Other items: 26 laid off in shift of treatment focus; Experimental drug fails to aid lungs; Brazilian carrier to buy more 737s ...
Pax World Funds, a mutual-fund family that invests in socially responsible companies, sold $23.4 million worth of Starbucks shares after the Seattle-based coffee-shop chain said it will sell a coffee liqueur with Jim Beam whiskey.
The funds sold 375,000 shares, Portsmouth, N.H.-based Pax World said in a statement. The fund family steers clear of companies involved in defense or weapons, tobacco, liquor or gambling.
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In a written response to the fund company’s announcement, Starbucks said it was disappointed but understood Pax World Funds’ strict policy on not investing in companies that make money from the manufacture of liquor. “Starbucks is committed to responsible marketing, and proud of our history of corporate responsibility,” the statement said.
Starbucks and Fortune Brands’ Jim Beam whiskey introduced Starbucks Coffee Liqueur nationally last month. The liqueur is sold in restaurants, bars and liquor stores.
26 laid off in shift of treatment focus
Xcyte Therapies, a Seattle biotech company, has laid off 26 workers and decided to stop developing treatments for two forms of cancer.
The company, which has 81 employees, said it will concentrate its efforts on stimulating the immune system against chronic lymphocytic leukemia and HIV. It said it will finish up trials in multiple myeloma and non-Hodgkin’s lymphoma, but it does not plan to run additional trials in those diseases.
Xcyte said it needs to concentrate its resources on its best opportunities. It had $27 million in cash and investments at the end of September and raised an additional $30 million in November.
Experimental drug fails to aid lungs
Icos, the developer of the Cialis erectile dysfunction drug, said yesterday that its experimental drug for chronic obstructive pulmonary disease failed to improve lung function in a study.
The Bothell biotech company said in a statement that it would stop developing the IC485 drug for the respiratory disease.
The announcement about IC485, the company’s most advanced experimental drug, was made after the stock market closed.
Brazilian carrier to buy more 737s
GOL Linhas Aereas Inteligentes is exercising options to buy four more Boeing 737-800 passenger jets worth up to $278 million at list prices, the low-cost Brazilian carrier and the aircraft manufacturer announced yesterday.
Under the contract with Boeing Commercial Airplanes, the carrier increased its number of firm orders to a total of 30 737-800s — six for delivery next year, 13 in 2007, seven in 2008 and four in 2009.
The 737-800 carries list prices of $61.5 million to $69.5 million, but discounts are common, especially in multiple orders.
GOL operates 29 Boeing 737s with a single class of service on flights within Brazil and Argentina.
Compiled from Bloomberg News,
The Associated Press and
Seattle Times business staff
Delta Air Lines
CEO worried about rising fuel costs
Delta Air Lines must further reduce costs and generate additional cash to counter the rising price of fuel, Chief Executive Officer Gerald Grinstein said.
“Our basic plan is that in ’05 and ’06 we were going to be constantly bumping up against liquidity issues, but we should be able handle them,” Grinstein said at a Goldman Sachs investor conference in New York. “One wild card, obviously, is fuel price.”
U.S. carriers have boosted fares three times in the past month in reaction to a 32 percent jump this year in the price of jet fuel, the second-biggest expense for the industry behind labor. Since the fare increases will cover only about 25 percent of Delta’s $1 billion in added fuel costs this year, the company is seeking additional cost cuts, Grinstein said.
Northwest Airlines Chief Financial Officer Bernie Han said at the same investor conference Tuesday that his airline will need to cut more than the $950 million in annual costs because of fuel costs. Northwest is in talks with its unions on pay and benefit concessions and is trying to lower costs by yearend.
Delta is working with Northwest to urge Congress to pass legislation that would allow U.S. carriers to spread pension contributions over a longer period, perhaps as much as 25 years, Grinstein said. He expects a bill to be introduced in a matter of weeks, he said.
Settlement reached on software leak
Apple Computer reached a settlement yesterday with a North Carolina man who leaked a copy of an unreleased operating system onto the Internet.
In December, the computer maker sued Doug Steigerwald, 22, for copyright infringement and trade-secret misappropriation. Apple said the North Carolina State University computer-engineering graduate released a copy of “Mac OS X Tiger” on a file-swapping Web site, where people downloaded thousands of unauthorized copies.
Neither Apple nor Steigerwald would discuss terms of the settlement.
Apple is still suing two other people involved in the Tiger leak.
Strategy outlined to fix ailing business
Shifting resources to key high-volume vehicles and educating potential buyers about unique aspects of its car and trucks are part of General Motors’ strategy for fixing its ailing North American business, the head of GM North America said yesterday.
Gary Cowger acknowledged the troublesome start to the year for the world’s biggest automaker, saying it was hurt by strong business at the end of 2004, rising interest rates, competition and health-care costs.
GM confirmed yesterday that it is considering selling a stake in its commercial mortgage-interest business.
SEC imposes fines to resolve allegations
In three unrelated cases, federal regulators fined Citigroup and Putnam Investments $20 million and $40 million respectively and a smaller brokerage firm $100,000 to resolve allegations that they concealed from customers the fact that brokers were paid to recommend certain mutual funds, creating a conflict of interest.
The Securities and Exchange Commission (SEC) announced the separate settlements yesterday with Citigroup, the biggest U.S. financial institution; Putnam, the seventh-largest mutual fund company; and brokerage Capital Analysts, which agreed to pay a civil fine of $100,000 and $350,000 in restitution.
Compiled from Bloomberg News
and The Associated Press