Company News: Novartis, Apple, Ikea, Tesla Motorsby
Novartis: A landmark ruling in India
India’s Supreme Court denied Novartis’s request for patent protection for its Gleevec cancer treatment, allowing the nation’s generic drugmakers to continue selling low-cost copies. Big Pharma decried the ruling as an assault on intellectual property, while nonprofit groups praised it for expanding access to medicines. The court upheld a 2006 ruling that found the drug violated a provision of Indian law that prohibits so-called evergreening—when companies tweak a drug’s chemical makeup, without real medical benefit, to extend its patent life. Gleevec, used to treat a deadly blood cancer, was Novartis’s top global seller last year with sales of $4.7 billion.
Public Companies: @SEC approves Twitter releases
The Securities and Exchange Commission agreed to let companies use social media outlets such as Facebook and Twitter to announce key information as long as investors are told where to look for the information. The SEC clarified the disclosure guidelines in a report of an investigation involving Netflix CEO Reed Hastings, who posted monthly viewership numbers on his Facebook page in July, even though the company didn’t report the data in a public filing or press release. The SEC also said it will not take action against Hastings.
Apple: Siri, say ‘sorry’ in Mandarin
Apple CEO Tim Cook apologized amid criticism from China’s state-run media, including a People’s Daily editorial headlined “Destroy Apple’s ‘Incomparable’ Arrogance.” Apple was attacked for repairing broken iPhones instead of replacing them and for warranties that were too short. Apple says it will replace older faulty iPhones and pledged to improve training, customer service, and its monitoring of authorized retailers in the country. China, Apple’s biggest market after the U.S., generated up to $22.8 billion in sales in fiscal 2012.
Ikea: Offsetting a reliance on Europe
Ikea plans to increase its number of Chinese stores from 11 to 40 by about 2020, targeting locations including Shanghai, Beijing, Ningbo, and Chong-qing. China is on track to soon become the second-largest market for the home furnishings retailer. About three-quarters of Ikea’s 338 stores are in Europe, where consumers are financially strapped, creating pressure on Ikea to diversify. The company, which is based in Sweden, is also expanding in Russia this year and is testing e-commerce in 10 countries.
Tesla Motors: Financing now available
Tesla Motors will begin offering lease-style loans for its Model S sedan. The financing, funded by U.S. Bancorp and Wells Fargo, is a 63-month loan at a 2.95 percent interest rate. The arrangement allows customers to apply state and federal electric-car tax credits, which Tesla says range from $7,500 to $15,000, to the minimum 10 percent down payment. After three years, customers can resell their car to Tesla at a price pegged to the depreciation rate of Daimler’s Mercedes-Benz S-Class sedan.