop said Jan. 26. Last year its handset revenues fell in all regions except the Middle East and Africa and Latin America. The Lumia 710 costs 270 euros.

The company introduced the Communicator, one of the first handsets to surf the Internet, in 1996. Its N8 Symbian smartphone, introduced in 2010, had a 12-megapixel camera.

To contact the reporters on this story: Jonathan Browning in Barcelona via Cornelius Rahn in Barcelona via

To contact the editor responsible for this story: Kenneth Wong at

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Sunday, February 26, 2012

Lunch Talk: (@TED) 3D printing

Lisa Harouni is the co-founder and CEO of Digital Forming, a company that works on the software side of 3D printing -- the design tools needed to run the new generaion of 3D printing processes. She has a background in economics, and worked in the G7 Economics team at Deutsche Bank AG before moving over to the consumer products business.

tags: lunchtalk, business, model, technology

Friday, February 24, 2012

(BN) Broadcom Says SEC Is Probing the Way It Accounts for Litigation Reserves

Bloomberg News, sent from my iPhone.

Broadcom Says SEC Is Investigating Its Accounting Practices

Feb. 24 (Bloomberg) -- Broadcom Corp., a maker of chips that help mobile devices connect to the Internet, said it's under investigation by the U.S. Securities and Exchange Commission for its accounting practices.

The company received a request for documents from the Los Angeles regional office of the SEC concerning its accounting for litigation-related reserves, Broadcom said today in a regulatory filing. The investigation was probably prompted by allegations from a former employee, Broadcom said.

"In response to these allegations, the company, with oversight from the audit committee of the board of directors, completed an internal review of these allegations with the assistance of independent outside counsel and did not identify any improprieties," Broadcom said in the filing.

The company saw no need to revise its financial statements following its investigation and will cooperate with the SEC's investigation, it said.

Litigation reserves were taken in the first quarter of 2011 related to intellectual-property claims, Broadcom said.

Broadcom, based in Irvine, California, fell as much as 4.2 percent in extended trading after the announcement. The shares, up 25 percent this year, had closed at $36.75 earlier today.

Karen Kahn, a Broadcom spokeswoman, declined to comment beyond the contents of the statement. John Nester, a spokesman for the SEC in Washington, didn't immediately respond to a message seeking comment.

To contact the reporter on this story: Ian King in San Francisco at

To contact the editor responsible for this story: Tom Giles at

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(BN) Tesla Says Blogger Sparked ‘Irrational’ Fear With Battery Claim

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Tesla Says Blogger's Battery Post Sparked 'Irrational' Fear

Feb. 24 (Bloomberg) -- Tesla Motors Inc., the maker of electric cars run by entrepreneur Elon Musk, said a blog post asserting Roadster batteries are at risk of failing if owners don't keep the cars plugged in stoked an "irrational" fear.

"A single blogger is spreading a rumor about electric vehicles becoming inoperable," a condition referred to as "bricking," the Palo Alto, California-based company said today on its website. "'Bricking' is an irrational fear based on limited information and a misunderstanding of Tesla's battery system."

Tesla was responding to a Feb. 21 post on a blog called the Understatement, which said if the battery in the Roadster electric car "is ever totally discharged, the owner is left with what Tesla describes as a 'brick': a completely immobile vehicle that cannot be started or even pushed down the street." At that point, a $40,000 battery pack replacement may be required, according to the Understatement, which cited no one.

Scrutiny of Tesla's technology comes as the carmaker prepares to sell its first wholly U.S.-built vehicle, the electric Model S sedan, starting in July. The company, named for inventor Nikola Tesla, this month also showed a prototype of the Model X, an electric crossover vehicle that arrives in 2013.

Tesla fell 2.3 percent to $33.75 at the close in New York. The shares gained 18 percent this year.

Instructions to Owners

"You'd really have to not use the vehicle for an extended period for this to be an issue." said David Friedman, a senior engineer for the Union of Concerned Scientists, an environmental advocacy group. In such cases, "it raises the question: Why did you buy an electric vehicle if you aren't going to use it?" he said.

Tesla owners should keep Roadsters plugged in, both to recharge the pack for driving range and to keep "key systems within the car functioning properly," the company said today. The vehicle warns owners when the car's state of charge is falling too low.

