Amazon Lands Itself in the Middle East; Price of New Skin Drug Will Make Your Skin Crawl; Spoiler Alert: Uber’s Not So Diverse

Just Souq it up…

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In case you were wondering what Amazon’s been up to lately, here’s a hint: It’s got nothing to do with drones. Sort of. Instead, the online marketplace just agreed to scoop up Souq.com, the Dubai-based Amazon of the Middle East, and apparently the largest online retailer in the region. While we don’t know the exact numbers involved in the deal, we do know that 1.) There was one other bid by a billionaire from Dubai and 2.) It’s apparently the biggest tech merger & acquisition in the Arab world. Ever. At least according to somebody at Goldman Sachs. But I guess Goldman Sachs would know something like that. Rumor has it that although the Dubai billionaire, Mohamed Alabbar, counter-offered $800 million for the company, Amazon will be paying even less. What’s super-interesting about that factoid is that last year Souq.com was valued at around a billion following a funding round.

What a bargain…

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The good news is that the FDA actually approved a new treatment for severe eczema. The bad news is that it costs $37,000 a year to get it. But for some it might be worth every penny considering that one-third to two-thirds of the patients who used the drug actually regained clear or almost-clear skin.  Manufactured by Frace’s Sanofi SA and New York’s Regeneron Pharmaceuticals, the just approved drug, called Dupixent, is actually injected under the skin every two weeks, unlike previous eczema treatments, which are typically topical and often involve steroids and antihistamines. The injection apparently contains an antibody that does something to basically scare off the skin condition condition. Sort of. In any case, while $37,000 seems like a ridiculous amount of money to pay – because it is – consider that it’s still lower than Humira and Enbrel, drugs that also treat skin ailments. However, Wall Street didn’t look at it that way and instead sent shares of Regeneron down upon news of the five-figure price tag.

 

Well, what did you expect?

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Uber finally finally released its very first diversity report following a slew of issues, a ton of criticism, not to mention claims of sexual discrimination. But the only surprising thing about the report is that there weren’t any.  Surprises, that is. Sure the company employees minority groups. Unfortunately, those groups aren’t as well-represented at the top. The ride-hailing app employs about 12,000 people globally, and about 64% of them are males. Of that 12,000 figure, 36% are women and 22% of those women hold higher-level positions, while 15% of them work in the company’s tech areas. In the U.S., however, the numbers are almost embarrassing as blacks hold just 2.3% of leadership roles, while Hispanics represent .8% of those positions  – just not on the technical side.  And just to be clear, those percentages are not exclusive to Uber, but rather are fairly representative of Silicon Valley tech companies. Except now Uber pledged to throw $3 million at the problem in order to find solutions to make those numbers...better.

EpiPen Getting Dose of Competition; Gaping Gender Gap; Wells Fargo So Very Sorry Indeed

Shot to the heart…

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EpiPen, which currently controls 95% of the auto-injector epinephrine market, now has to scoot its greedy butt over to make way for a much-needed competitor. Privately-held Kaleo Pharma is bringing back Auvi-Q, the auto-injector device that was taken off the market back in 2015 because of dosage delivery problems. Apparently the problems have been fixed and you can expect to see Auvi-Q back on the shelves in the first half of 2017. However, before you breathe a sigh of relief, experts have said that the price for Auvi-Q might not be all that competitive. In fact, between 2013 – 2015, Kaleo’s price hikes matched Mylan’s and the cost for the auto-injector might go for $500, just $100 less than EpiPen’s highly-criticized $600 2-pack. Make no mistake. Kaleo’s no more an angel in the pharmaceutical industry than Mylan is. The company is also known for making Evzio injectors which use naloxone to treat opioid-overdoses. Once upon a very short time ago – like a few years – the devices cost $690. But not anymore, as the devices go for $4,500 per two-pack. Kaleo has promised that its Auvi-Q device will be affordable and expects insurance companies to help see that promise through. In the meantime, as Mylan’s generic version of its EpiPen is expected to go for $300, the FDA nixed Teva Pharmaceuticals application for a generic version of the EpiPen citing “major deficiencies.” Yikes.

Rock on, Rwanda!

