Pharmacy Industry News: US Stocks Post Fourth-Straight Gain As Worries Over Greece Ease
US Stocks Post Fourth-Straight Gain As Worries Over Greece Ease
U.S. stocks closed sharply higher Tuesday, notching a fourth-consecutive day of gains, as investors bet Greece will take appropriate actions toward averting a sovereign-debt default.
The Dow Jones Industrial Average closed up 109.63 points, or 0.91%, at 12190.01. The Standard & Poor’s 500-stock index gained 17.16 points, or 1.34%, to 1295.52. Both indexes have risen for four consecutive days and six out of the last seven.
Economically sensitive sectors such as materials, tech and energy were among the biggest gainers. Consumer staples was the only sector to end the session in negative territory.
The technology-heavy Nasdaq Composite rose 57.60 points, or 2.19%, to 2687.26, its biggest point gain since Sept. 1. The index has added 2.7% over the last two days, its biggest two-day gain since April 21.
Investors anticipated Greek Prime Minister George Papandreou will survive a crucial vote of confidence in parliament late Tuesday.
The confidence vote, which is expected at 5 p.m. ET, comes just days after a mass protest over new government cutbacks shook Greece’s political establishment.
“If Greece is going to fall apart, the last thing that would be strong would be the euro,” said Jim Meyer, chief investment officer at Tower Bridge Advisors. “I think the market’s accepting that this is a done deal and it would be a big surprise if it’s not.”
The euro strengthened on the day, trading above $1.44.
Greece is expected to get its next quarterly installment of bailout money as long as the country’s parliament passes a contentious package of budget measures. European finance ministers also showed modest signs of progress toward a broader agreement for a bigger package of aid to Greece for coming years.
Deutsche Bank strategist Alan Ruskin is worried the market may be too optimistic that the confidence vote will pass.
For stocks, “the pop on a yes will be small compared to the cataclysmic blow on a no,” he said in a research note. “Market technicals are then widely primed for a stumble down the elevator shaft, if any of Greece’s confidence vote, next week’s ‘budget’ bill, or July’s ‘implementation’ bill for 2011 tax measures take a wrong turn.”
Investors also await the conclusion of the Federal Reserve’s two-day policy-setting meeting, which kicked off Tuesday. The central bank’s policy statement and Chairman Ben Bernanke’s news conference are slated for Wednesday.
“The Fed has been so transparent that I’d be shocked if anything comes from the meeting other than what we’ve already heard,” said Chip Cobb, senior vice president at Bryn Mawr Trust Asset Management. “Never say never, but the probability of that at this stage of the game is very unlikely.”
Greek optimism overshadowed U.S. housing data showing sales of existing homes fell last month to the lowest level in six months.
Among stocks in focus, shares of Walgreen slumped $1.90, or 4.2%, to $43.28, after the largest U.S. drugstore chain said negotiations to renew its contract to be part of the Express Scripts pharmacy provider network were unsuccessful. The news came as Walgreen said its fiscal third-quarter earnings jumped 30% amid continued sales growth.
Best Buy authorized a new $5 billion stock-repurchase program and raised its quarterly dividend by 7%, prompting shares to rise 84 cents, or 2.7%, to 32.28.
Barnes & Noble’s fiscal fourth-quarter loss widened on higher expenses, though the bookseller posted higher revenue thanks to surging online sales. Shares dropped 1.20, or 6%, to 18.94. The nation’s largest bookstore chain said it wouldn’t offer an earnings or sales estimate for its new fiscal year because of the takeover offer made last month from Liberty Media Holding Corp.
Susquehanna Bancshares agreed to acquire Pennsylvania bank Tower Bancorp in a cash-and-stock deal valued at about $343 million, continuing a trend of consolidation among the state’s regional banks. Susquehanna shares dropped 64 cents, or 7.7%, to 7.70; shares of Tower Bancorp soared 6.43, or 32%, to 26.80.
Alliance Data’s LoyaltyOne Business Signs Long-Term Renewal With Top-Ten AIR MILES® Sponsor, The Jean Coutu Group; Quebec’s Drugstore Retail Leader and One of Canada’s Leading Pharmacy Chains
Alliance Data Systems Corporation ADS
+3.52% , a leading
provider of loyalty and marketing solutions derived from transaction-rich data, announced that its Canadian coalition loyalty business has signed a long-term renewal with The Jean Coutu Group (PJC) Inc. CA:PJC.A
+1.48% .
