Market briefing --- Matt (slow)
Interview: OSI Pharmaceuticals---Goddard, Dr. Colin---Chief Executive Officer
NYSE --- Deb (fast)
Boeing --- Su (fast)
welcome to the “world financial report,” i’m matt nesto. getting to the late-breaking news after the close of regular trading today. unitedhealth is buying oxford health for $4.9 billion, the price to be paid in cash and stock. oxford shares have risen 17% in the past month following a report in the “wall street journal” that said another company, wellchoice, was interested in making a purchase. unitedhealth says the acquisition will add to 2005 earnings and it expects to close the deal in the fourth quarter of this year. looking at how the stock or shares, rather, are doing in extended trade, down 36 cents. unitedhealth, oxford health shares showing a 42-cent gain, not quite 1%. o.s.i. pharmaceutical shares closed today at a record high. the stock more than doubled on news that its experimental tarceva drug prolongs the life of lung cancer patients. dr. colin goddard, chief executive of o.s.i. pharmaceuticals joins us in the studios. thanks for joining us on a busy day for you. we’re not going to get the details on the study until, i believe, the first week of june, the oncology conference in new orleans. but you’ve improved the survival rate―an emotional issue for cancer patients―you’ve improved the survival rate over the current standard. what’s the standard right now?
>> for these patients unfortunately there’s not many options because they’ve failed treatments.
>> sometimes called hopeless cases?
>> sometimes it’s revved to that way and what’s remarkable about the results and clearly attracted the interest of the street is here we have a drug that’s a targeted therapy, the first targeted therapy to show improvement in survival in lung cancer and the first e.g.f.r target therapy to show improvement in any disease setting. this particular study was done in advanced lung cancer patients which represents in many respects the highest possible hurdle. it’s a tremendous result and apart from all all else, wonderful results for lung cancer patients.
>> it’s a fascinating story because the company’s been unprofitable for years now and an explosion in the stock markets in terms of the price and market value today on the hopes that you’ll get the drug passed through the f.d.a. this summer. how confident are you that you can get this thing approved by this summer?
>> it won’t be by this summer. the time line for the drug will completely think the submission to the f.d.a. over the course of the summer and typically there’s a rapid review process for these drugs so we expect a six-month turnaround which would launch the product in the first quarter of 2005.
>> you’re obviously partners with genentech and roche, but as a company, s―o.s.i. only has 500 employees. you have to believe that with the liquidity you’ll hire new people. how many researchers are you looking for?
>> one of the things we’ve been able do in the four years we’ve been developing tarceva is patiently assemble the pieces of the puzzle into a fully capable biotechnology company so clearly we have the opportunity t add quality and expand across the board moving forward so it will be 100 to 200 over the next several years this is the second coming of the drug. less than a year ago you said it was a first line of attack in non-cell lung cancer and now it’s a second choice for patients with failed other treatments?
>> but the drug has a long way to go in first-line, as well. the first set of trials we tested the drug in combination with existing chemotherapy and we since realized that tarceva slows the growth of dividing cancer cells and chemotherapies generally kill dividing cells so there’s an offset there and we believe that the drug could have an important role to play in not only the front-line and first-line setting but the adjunkt setting for other options.
>> what is the eye-catching story of the day. stocks down, not huge decline, .5% for the record s&p, .6% for the nasdaq here today. we look at the volume on the big board, there it is and volume, 1.3 billion shares -- interest rate concerns overshadowed good earnings reports today. deb kostroun is at the big board with the latest from there.
>> as we started out the week, those concerns about interest rates really coming in once again, even though we had the really good home sales. we’ll get to how the housing stocks performed today. we saw all the major averages lower. however, energy, actually the best performer over the past month since the strong jobs report was released, energy stocks gaining on the day. falling in the s&p 500, energy was gaining even some of the tilt utility stocks performing well. technology and financials losing ground and in addition, as we talked about, the concerns about earnings. first-quarter earnings versus the fear of the interest rate hike, really the big story on the day. james mcgelwin with summit investment partners saying in the intermediate term, the strong corporate earnings will outweigh the risk of a rate hike and that earnings right now are so good that the fed feels it can raise rates, limiting the market advances. looking at homebuilders on the day, we had home sales coming in at a record pace. they closed just slightly higher. looking at individual stocks, you can see, however, coming off the lows of the day, we saw lennar, pulte, centex higher and toll brothers lower today. the big story, energy once again. concern about possible suicide bombers over the past weekend and how that may be disrupting crude oil shipment out of that region, out of iraq. that led to energy stocks higher. we saw chevron at a 52-week high, oil services also performing quite well. we talked about the financials, a little bit of a mixed market as we had the potential i.p.o. for google. that helping out some of the investment firms but many of the financials were a little bit lower. back to you in the studio.
>> pulte sees its full year up over a dollar and then we saw shares of boeing rallying today, the company announcing a $6 billion order, first of its kind for the new fuel-efficient plane. the initial order comes from japan’s all nippon airways and boeing expects further frrds europe by the end of the year and su keenan has details.
>> and the big question is how does this change the competitive picture. the 50-jet order from all nippon airways demonstrates the importance of boeing’s 7e7 and how it will play in the future. it’s called the dreamliner and it is the boeing company’s first new model in more than a decade. boeing expects orders from a large number of u.s., asian and middle eastern airlines to follow. looking at the share price, performance this week. shares rallied as much as 2% on the day as news of the initial $6 billion order for the airplane, formerly known as the 7e7, hits the tape. deliveries of the airliner will hit in 2008. boeing is staking its future on the plane, operating on 20% less fuel than the 757 and 767 models it replaces. boeing is locked in a competitive battle to regain ranking as the number one commercial aircraft maker after losing that spot last year to airbus. s.g. cowen’s aerospace analyst says the company faces challenges on its road back to becoming the industry leader.
>> the key issue today is will they be successful in getting a strong and broad order book with a lot of customers. the project looks like it’s dispensed before they deliver the plane and what impact will it have on the existing product line, specifically the 767, which it replaces.
>> he does not advise his clients to buy boeing shares at this time as he’s concerned the stock is too expensive relative to its peers.
>> the chief investment officer of pilgrim baxter joins us live next.