Software in newer Roadster models is designed to contact the company, which in turn alerts owners who discharge the batteries too deeply, Tesla said. The oldest Roadsters, on the road since 2008, take more than two months to fully discharge if not plugged in, the company said.

Nissan, Toyota

"A Model S battery parked with 50 percent charge would approach full discharge only after about 12 months," the company said today.

Nissan Motor Co., seller of all-electric Leaf hatchbacks, said in a statement the lithium-ion battery pack it uses "will never discharge completely, thanks to an advanced battery management system designed to protect the battery from damage."

The Leaf's warranty booklet cautions owners against "leaving your vehicle for over 14 days where the lithium-ion battery reaches a zero or near zero state of charge," Katherine Zachary, a company spokeswoman, said in an e-mailed statement.

Toyota Motor Corp., which this year is to sell electric RAV4 crossovers using Tesla-supplied batteries and motors, said that model will "feature multiple safeguards to avoid full battery depletion," said Jana Hartline, a company spokeswoman.

Both Hartline and John Hanson, a Toyota spokesman, declined to elaborate on those steps. Toyota is an investor in Tesla.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at

To contact the editor responsible for this story: Jamie Butters at

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Einstein, the African grey parrot, squawked to fame after a winning performance on the Animal Planet game show Pet Star. She has a vocabulary of more than 200 words and sounds; she can perform nearly half on a cue from her trainer, Stephanie White. She can also impersonate a spaceship, a monkey and even a skunk.

(BN) India’s Water Desalination Business to Triple to $1.2 Billion

Bloomberg News, sent from my iPhone.

India's Water Desalination Business to Triple to $1.2 Billion

Feb. 24 (Bloomberg) -- India's water desalination business is set to triple to $1.2 billion by 2017 as rising demand from industry spurs the South Asian country to build more purification plants, according to a research report.

The number of units that process sea water in India will reach 500 in five years from 180 now, with more than 300 plants being built in the states of Tamil Nadu, Gujarat and Maharashtra, TechSci Research said in its report. Saudi Arabia leads the global desalination market worth $14.3 billion, according to Karan Chechi, TechSci's research director.

"Improved hybrid technologies and reverse osmosis have cut production costs and initial investment in water desalination industry compared with traditional methods," Chechi said in a telephone interview from Noida, near New Delhi. "This is attracting investors."

Indiscriminate sinking of wells by farmers is depleting ground water resources in the world's second-most populous nation, prompting the government to spend about $1 billion for mapping aquifers. Desalination plants may help supply water for power producers, drug makers and others, said Chechi.

More than 85 percent of India's villages and half of its cities rely on wells for water in the country where farming accounts for 90 percent of total water withdrawals. India allocated 536.6 billion rupees ($11 billion) for urban supply projects in the five years ending March 2012.

The market for desalination in India, which has a coastline of 7,517 kilometers (4,671 miles), may be worth $630 million by 2014, according to TechSci. Power plants and pharmaceutical companies use 72 percent of the current capacity, with the remainder taken up by municipal corporations, TechSci said.

To contact the reporter on this story: Archana Chaudhary in New Delhi at

To contact the editor responsible for this story: Sam Nagarajan at

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(BN) China Encourages Solar-Product Makers to Expand Amid Supply Glut

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China Encourages Solar-Product Makers to Expand Amid Supply Glut

Feb. 24 (Bloomberg) -- China set targets for increasing production capacity at "key" polysilicon and solar cell makers to boost domestic installations and spur expansion even as prices tumble amid a global supply glut.

China wants each "leading" company to have 50,000 tons a year of polysilicon capacity by 2015 and targets 5 gigawatts for each leading solar-cell maker, according to a five-year plan for the industry posted on the Ministry of Industry and Information Technology website today.

The move will make the manufacturers stronger and more competitive to help meet demand as China pursues a target of 15 gigawatts of solar farms by 2015, Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance, said by phone today. "If the scale isn't up, there's never enough financing for the integrated use of byproducts."

The plan doesn't say how many companies will be involved and whether the targets mean an overall capacity increase. It's "difficult" to estimate future growth, Gao said.

The government's push for expansion comes as prices of solar cells more than halved last year due to global excess capacity. The average spot price for polysilicon has tumbled 59 percent from a year earlier to $29.28 a kilogram, according to Bloomberg New Energy Finance.

