WASHINGTON (AP) — The blockbuster drug Avastin should no longer be used in advanced breast cancer patients because there's no proof that it extends their lives or even provides enough temporary benefit to outweigh its dangerous side effects, the government declared Friday.

The ruling by the Food and Drug Administration was long expected, but it was certain to disappoint women who say they've run out of other options as their breast cancer spread through their bodies. Impassioned patients had lobbied furiously to preserve Avastin as a last shot.

But repeated studies found the drug had only a small effect on tumor growth. The research didn't show evidence that patients lived any longer or had a better quality of life than if they had taken standard chemotherapy. The FDA concluded that the drug presented an array of risks, including severe high blood pressure, massive bleeding, heart attack or heart failure, along with perforations in the stomach and intestines.

"I did not come to this decision lightly," said the FDA commissioner, Dr. Margaret Hamburg. But, she said, "Sometimes despite the hopes of investigators, patients, industry and even the FDA itself, the results of rigorous testing can be disappointing."

Avastin is the world's best-selling cancer drug, and also is used to treat certain forms of colon, lung, kidney and brain cancers. So even though FDA formally revoked its approval of the drug to treat breast cancer, doctors still could prescribe it — but insurers may not pay for it. Including infusion fees, a year's treatment with Avastin can cost $100,000.

Some insurers already had quit covering the drug's use in breast cancer after FDA's advisers twice — once last year and once this summer — urged revoking the approval.

But Medicare said Friday that it will keep paying for now. In a statement, the agency said it "will monitor the issue and evaluate coverage options as a result of action by the FDA but has no immediate plans to change coverage policies."

Hamburg said any woman wishing to remain on Avastin should have an in-depth discussion with her doctor about the risks and what the research into the drug showed.

Avastin manufacturer Genentech, part of Swiss drugmaker Roche Group, had argued that the drug should remain available while it conducted more research to see if certain subsets of breast cancer patients might benefit, perhaps people whose tumors contain certain genetic characteristics. After all, some doctors had argued that they do see a few patients who seem to do better with Avastin than without it.

Hamburg said she considered that argument, but that scientifically there are no clues yet to identify such women. She urged Genentech to do that research, saying FDA "absolutely" would reconsider if the company could find the right evidence."

"We're eager to work with the company, and we hope that the science will advance and that we will be able to offer patients with metastatic breast cancer better, safer, more effective treatments for this devastating disease," Hamburg said.

Genentech pledged to begin such research.

"We are disappointed with the outcome. We remain committed to the many women with this incurable disease and will continue to provide help through our patient support programs to those who may be facing obstacles to receiving their treatment in the United States," said company chief medical officer Dr. Hal Barron.

One patient advocacy group called the decision a mistake.

"Any one life is significant. In this case we're talking about several thousand lives a year," said Frank Burroughs of the Abigail Alliance, which advocates for access to experimental medicine.

In 2008, the FDA allowed Avastin to be marketed as a treatment for breast cancer that has spread, or metastasized, to other parts of the body and is generally considered incurable. The approval came under a special program that allows patients access to promising treatments while their makers finish the studies needed for final proof that they really work as promised. That approval is revoked if the research doesn't pan out, something that happens only very rarely.

___

Associated Press Writer Marley Seaman in New York contributed to this report.

View the original article here

Read More

(Reuters) - The California attorney general's office has sent subpoenas to Fannie Ma e and Freddie Mac in a wide-reaching probe into the government-backed mortgage giants' lending and foreclosure practices, the Los Angeles Times reported Thursday.

The subpoenas are seeking information about how Fannie and Freddie are handling thousands of foreclosed properties, as well as details about their mortgage-servicing and home-repossession practices, the LA Times reported, citing sources families with the matter.

California regulators are also investigating how Fannie and Freddie bought and sponsored securities holding toxic mortgages, and how their activities might have contributed to the wave of foreclosures in California, the sources told the LA Times.

A spokesman for California Attorney General Kamla Harris, Shum Preston, said he could neither confirm nor deny the report. Representatives for Fannie and Freddie were not immediately available for comment.

Recently, Harris has called on Fannie and Freddie to cut mortgage debt on the loans they own, in an attempt to help beleaguered California homeowners keep their homes. Fannie and Freddie have long resisted such a move.

"It has become clear to me that the only way to keep distressed California homeowners in their homes is through meaningful principal reduction," attorney general Kamala Harris said in a statement on November 3.

The two companies have been propped up with about $145 billion in taxpayer support since they were seized by the government and placed into conservatorship in September 2008.

California has faced some of the worst default rates in the country in the wake of the foreclosure crisis, with two million residents who owe more on their mortgage than their home is worth.

(Reporting by Jessica Dye, editing by Bernard Orr)

View the original article here

Read More

TOKYO (Reuters) - Japan's big manufacturers led by Panasonic Corp and Nissan Motor Co Ltd are speeding up their shift overseas, in a sign corporate Japan sees the strong yen as a long-term handicap rather than a temporary blip.

A sluggish home market and energy shortages following the widespread nuclear power shutdown sparked by the March 11 earthquake and ensuing atomic crisis are also tipping the balance toward investment abroad.

Panasonic is planning its first solar factory outside Japan, sources said on Friday, while Suzuki Motor Corp said it was seeking to double auto production at its joint venture in China by 2015.

Rival automakers Toyota Motor Corp and Nissan also said on Thursday that exchange rates were forcing them to consider changes in their own production plans.