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Just when you thought the gender pay gap couldn’t get any worse, along comes the World Economic Forum to tell us otherwise in its Global Gender Gap Report. The study examined 144 countries and took into account all kinds of factors like economic opportunities, political empowerment and education. The study disconcertingly found that if we wait 170 years, that pesky gender gap might actually close. But who wants to stick around until the year 2186? Sadly, last year’s projection had us holding our collective breath until 2133 but in all fairness, if we actually start to do things correctly, the gender gap could “could be reduced to parity within the next 10 years.” That’s got to be somewhat reassuring, right? One of the more unpleasant nuggets in the report illustrated that average female salaries were half those of men and disturbingly enough, education gains didn’t necessarily help women increase their salaries. Iceland, Finland, Norway, Sweden and Rwanda took the top five spots in that order. (Yes, Rwanda).  I’m thinking maybe it’s time to start poaching our political leaders from those countries. Just a thought. The United Kingdom ranked twentieth, even with a female Prime Minister. Go figure. And even though the U.S. ranked twenty-eighth last year, this year the Land of the Free fell to spot number 45, apparently due to a decline of women in the labor force. At least the U.S.’s ranking wasn’t as bad as Yemen, which ranked dead last. Saudi Arabia, Syria and Pakistan also claimed the loser spots which I suppose makes sense considering those countries tend to treat women as property instead of human beings.

 

It still hurts…

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After just 13 days into his tenure, Wells Fargo already has its latest CEO, Tim Sloan, apologizing. Of course, that apology is over the account scandal that already cost the bank $185 million in fines from the Consumer Financial Protection Bureau. But what’s different about this apology is that Sloan was actually addressing the bank’s 260,000 employees. Which is a step up from last month when former Wells Fargo CEO John Stumpf took to blaming 5,300 lower-level employees instead. However, karma is not done with the bank just yet as Wells Fargo could end up eating $8 billion in lost business in the next 12-18 months since approximately 14% of its current customers are looking to switch to more trust-worthy competitors.  As Sloan noted in his apology,“many felt we blamed our team members. That one still hurts, and I am committed to rectifying it.” And so the bank is hiring culture experts to fix the weaknesses that led to this ugly episode. Of course, cultural weaknesses aside, the bank can look forward to both criminal investigations and class-actions suits. Which is only fair considering that the wrongfully blamed lower-level employees – many whom made less than $15 per hour – were met with retaliation after they dared to call in to the bank’s internal ethics hotline.

American Apparel Gets Offer with Strings; Another US Company Heads to the Emerald Isle; The Yogurt Wars. Enough Said.

Down but not out…

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American Apparel might be bankrupt but that are still a few investors who would like to help revive the company. And it’s the latest offer that’s got people talking. Hagan Capital Group, along with Silver Creek Capital Partners, want to scoop up American Apparel for a sweet $300 million. And one more thing…they want Dov Charney reinstated. It’s the same Dov Charney who is also the founder and former CEO of American Apparel, and who was booted following some sexual misconduct allegations, not to mention other allegations involving the misuse of corporate funds. Just saying. Incidentally, Dov Charney hired Cardinal Advisors to help him line up investors who would see to it that he would be reinstated at the company he founded. How clever indeed. Several backers strongly feel that the company’s performance went down after Charney was shown the door.  Chad Hagan of Hagan Capital Group feels Charney was wronged adding, “We are willing to be friendly and genteel, but the fact is we want this company and we want Dov back in…We are deadly serious.” Not sure what he means about the deadly serious part but that is still nothing short of a ringing endorsement for Mr. Charney.

Invert this…

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After six long months, pharmaceutical company Baxalta International Inc. finally said yes. Of course that yes comes with a $32 billion check but hey, it’s still a yes. The lucky suitor is Ireland-based pharmaceutical company, Shire Plc., which is offering Baxalta shareholders approximately $45.57 in cash and stock – an offer that represents an approximately 38% premium. The two companies expect to crank out $20 billion in revenues in the next year.  It’ll be helped by that fact that Baxalta’s corporate tax rate will drop from a very onerous 23%-24% in the United States, to a more corporate friendly tax rate of 16%-17% in Ireland. Gotta love an inversion. Shire’s main product is Vyvanse, used to treat symptoms related to ADHD.  But it’s Baxalta’s drug treatments that has corporate pharmaceutical tongues wagging. The company’s treatments focus on rare blood conditions, cancer and immune system disorders. While a relatively small population requires those treatments, those treatments are insanely lucrative, bringing in mega bucks for drug companies that offer them. In fact, 65% of Baxalta’s revenues come from treatments for rare blood disorders.

