Business Digest


June 02, 2005

In the Region

MedImmune loses bid to revive lawsuit on royalty payments

MedImmune Inc., maker of the Synagis infant lung treatment, lost a bid to revive a lawsuit that would have halted its royalty payments to Johnson & Johnson's Centocor unit for the drug, MedImmune's biggest seller.

In a decision posted on its Web site yesterday, the U.S. Court of Appeals for the Federal Circuit in Washington upheld a June 2004 ruling by U.S. District Judge Alexander Williams in Baltimore. Gaithersburg-based MedImmune couldn't sue to invalidate the patent because it had agreed to make payments under a contract with Centocor, Williams ruled.

MedImmune claimed in its 2002 lawsuit that it signed the contract under duress, and accused Centocor of fraudulently obtaining the patent and threatening court action. Synagis, which prevents lung infections in children younger than age 2, accounted last year for $942 million, or 84 percent, of MedImmune's product sales.


NYSE is shut down by communications glitch just before bell

The New York Stock Exchange halted trading with four minutes to go before the closing bell yesterday because of a communications malfunction in the system that transmits stock prices to brokers worldwide.

The exchange had no comment on the trading disruption. The exchange considered reopening trading as late as 4:45 p.m., but decided against it.

The last trade conducted in a given stock before the trading was halted was considered the stock's closing price. Trading was halted at 3:56 p.m.

Stocks listed on the Nasdaq stock market were unaffected, but the Nasdaq did not trade any NYSE-listed securities in its SuperMontage system when the NYSE halted trading, a spokeswoman said.

Fannie Mae board makes interim CEO permanent

Taking another step in the mortgage lender's struggle to recover from an accounting scandal, Fannie Mae's board of directors removed interim from the title of Chief Executive Officer Daniel H, Mudd yesterday and made him the permanent CEO.

Mudd, previously chief operating officer, became the interim head after an executive shakeup in December, when CEO Franklin Raines retired amid regulatory questions about accounting practices that may result in the company being forced to acknowledge it overstated earnings by as much as $11 billion in recent years.

Chairman Stephen B. Ashley, who the company said will continue in that role, noted that the board conducted its review, consideration and selection of Mudd as CEO in consultation with the Office of Federal Housing Enterprise Oversight, the company's lead regulator.

Before joining Fannie Mae, Mudd was president and chief executive of GE Capital, Japan. The son of television journalist Roger Mudd also was an officer in the Marines and was decorated for combat service in Beirut, Lebanon.

Fitch Ratings downgrades Northwest Airlines' debt

Fitch Ratings downgraded Northwest Airlines Corp. debt yesterday, saying the nation's fourth-largest airline is taking too long to cut workers' pay while fuel costs remain high.

Fitch cut $1.7 billion of Northwest's senior unsecured debt to CCC+, from B. It also rated Northwest's $975 million secured bank line of credit at B- and said its outlook for Northwest remains negative.

Northwest had $2.1 billion in unrestricted cash as of March 31, so a bankruptcy filing is not imminent, Fitch analyst Bill Warlick said. But with a loss of $458 million in its past quarter, Northwest is continuing to dip into the cash.

Trump, group hope to sell land in N.Y. for $1.8 billion

Donald Trump and a group of investors plan to sell a parcel of Manhattan riverfront land and three buildings for $1.8 billion, the biggest residential sale in city history, a source familiar with the matter told the Associated Press yesterday.

The land, the former site of a railyard, will be sold to the Extell Development Corp. and Carlyle Group, said the source, who spoke on condition of anonymity because the deal is not final. Details were reported yesterday by The New York Times.

The 77 acres stretch from 59th to 72nd streets on the Upper West Side along the Hudson River. The area is known as Riverside South or Trump Place. Extell is buying the three rental buildings on the side and lots on which to build eight more apartment houses, the Times reported. Four condominium buildings at the site are not part of the deal, the paper said.

Sprint vote likely in July on merger with Nextel

Sprint Corp. shareholders are likely to vote on the company's proposed merger with Nextel Communications Inc. early next month, with federal approval expected shortly afterward, Sprint Chairman and CEO Gary Forsee said yesterday.

Forsee told analysts in New York that the companies are moving quickly through levels of federal and state regulatory review, and that the Justice Department probably will approve the deal once shareholders vote.

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