The heat is on Bristol-Myers Squibb (BMY) CEO Peter Dolan. On Feb. 12, Bristol backed off its earlier ultimatum to biotech partner ImClone Systems to rework the terms of the two companies' comarketing agreement for the cancer drug Erbitux.
In the wake of the Food & Drug Administration's refusal to consider the product's application, the 46-year-old Dolan had demanded more control over the drug and a reduction of the payments Bristol would have to make to ImClone (IMCL). But ImClone's board balked. And while sources close to the talks said Bristol was prepared to walk, Dolan now says the company will wait until a Feb. 26 meeting with the FDA to make any decision. Dolan has been criticized for overpaying for rights to the ImClone drug last fall when Bristol agreed to buy $1 billion in ImClone stock and pay an additional $1 billion as the drug moved toward approval. And that's not his only problem. At the same time, Bristol's growth will slow as generic competition hurts diabetes drug Glucophage and cancer drug Taxol and the near-term pipeline remains weak. It's the first good news in a long time for Ford Motor (F). On Feb. 12, federal regulators said they would not be launching an official investigation into the safety of Ford's Explorer sport-utility vehicle. Bridgestone/Firestone executives had demanded the probe, alleging that Explorer design defects had contributed to 271 deaths from rollovers of Firestone-equipped Explorers. But after what the National Highway Traffic Safety Administration called "extensive analysis"--including studying data supplied by Firestone--the agency took a pass. The NHTSA declared that it found Explorers were no more likely than comparable SUVs to crash after a tire tread separated. Ford still faces numerous lawsuits from accident victims and their families. The carmaker can only hope the news gives a shot in the arm to flagging Explorer sales, which fell 7% last year. With all the fanfare of its earlier rollouts of Windows XP and the Xbox, Microsoft (MSFT) launched its Visual Studio.NET software on Feb. 13. The hoopla may seem odd for what amounts to a geeky set of software-writing tools. Visual Studio.net, however, is the cornerstone of Microsoft's plans to extend its PC dominance to the Web, taking on Sun Microsystems' popular Java programming language. The software gives developers the tools to write programs that run not just on PCs but also on the Web--a linchpin in Microsoft's Internet strategy. That's why it spent 3 1/2 years and $800 million developing the software. The trick for Microsoft will be getting its legions of developers--most of whom write low-margin software for PCs--up to Net speed. United Airlines' (UAL) unionized mechanics voted down a 37% pay hike on Feb. 12, opening the door to a possible walkout. The 13,000 mechanics, who haven't had a raise since 1994, are angry at management. Still, the gap between the two sides is small, so the odds favor a settlement before the Feb. 20 strike date. At the same time, all of United's labor groups are talking to the company about swallowing concessions of up to 10% as part of a broad recovery program for the troubled carrier, which lost $1.8 billion last year. United hopes to slash more than $2 billion in costs. It also plans to borrow up to $3 billion and restructure $800 million in debt coming due this year. DuPont (DD) is slimming down. On Feb. 12, the chemicals giant announced it would create a separate unit for its $6.5 billion fibers business, which includes nylon and polyester, with plans for a possible spin-off by the end of 2003. Analysts have said for years that the Wilmington (Del.) company should sell the cyclical, slow-growing operation. The move is part of DuPont Chairman and CEO Charles Holliday Jr.'s efforts to produce reliable double-digit earnings growth. Moody's investors service has scaled back a plan to overhaul the way it rates credit. In response to criticism that ratings services are often late to alert investors that a company is heading toward bankruptcy, Moody's had proposed using market prices and a shorter time frame in its analysis. But Moody's says clients objected, fearful that market volatility would affect ratings. Clients fret that earlier downgrades will result in companies being cut off from credit and force frequent changes in portfolios limited to holding investment-grade bonds. Moody's now plans to stick with a long-term view but to keep a closer watch on accounting, disclosure, and off-balance-sheet obligations. -- The SEC plans to make companies file quarterly and annual reports more promptly.
-- Nine states have asked a judge to force Microsoft to reveal the Windows source code.
-- Walgreen's (WAG) has new policies to avert teen smoking as part of a pact with 40 states. Office Depot's (ODP) shares climbed 14.2% on Feb. 13, to 18.49, after it reported net income of $58.1 million in the fourth quarter, vs. $19 million in the year-earlier period. The office-supplies giant boosted profits, despite an 8% sales decline, by keeping a lid on expenses and closing some struggling U.S. stores.