"China imported half its polysilicon from overseas companies; this means there's still room for domestic producers," Gao said. "The key is whether they have capability to grab a share in the market and to lower costs." Gao's organization is a conduit between solar companies and the government.

Idled Factories

GCL-Poly Energy Holdings Ltd., China's largest polysilicon maker, was 4,000 tons short of the new target last year, with 46,000 tons of capacity. Suntech Power Holdings Co., the world's biggest solar-panel maker, had annual solar-cell capacity of 2.4 gigawatts as of the end of the third quarter.

The nation has idled about 30 percent of polysilicon production and won't resume until prices recover, according to Xie Chen, an analyst from the China Nonferrous Metals Industrial Association, a trade group that advises the government.

"Chinese firms shut down not only because prices declined, but also they can't drag costs lower than the spot price," she said.

China installed about 2.7 gigawatts of solar farms last year, Gao said. "As planned by the country, the installation will have a steady growth year on year, which will create demand for solar-power products."

Panel makers Suntech and Trina Solar Ltd. expect about 4 gigawatts of solar panels to be erected in the country this year to absorb some of the industry's excess inventory.

To contact Bloomberg News staff for this story: Bloomberg News Byline in Beijing at

To contact the editor responsible for this story: Reed Landberg at

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Faking it, the government style.

The new "Consumer Privacy Bill of Rights" appears to be a successful attempt to lull consumers into believing that they can get privacy on the Web.
Feb 23, 2012. CNET -- Do Not Track technology .... applies to targeted ads only and not to any other forms of tracking.

Abine conducted a quick online survey of 500 Internet users starting on Wednesday and found that 80 percent of respondents believed that Do Not Track stops data collection or removed tracking technologies from their computers.
It shows that with a clever name you can get 80% of people believe what they would like to believe.

tags: internet, web, privacy, control, detection

Thursday, February 23, 2012

(BN) Vivus Surges After Winning Support for First Weight-Loss Pill in 13 Years

Bloomberg News, sent from my iPhone.

Vivus Obesity Pill Wins FDA Panel Nod; NeuroSearch Surges

Feb. 23 (Bloomberg) -- Vivus Inc. gained the most in 12 years after the company's pill Qnexa won the backing of a regulatory panel, moving the drug a step closer to gaining U.S. approval as the first new obesity treatment in 13 years.

Vivus jumped 78 percent to $18.73 at the close of New York trading, its biggest single-day increase since December 1999. Competitor Orexigen Therapeutics Inc. also rose after the Food and Drug Administration advisers voted 20-2 yesterday that Qnexa's benefits outweigh its risks.

While the FDA isn't required to follow the panel's recommendation, it often does. Several panel members said Qnexa would be prescribed for millions "if not tens of millions" of people, wrote Christopher James, a New York-based analyst for MLV & Co., in a note to investors today.

Qnexa "has the highest efficacy in terms of weight loss," compared with other obesity drugs, said Sanjay Kaul, a professor in the David Geffen School of Medicine at UCLA Cedar Sinai Medical Center and a panel member, during yesterday's meeting. "That shifts the balance in terms of requiring a post-approval study rather than a pre-approval study."

Patients that took Qnexa in studies lost 10 percent of their body weight on average, Vivus said on its website.

Once approved, Qnexa carries the potential to become "the next Lipitor," MLV's James wrote. Lipitor, made by New York- based Pfizer Inc., is a cholesterol pill that had $10.7 billion in sales in 2010 before losing patent protection last year.

One of Three

Qnexa is one of three medications vying for the first U.S. approval of a prescription weight-loss treatment since Swiss drugmaker Roche Holding AG's Xenical in 1999.

The FDA plans to have advisers discuss in March the possibility of requiring heart-risk studies for all weight-loss drugs. Panel members yesterday discussed whether Vivus should conduct such a study before or after approval. The FDA is due to decide on Qnexa, which it rejected in 2010, by April 17.

Orexigen, which is developing Contrave for obesity, rose 14 percent to $3.66 and Arena Pharmaceuticals Inc., testing lorcaserin for the same ailment, fell 1.7 percent to $1.78. NeuroSearch A/S and Novo Nordisk A/S, Danish companies developing obesity drugs, also gained.