The multi-year agreement provides for The Jean Coutu Group to remain a sponsor in LoyaltyOne’s AIR MILES® Reward Program as the exclusive pharmacy retailer in Quebec. Jean Coutu has been a sponsor in the program since 2003.
The Jean Coutu Group is the franchisor of one of the leading pharmacy chains in Canada with 389 franchised stores in Quebec, Ontario and New Brunswick under the banners PJC Jean Coutu, PJC Clinique, PJC Jean Coutu Sante and PJC Jean Coutu Sante Beaute. For Fiscal 2011, revenues were (CDN) $2.598 billion.
The AIR MILES® Reward Program is Canada’s premier coalition loyalty program, with approximately two-thirds of Canadian households actively collecting reward miles. AIR MILES collectors earn reward miles at more than 100 leading brand-name sponsors representing thousands of retail and service locations across Canada. AIR MILES reward miles can be redeemed for more than 1,200 different rewards, such as travel, movie passes, entertainment attractions, and electronic merchandise.
“A significant sponsor in our loyalty coalition, Jean Coutu’s continued focus on ensuring marketing concepts are industry leading and meet customer expectations has provided it with a competitive advantage in the retail pharmacy category and continues to have a positive impact on revenues and customer loyalty,” said Bryan Pearson, president of LoyaltyOne. “With anticipated increases in consumer spending on pharmacy, health-related and beauty products, we will continue to work closely with Jean Coutu to design and implement targeted consumer marketing initiatives that grow network stores sales and increase wholesaler revenue and reward miles issuance.”
“Not only does the AIR MILES Program allow us to attract customers and ensure their loyalty, but it is also a source of information on our customers and their purchasing profiles,” said Alain Lafortune, executive vice president, Purchasing and Marketing, The Jean Coutu Group. “This strategic marketing tool allows us to differentiate ourselves through targeted marketing initiatives but also to adapt our strategies in accordance to the real and unique purchasing profiles of our customers.”
About The Jean Coutu Group
The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Company operates a network of 389 franchised stores in Canada located in the provinces of Quebec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Sante and PJC Sante Beaute, and employs more than 18,000 people. Furthermore, as of December 2007, the Jean Coutu Group owns Pro Doc Ltd (“Pro Doc”), a Quebec-based subsidiary and manufacturer of generic drugs. The Company also holds a significant interest in Rite Aid Corporation (“Rite Aid”) a national chain of drugstores in the United States with nearly 4,700 drugstores in 31 states and the District of Columbia.
About Alliance Data
Alliance Data® ADS
+3.52% and its combined businesses is North America’s largest and
most comprehensive provider of transaction-based, data-driven marketing and loyalty solutions serving large, consumer-based industries. The Company creates and deploys customized solutions, enhancing the critical customer marketing experience; the result is measurably changing consumer behavior while driving business growth and profitability for some of today’s most recognizable brands. Alliance Data helps its clients create and increase customer loyalty through solutions that engage millions of customers each day across multiple touch points using traditional, digital, mobile and other emerging technologies. Headquartered in Dallas, Alliance Data employs approximately 8,500 associates at more than 50 locations worldwide.
Alliance Data is a leading provider of marketing-driven credit solutions, and is the parent company of Epsilon®, a leading provider of multi-channel, data-driven technologies and marketing services, and LoyaltyOne®, which owns and operates the AIR MILES® Reward Program, Canada’s premier coalition loyalty program. For more information about the company, visit our web site, www.AllianceData.com , or you can follow us on Twitter at www.Twitter.com/AllianceData .
Alliance Data’s Safe Harbor Statement/Forward Looking Statements
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management’s beliefs and assumptions, using information currently available to us. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these forward-looking statements are subject to risks, uncertainties and assumptions, including the anticipated effects of the CARD Act, potential effects of the Epsilon data incident, and those discussed in our filings with the Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements contained in this presentation reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this presentation regarding Alliance Data Systems Corporation’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the most recently ended fiscal year. Risk factors may be updated in Item 1A in each of the Company’s Quarterly Reports on Form 10-Q for each quarterly period subsequent to the Company’s most recent Form 10-K.