Not so good bacteria…

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Believe it or not it’s a yogurt smack down as Greek yogurt churner Chobani took aim at its competition last week. But now that competition is fighting back. Just three years ago, the Greek yogurt industry was growing at a rate of 60%. How ironic that the opposite is true for Greece. But I digress. In any case, the industry is now only growing at about 5%, with Chobani being the largest Greek yogurt seller in the world. The competition to differentiate is fierce – that is, if such a term can be applied to yogurt. Chobani launched an ad campaign on January 6 targeting Dannon’s use of sucralose – an artificial sweetener that has been FDA approved for food for the last 15 years. Sucralose apparently has chlorine in it and should therefore cause a potential yogurt enthusiast to purchase a container just to go ahead and chuck it – just like in Chobani’s ad. Which is weird because wouldn’t you first read the ingredients before shelling out money for the product? Just saying. Chobani also goes after Yoplait Greek 100 over its use of potassium sorbate, an ingredient that Chobani’s commercial actor points out is also used to kill bugs. Yum. Dannon wasted no time in sending out a cease and desist to Chobani charging that its claims are “false, misleading, disparaging and deceptive.” Chobani filed a complaint against that cease and desist letter arguing that its campaign for it “is not false, misleading…” Well, you get the picture.

Drug Company Ex-pat? Suspicious Packages and License to Bitcoin

Isn’t that a tax relief?

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Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Chicago-bsed drug giant AbbVie, maker of the very popular Humira,  is buying fellow company Shire Pharmaceuticals for close to $55 billion. Wall Street seems to be happy about the strategically financial move. Too bad the Obama administration and some members of Congress don’t share the joy. And why whouldn’ they? Tax inversion my friends.  Basically, it’s shifting the tax residence of the company abroad, in this case the UK. AbbVie will now have a much more manageable tax rate of 13% instead of an onerous 22% which will free up the company to do all sorts of new and exciting things, although its headquarters will still remain in Chicago. It’s the largest inversion deal. Ever. But Treasury Secretary Jacob Lew is particularly miffed and said, “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.” However, others argue the US government ought to make the tax laws more hospitable to these big companies.

Do I need to sign for that?

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Image courtesy of posterize/FreeDigitalPhotos.net

FedEx isn’t having the best day. It probably has something to with that indictment on drug-trafficking charges. Hard to believe (or not) but the shipping company was indicted by a San Francisco grand jury for conspiracy to deliver prescription drugs for illegal internet pharamcies. Whoops. The indictment also says that FedEx knew about this for a decade and even took precautions to protect itself. To be fair, FedEx says it asked the US government on several occasions for a list of the illegal pharmacies but the government apparently never got around to it. So there. However, the DEA and FDA said FedEx was repeatedly warned. Couriers in Kentucky and Tennesee, among other places, feared for their lives as packages were delivered to empty parking lots, vacant homes and of course the occasional school. Because, after all, what alleged crime would be complete without involving the use of a school? FedEx delivers over 10 million packages a year and pulled in $44.3 billion in revenue for 2013. FedEx was charged with 15 counts of conspiracy but no officers have been charged. The company could face fines of over $800 million.

Bitcoin to go mainstream?

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Image courtesy of cuteimage/FreeDigitalPhotos.net

The New York  Department of Financial Services is showing some bitcoin love by attempting to create a license for the crypto-currency. Sounds too good to be true, huh? But really it’s an attempt to make the virtual currency more mainstream. People engaged in criminal and other questionable activities tend to like bitcoin for its anonymous aspect. Who wouldn’t. But this new system might just make those shady transactions a little bit more challenging to complete. Policies and procedures would also be established to assist with the inenvitable consumer complaint and also to outline what happens in the case of a problem ala Mt. Gox and its hacker issue that caused the bitcoin trading exchange to go bust. Ben Lawsky, Superintendant of Financial Services said, “We have sought to strike an appropriate balance that helps protect consumers and root out illegal activity – without stifling beneficial innovation.” Sounds fair.