Trading in Vivus stock was halted yesterday before the FDA panel vote. NeuroSearch, which is developing tesofensine for obesity, climbed 5.6 percent to 17 kroner and Novo Nordisk, which is studying its Victoza diabetes drug as a weight-loss treatment, climbed 1.5 percent to 796.50 kroner in Copenhagen.

Attractive Target

Vivus may be a more attractive target for a partnership and acquisition, wrote Steve Yoo, an analyst for Leerink Swann in New York, in a note to investors. Vivus has been looking to sell the rights to its erectile dysfunction drug Avanafil, and "it would not be too much of a stretch to convert those discussions into a more wide-ranging discussion," he wrote.

Regulators raised concerns that Qnexa may contribute to a greater risk of heart ailments and birth defects. The medicine combines the appetite suppressant phentermine with topiramate, an antiseizure and migraine drug. The Mountain View, California- based company has proposed a post-approval trial to assess Qnexa in reducing major heart complications in obese, at-risk patients. The trial would involve 11,300 patients and take four and a-half years.

Analysts say the drug, if approved, may generate $448 million in sales in 2015.


Topiramate is the active ingredient in Johnson & Johnson's Topamax. The anticonvulsant is also associated with confusion, difficulty with concentration and memory loss.

Vivus's analysis of heart risks for Qnexa was "somewhat reassuring," though the significance of an observed increase in heart rate was "uncertain," FDA staff said Feb. 17 in a report.

More than one-third of U.S. adults are obese, and another third are overweight, according to the Centers for Disease Control and Prevention. The obesity rate among adults has more than doubled since 1980 to 72 million people.

Obesity raises the risks of diabetes, heart attacks and stroke, and costs the U.S. economy an estimated $147 billion a year in medical expenses and lost productivity, according to the Atlanta-based CDC.

Orexigen, based in La Jolla, California, and San Diego- based Arena also are seeking approval for their obesity medicines, which the FDA refused to approve without more data on safety risks.

Claims Data

Vivus examined medical claims data and found five oral clefts in a group of 1,740 children whose mothers had taken topiramate alone in the first trimester of pregnancy, for a prevalence rate of 0.29 percent, the company said Dec. 21 in a statement. That compared with a rate of 0.16 percent in the group whose mothers had taken antiseizure drugs, including topiramate, before pregnancy.

Vivus plans to finish the results in the third quarter of this year, after the April 17 deadline for the FDA to decide whether to approve the drug. The risk of oral clefts hasn't been fully answered by the interim data, FDA staff said.

The FDA asked Vivus in January to remove wording from Qnexa's proposed prescribing label advising women with the potential to become pregnant against taking it. The FDA staff said in the Feb. 17 report severely restricting Qnexa isn't practical because topiramate also treats other serious conditions.

Restrictions Considered

Panel members, meeting yesterday at FDA headquarters in Silver Spring, Maryland, suggested the agency should consider restricting topiramate used for seizures and migraines for women of childbearing age.

"I just can't get my mind around why it would be different," said Lamont Weide, chief of diabetes and endocrinology at the Truman Medical Centers Diabetes Center in Kansas City and a member of the panel.

Russell Katz, director of FDA's neurology products division, said the agency hasn't considered restricting the drug because there aren't many options for migraine prevention.

Vivus has suggested restricting distribution of Qnexa to less than 10 large mail-order pharmacies with pharmacists trained in dispensing the drug, Barbara Troupin, senior director of global medical affairs at the company, said.

In addition to Roche's Xenical, London-based GlaxoSmithKline Plc's Alli, a half-dose version of Xenical's active ingredient, won FDA clearance in 2007 as the first diet drug available without a prescription.

To contact the reporter on this story: Anna Edney in Washington at

To contact the editors responsible for this story: Adriel Bettelheim at Reg Gale at

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(BN) Global Warming Made First Tiny Horses Even Smaller, Study Finds

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Global Warming Made First Tiny Horses Even Smaller, Study Finds

Feb. 23 (Bloomberg) -- Global warming 50 million years ago caused the first horses, already tiny in stature compared with present-day animals, to shrink 30 percent to about 8.5 pounds, the size of a house cat today, a study suggests.

