In the Region Corvis to contract out manufacturing, lay...

BUSINESS DIGEST

August 15, 2002

In the Region

Corvis to contract out manufacturing, lay off 30 or more

Corvis Corp. announced plans yesterday to contract out much of its manufacturing operations to reduce costs, a move that will lead to 30 or more layoffs in Columbia over the next six months.

The company said it has signed a multiyear contract with Celestica Inc., a Toronto technology manufacturer, to make its fiber-optic networking equipment. Corvis will lay off about 30 percent of its 115 manufacturing employees when a transition to Celestica is completed in six months, retaining the rest for work on product development and other operations.

Corvis last month reported a $119.1 million second-quarter loss, and it has laid off more than 500 employees around the world in the past year. The company, which now has about 900 employees, says the outsourcing is necessary to "improve financial strength and operational flexibility."

State Medicaid funds withheld from 2 HMOs

The state health department says it is withholding $142,064 from two HMOs that participate in the Medicaid program as sanctions for failing to meet clinical standards.

Debbie I. Chang, deputy health secretary, said the department is pleased, however, that care is improving overall and that four of the six HMOs met all the standards in the annual "care audit," a review of medical records from last year.

This year's sanctions were $129,763 for United HealthCare, which has an enrollment of 91,000, and $12,301 for Helix Family Choice, which enrolls 16,400. Overall, the Medicaid program had an enrollment of 446,000 at the end of 2001 and pays the HMOs about $1 billion in state and federal funds.

NYSE applies to SEC to delist USAir shares

The New York Stock Exchange has applied to the Securities and Exchange Commission to delist the stock of US Airways Group Inc. The company's shares were suspended before the start of trading Monday.

The airline filed for bankruptcy Sunday, becoming the first major carrier to do so in the wake of the terrorist attacks of Sept. 11. The exchange said Monday that the listing status of the shares was under review.

US Airways said it is evaluating the exchange's action. The Big Board said US Airways might appeal the delisting move.

Appleseed to help review CareFirst conversion plan

The DC Appleseed Center for Law and Justice has won approval to intervene as the District of Columbia insurance commissioner reviews CareFirst BlueCross BlueShield's plan to convert to for-profit operation.

That will allow Appleseed to present expert testimony, request information from CareFirst and cross-examine witnesses during hearings expected in the fall in the District.

CareFirst, the region's largest health insurer, also has applications pending before insurance regulators in Maryland and Delaware. If regulators approve, CareFirst would be acquired by California-based WellPoint Health Networks Inc. for $1.3 billion

Appleseed also said it has hired outside experts to review the likely impact of a conversion on health care in the region and whether $1.3 billion is a fair price.

Beth Steel's chairman has treatable cancer

Bethlehem Steel Corp. said yesterday that its chairman and chief executive, Robert S. "Steve" Miller, has received a diagnosis of "a very early and treatable" form of prostate cancer. He and his doctor are deciding on an appropriate treatment.

Miller, 60, will remain head of Bethlehem until the company is on "stable ground, which includes restructuring Bethlehem's [retiree health care and pension] obligations and negotiating a new, more flexible contract with the United Steelworkers of America," Bethlehem said.

The struggling steelmaker hired Miller in September and filed for Chapter 11 bankruptcy protection a month later.

Takeda to develop, sell Human Genome drug

Takeda Chemical Industries Inc. intends to develop and sell, in Japan, a Human Genome Sciences Inc. drug, the latter company said yesterday.

Rockville-based Human Genome Sciences retains the right to develop and sell the anti-cancer drug, known as Trail-R1 monoclonal antibody, in the rest of the world. The drug is designed to trigger the deaths of tumor cells when it binds to a protein lying on the surface of some tumors.

Human Genome said Takeda has paid it an option fee for the rights, and Human Genome stands to get further payments from Takeda as the drug achieves pre-determined milestones in its development. The Rockville company also stands to get royalties on sales of the drug in Japan.

3rd contract in 5 months landed by VISICU Inc.

VISICU Inc., a Baltimore company that develops telemedicine systems to manage intensive care units, said it has won its third new contract in five months. Sutter Health, which operates 26 hospitals in Northern California, will contract with VISICU for an "eICU" to oversee 94 intensive care beds in four hospitals.

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