Next-Generation Pharmacist™ Awards Program Announces 2011 Finalists
Parata Systems and Pharmacy Times have announced the finalists for the second annual Next-Generation Pharmacist awards. The 2011 program, honoring pharmacists who define the future of the industry across a wide range of practice settings, attracted nearly 350 nominations from across the country.
This year’s finalists include pharmacist innovators, student pharmacists, and pharmacy technicians across 11 distinct categories. The program introduced the “Long-Term Care Pharmacist of the Year” and the “Military Pharmacist of the Year” categories in 2011.
A panel of esteemed judges—pharmacy thought leaders in their own right—chaired by Pharmacy Times Editor-in-Chief, Fred M. Eckel, RPh, MS, selected three finalists for each category, with four finalists in the Lifetime Achievement Category as a result of a tie. These finalists represent a true cross-section of the industry—from large chain retailers and independent pharmacies to military health clinics and educational institutions in 23 different states.
One winner from the pharmacist categories will also receive the program’s highest honor—”2011 Next-Generation Pharmacist.” This award recognizes a licensed pharmacist who embodies the highest standards of patient care, management and operations, while demonstrating an uncompromising vision for the pharmacy industry.
Pharmaceuticals and philanthropy
“My father-in-law, a dear man, gave me a wonderful gift. He told me, ‘If you want to marry my daughter Myrna, you’ll have to join the board of governors of Hebrew University.’ The ties with his daughter, and through her with the university, are one of the most important of my life,” businessman and philanthropist Isaac Kaye told “Globes”.
Few people admit that their father-in-laws have such involvement in their lives, especially when it leads them to a relationship that costs quite a bit of money. Kaye, 80, a former top executive in Europe’s generic pharmaceuticals industry, was a partner with Philip Frost in Ivax, which they sold to Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) for $7.4 billion in 2006, is one such man.
Although Kaye had retired before the sale of Ivax, he was still a partner in the company, and he made hundreds of millions of dollars on the sale, which turned him into a billionaire.
In 1993, Kaye established the Kaye Innovation Awards at the Hebrew University of Jerusalem. Prizes awarded to date have totaled millions of dollars, on top of his tens of millions of dollars in donations to the university. The awards are granted to inventors who improve the human condition and contribute to the university, which earns royalties from them.
Kaye has been expanding applied research activity in Israel in recent years. He and his son, Steven Kaye, are partners in Israel Healthcare Ventures Ltd., alongside managing partner Dr. Hadar Ron. Isaac Kaye told “Globes” that this led him to become more active in Israel’s life sciences industry.
A resident of London, Kaye makes frequent trips to Israel, and his two brothers live here. “That’s how things turned out,” he says, “I was born in Rhodesia, a British colony at the time, so it was convenient for me to go into business in the UK. But I have already informed my family that at the end of my life, I want to grow old in a facility on the beachfront in Herzliya, just like my brother.”
Kaye’s roots are in the Jewish community of Southern Rhodesia (now Zimbabwe). He never imagined that he would achieve such success in the international arena, starting as a pharmacist in the family business and becoming the generics tycoon of southern Africa.
“I had a pharmacy,” Kaye relates. “The market was undeveloped, and I opened a chain of pharmacies. I then began producing generic drugs and marketed them across southern Africa. I even bought products from Teva, which wasn’t yet called that, which I marketed in the Congo.”
“Globes”: What was it like as a pharmacist in Rhodesia in the 1960s?
Kaye: “It was fine at first. It was an advanced colony in terms of culture, infrastructure and technology, but I didn’t feel that it was my country. I’m the ultimate wandering Jew.”
In the 1960s, when political friction began in Rhodesia, the Kaye family moved to South Africa. “Since we had developed our business across the continent, the move was fairly easy and necessary,” he says.
In South Africa, Kaye expanded his pharmacy empire, spreading across most of southern Africa. “That’s how it is when you get on the train to success,” he says. “Afterwards, you don’t want to get off. A man strives for success in what he does, and it’s not a matter of money.”
Kaye’s time in South Africa was not always smooth. He aroused local ire, partly because he supported the Nationalist Party, which created the Apartheid regime, and because he was a generous philanthropist to doctors and hospitals and therefore accused of buying the market. In his defense, he says that all he wanted to do was to show his appreciation for these doctors.