Later, as the climate cooled, the horse called Sifrhippus began to grow in size, according to research in the journal Science. Scientists the University of Michigan's Museum of Paleontology used fossilized teeth to make the size estimates.

The finding, which correlates to a 10 to 20-degree change in global temperature, follows Bergmann's rule, which says that smaller animals within the same species are usually found in hotter climes. The study also may suggest that creatures alive today may shrink if global warming continues, said Philip Gingerich, a study author and the museum's director.

"I joke about this all the time -- we're going to be walking around 3 feet tall if we keep going the way we're going," Gingerich said in a statement.

From 1906 to 2005, the world was an "unequivocal" warming trend, according to the Environmental Protection Agency's website. The earth warmed about 1 to 1.7 degrees Fahrenheit over that time, much less than the warming trend 56 million years ago.

To contact the reporter on this story: Elizabeth Lopatto in New York at .

To contact the editor responsible for this story: Reg Gale at .

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(BN) Copper Traders Most Bullish in Two Months as Hedge Funds Buy: Commodities

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Copper Traders Most Bullish in Two Months: Commodities

Feb. 24 (Bloomberg) -- Copper traders are the most bullish in two months on speculation that demand will strengthen from the U.S. to China at a time when stockpiles monitored by the world's biggest metals exchange are at a 2 1/2 year low.

Fourteen of 29 analysts surveyed by Bloomberg expect the metal to gain next week and 10 were neutral, the highest proportion since Dec. 23. Inventories tracked by the London Metal Exchange are set for a fifth consecutive monthly drop and money managers have their biggest bet on rising prices since early August, Commodity Futures Trading Commission data show.

Global equities and commodities climbed to at least six- month highs this week after euro-area finance ministers approved 130 billion euros ($173 billion) in aid for Greece to avert an economic collapse. China said Feb. 18 that it will cut banks' reserve requirements to boost growth and U.S. indicators pointed last week to sustained economic expansion as Barclays Capital anticipates a third consecutive copper shortage this year.

"Copper is benefiting from very positive sentiment and from high levels of liquidity," said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. "It's being driven by restrained supply and robust demand."

The metal rose 10 percent to $8,379 a metric ton this year on the LME, the best start since 2008. The Standard & Poor's GSCI gauge of 24 commodities climbed 9 percent and MSCI All- Country World Index of equities gained 10 percent. Treasuries lost 0.4 percent, a Bank of America Corp. index shows.

China Measures

The People's Bank of China said that the proportion of cash that lenders must set aside will fall half a percentage point from today, with Standard Chartered Plc and HSBC Holdings Plc predicting more reductions this year. The 0.4 percent increase in the Conference Board's gauge of the U.S. outlook for the next three to six months on Feb. 17 followed a 0.5 percent increase in December, the strongest back-to-back gain in almost a year.

China consumes about 40 percent of the world's copper and North America accounts for about 11 percent of demand. Refined production of the metal lagged usage by 119,000 tons in November, the most since March 2010, the International Copper Study Group said yesterday. Barclays estimates a shortage of 376,000 tons this year, and another shortfall in 2013.

The International Monetary Fund forecasts growth of 8.2 percent in China this year will drive a global expansion of 3.3 percent. Inventories of copper monitored by the LME slid 36 percent since October to 304,875 tons, the lowest level since September 2009, exchange data show.

Shanghai Stockpiles

While combined stockpiles tracked by bourses in London, New York and Shanghai slid 7.4 percent since October, Shanghai copper inventories more than doubled this year, the data show. China's manufacturing may shrink for a fourth month in February, a Feb. 22 preliminary reading from HSBC and Markit Economics showed, as exports are capped and the housing market cools.

Refined copper imports by the nation fell 18 percent in January from a record in December, the first decline in eight months, according to Bloomberg calculations based on Feb. 21 data from the General Administration of Customs. Imports may decrease this year, Jacob Shen, a trader at INTL FCStone Inc., said in an interview in Singapore yesterday.

Europe remains a risk to commodities used in construction and industry, even after ministers approved a second bailout and persuaded investors to provide more debt relief to Greece. Europe's economy will shrink 0.3 percent this year, the European Commission said yesterday, abandoning a November forecast of 0.5 percent growth.