Today, with no connections to South Africa, he says that his donations to the Hebrew University are “the best way to show my appreciation for these researchers. How else will they finance their studies?” In his eyes, he is consistent.
“We supported the Nationalists, and it ultimately made a deal with Nelson Mandela. I previously tried to broker a similar deal in Rhodesia, but it failed, and today Zimbabwe is a failed state.”
Kaye subsequently left South Africa for political reasons. “We thought there would be another revolution,” he says. Myrna adds, “In the end, this wonderful man, Mandela, was released, and that saved the situation. Mandela is amazing, but so was Frederik de Klerk, the last leader of the Nationalists, because he created a dialogue with him. The work of the Truth and Reconciliation Commission that was set up to shed light on the atrocities of the Apartheid regime and to give its victims a sense that their voices were heard, was very important.”
The next question that begs to be asked is whether this can teach something about the political situation in Israel.
“Yes. You have to talk with the enemy. If wise people talk with each other, it’s possible to find a solution. If you don’t talk – that’s a total disaster. I love to talk with Arab students at Hebrew University. I don’t feel that they are different from me or from the Jewish students.”
While all this was happening in South Africa, the Kaye family was establishing itself in London, where they arrived in the mid-1980s. Kaye founded a flourishing generics company Harris Pharmaceuticals Ltd., which went on to become Norton Healthcare Ltd., which in turn was acquired by Ivax Corporation, which was acquired by Teva.
How were you able, as a new immigrant from South Africa, to establish a successful generics drug company in Britain? “I sold the South African business at a price that I will keep to myself, but which I am prepared to say left me financially comfortable. Before that, I invested a bit in the British generics market. The market flourishing was at the time, after changes in US law, which created many opportunities.
“At that time, my friends at Teva chased after me to acquire us, but I felt that the time was not right. We still had to grow.”
Kaye quickly established himself in the UK, becoming a major donor to the Labor Party, activity that once again created political opponents. Meanwhile, Norton Healthcare spread from the UK across Europe.
Kaye met Philip Frost, the founder of Ivax and now the chairman of Teva, through a mutual friend. “We went on a family holiday together. The personal click was instantaneous, partly because of our love for Israel. There was also clear synergy between our companies.”
Kaye sold Norton Healthcare to Ivax in a deal that gave Kaye ₤25 million and a stake in the merged company. The size of the holding is still confidential. Norton became Ivax UK Ltd., and Kaye served as chairman.
Ivax competed against Teva in Europe, and Kaye fondly remembers the rivalry. “Eli Hurvitz did wonderful work at Teva. He’s a great man, a great Israeli. A man of the people.”
Where do you think the generics market is headed?
“Only up, for the same simple reasons that is driving the growth of the brand drug business – the population is aging, emerging markets are entering the circle of health payers, and people’s growing awareness about their health.”
The brand companies’ battle against the generics is particularly sensitive in Africa. In the 1990s and early 2000s, African countries and their lobby in the West called on big pharma not to protect their patents in Africa, for humanitarian reasons. Big pharma companies initially fought back, but public opinion defeated them, possibly combined with business considerations.
“The big companies were all right in this matter,” says Kaye. “They understood that it was better and cheaper to forego patents in the African market, and maybe even certify local companies to manufacture drugs for them. Microsoft founder Bill Gates was a great help. Today, the companies sell drugs at basement prices to the Gates Foundation, and he donates them to patients, because the pharmaceutical companies agreed to this model. A man can contribute from his assets or from himself. Gates gives from both, and I also prefer such a donation.”
In addition to his philanthropy to the Hebrew University, Kaye has ties with IHCV, which was co-founded by the late Prof. Uri Levitt and Dr. Hadar Ron. Kaye says with regret, “He did not even have a year with us. Hadar has what it takes for the job. He’s a lawyer, doctor, and inventor. The fund is successful and working with it very satisfying. We’ve founded 24 companies, had seven exits, and closed only two companies. I and my son, Steven, not only gave money, we’re really involved in managing the fund.”
Ron says, “The fund was set up at the time of the classic model, but we have a rule: our investment committee, which comprises the partners, must make unanimous decisions. We don’t restrict ourselves to a field within medical devices or a company stage. The pace at which a company develops does not necessarily determine how close it is to an exit. Late-stage companies sometimes get stuck, and early-stage companies sometimes suddenly have an exit. It’s impossible to know.”