'Temporary Solution'

Copper benefited "from the temporary resolution of Greece's financial woes," said Mark Lewon, the president of Utah Metal Works Inc., a Salt Lake City-based company recycling industrial scrap. "I fully expect Greece to continue to have problems as government revenues fail to reach the levels expected due to the contraction in the economy."

Goldman Sachs Group Inc. expects the metal to fall to $8,000 in three months before rebounding to $9,000 in a year, 7.4 percent above today's price. The bank on Feb. 22 cut its prediction for commodity returns to 12 percent from 15 percent after prices rallied this year.

Hedge funds and other money managers are getting more bullish. Speculators raised their net-long position in copper by 20 percent to 14,817 futures and options in the week ended Feb. 14, the highest level since Aug. 2, CFTC data show. Wagers on higher prices more than tripled since mid-January.

Gold Survey

Seventeen of 23 traders and analysts surveyed by Bloomberg expect gold to gain next week. Futures on the Comex in New York rose 14 percent to $1,786.80 an ounce this year after a 10 percent increase in 2011. Holdings in gold-backed exchange- traded products stand at 2,390.5 tons, about 0.1 percent below the record set in December, data compiled by Bloomberg show.

Eight of 11 people surveyed expect raw-sugar prices to increase next week. The commodity gained 5.5 percent this year to 24.59 cents a pound on ICE Futures U.S. in New York.

Ten of 21 people surveyed anticipate higher corn prices next week, while 15 of 22 said soybeans will climb. Corn fell 1.2 percent to $6.39 a bushel this year as soybeans gained 6.3 percent to $12.8375 a bushel.

"We had a huge rally already in many commodities," said Jesper Dannesboe, an analyst at Societe Generale SA in London. "In the near term I think a correction could come, or at least a consolidation, and then you should maybe try to buy on those dips. We're moderately bullish."

 Gold survey results: Bullish: 17 Bearish: 5 Hold: 1 Copper survey results: Bullish: 14 Bearish: 5 Hold: 10 Corn survey results: Bullish: 10 Bearish: 3 Hold: 8 Soybean survey results: Bullish: 15 Bearish: 5 Hold: 2 Raw sugar survey results: Bullish: 8 Bearish: 3 Hold: 0 White sugar survey results: Bullish: 7 Bearish: 1 Hold: 3 White sugar premium results: Widen: 6 Narrow: 3 Neutral: 2 

To contact the reporter on this story: Nicholas Larkin in London at

To contact the editor responsible for this story: Claudia Carpenter at .

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(BN) Google Agrees to Allow ‘Do-Not-Track’ Button in Browser (1)

Bloomberg News, sent from my iPhone.

Google Agrees to Allow 'Do-Not-Track' Button in Browser

Feb. 23 (Bloomberg) -- Google Inc. will allow a "do-not- track" button to be embedded in its Web browser, letting users restrict the amount of data that can be collected about them.

The world's most popular search engine will join with other Web companies to support the anti-tracking initiative, which prevents an individual's browsing history from being used to tailor ads, according to an e-mailed statement today.

"We're pleased to join a broad industry agreement to respect the 'do-not-track' header in a consistent and meaningful way that offers users choice and clearly explained browser controls," Google Senior Vice President of Advertising Susan Wojcicki said in the statement.

Google, based in Mountain View, California, joined the initiative as the Obama administration unveiled plans to give consumers more control over their personal information online. Congress should enact a privacy bill of rights for Web users, the administration said in a report released today.

Revelations about potential privacy vulnerabilities during the past year have spurred calls from regulators and lawmakers in Washington for stronger protections of personal data online and on Internet-connected mobile devices.

Google announced plans on Jan. 24 to unify privacy policies for products including YouTube videos and Android software for mobile phones, saying it will simplify conditions that users agree to.

Consumer Data

Google and Facebook, the world's largest social network, are among Web companies facing scrutiny over their handling of consumer data used to power an online ad market projected to reach $39.5 billion in the U.S. this year, according to eMarketer Inc., a New York-based research firm.

The White House report sets broad principles for the use of personal information that include giving consumers control over what data is collected on them and how it is used; providing understandable privacy policies; and handling consumer data securely. The Commerce Department will meet with companies and privacy advocates to develop voluntary standards for businesses based on the principles.

To contact the reporter on this story: Jonathan Browning in London at

To contact the editor responsible for this story: Kenneth Wong at

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