"I think we are reaching the limit for manufacturing in Japan," said Yuuki Sakurai, president of Fukoku Asset Management in Tokyo.

"In future, companies may be registered in Japan and have their head office here, but it could be that most people they employ are not Japanese and most of their production doesn't take place in Japan."

The Japanese currency was trading at about 77 yen to the dollar on Friday, compared with levels around 90 yen two years ago.

The euro has tumbled to about 104 yen, compared with about 134 yen in November 2009, slashing the value of overseas revenues brought home to Japan by export-reliant firms. Manufacturers say there is little prospect of increasing procurement in euros to offset the pain.

Panasonic, for example, has said the strong yen will cut annual operating profit by 28 billion yen ($363 million) this year.

Panasonic's new solar plant in Malaysia is set to cost 40-50 billion yen, according to sources, with news of the investment coming just weeks after the firm revealed it was dropping a plan to convert a TV panel plant in Japan for solar panel production.

Shares in Panasonic fell 0.9 percent to 686 yen on Friday, compared with a 1.2 percent fall in the Nikkei average.

"We were considering increasing solar production capacity by converting our No. 3 panel plant," Panasonic President Fumio Ohtsubo told a news conference last month.

"But there was no reason for an aggressive expansion at this plant, given that the exchange rate situation is completely different from two years ago, and that we have grave concerns about power shortages," he added. "All things considered, there is more merit to manufacturing overseas than in Japan."

NEW POWER GENERATION

Mandatory peak usage cuts this summer on large customers of power companies Tokyo Electric Power Co, the operator of the crippled nuclear plant in Fukushima, and Tohoku Electric Power Co forced many companies to invest in their own power generation equipment and adjust working shifts.

The government has said power should suffice for the winter, despite the lack of active nuclear capacity, but admits a bigger challenge looms in summer next year.

Nissan Chief Executive Carlos Ghosn called for fixed exchange rates in a speech in New York, at which he also said the company may be forced to shift more of its manufacturing overseas.

"We need just one thing," Ghosn told the Japan Society in New York. "Fix the exchange rate. Fix it."

The yen's strength has raised questions about the rationale of rival Toyota's commitment to producing at least 3 million cars in Japan each year and President Akio Toyoda said on Thursday the company may need to "deepen alliances" to tackle the problem.

Fukoku's Sakurai said even Toyota could find it itself struggling to fulfill what it has long seen as an obligation to maintain employment in Japan.

"Rival companies are spreading their production, and in this day and age, how far can they stick to an obligation like that?" he said.

Shares in Nissan fell 2.5 percent, Toyota closed down 2.3 percent and Suzuki dropped 2.7 percent on Friday.

Camera and printer-maker Canon Inc is among the few major Japanese firms saying it will not change its production strategy drastically because of the high yen, instead relying on increased automation to cut costs at its domestic plants.

But chief financial officer Toshizo Tanaka said in an interview last month he had changed his earlier view that the yen's strength would be short-lived.

"I think rates may stay as they are for quite a while against both the euro and the dollar," he said. "What is happening in Europe is not a cyclical downturn but structural, a financial crisis, so it will take a long time to recover." ($1 = 76.985 Japanese Yen)

(Additional reporting by Reiji Murai; Editing by Joseph Radford)

View the original article here

Read More

ATHERTON, Calif./LOS ANGELES (Reuters) - Fisker Automotive is on track to meet production goals for its electric sports cars in 2012 despite production delays that have sharply reduced the start-up carmaker's projected deliveries this year.

Production of Fisker's first vehicle, the plug-in hybrid Karma, was held up by faulty electrical harnesses and headlights, topped off by a flood that damaged the leather for its interior, according to Chairman Ray Lane.

"In production of a first vehicle, everything doesn't go the way you plan," Lane said in a recent interview. "Next year, we'll do exactly what we plan."

Fisker has long said it plans to sell 15,000 Karmas next year. But a spokesman later clarified the target was now 10,000 to 12,000.

Some in the industry have questioned whether the vehicle's price tag -- which starts at $96,000 -- will make that goal unattainable in a weak economy.

Fisker's fortunes have come under increased scrutiny in the two months since U.S. solar panel maker Solyndra filed for bankruptcy after securing a $535 million federal loan guarantee. Fisker itself received $529 million in loans from the U.S. Department of Energy under a program similar to the one that funded Solyndra's factory.

Lane's comments come more than a week after Fisker battery supplier A123 Systems Inc cut its 2011 revenue outlook 20 percent, blaming a sharp cut in fourth-quarter orders from Fisker. A123 would not say by how much orders were cut back, and Fisker had no comment on the delays at the time.

Lane, however, said Fisker would deliver 1,500 cars this year -- a lot fewer than the 7,000 vehicles the company said it would sell this year when it began production of the Karma in Finland in March.

The company is currently building about 150 vehicles a week, Lane said.

The major delays, according to Lane, stemmed from faulty electrical harnesses and headlights. The final straw, however, came when leather for the vehicle's interior was damaged in a flood.

"The leather was useless. We had 250 cars parked and waiting for leather," Lane said.

Fisker's Scottish leather supplier, Bridge of Weir Leather Co Ltd, was not available to comment.

Fisker delivered its first Karma to actor Leonardo DiCaprio over the summer. Lane, a managing partner at venture capital firm and Fisker investor Kleiner Perkins Caufield & Byers, was the recipient of the company's second production vehicle [ID:nN1E76P2DY].

Lane has driven his Karma to work almost daily since July and said he has not yet had to fill up the gasoline engine. The Karma is a plug-in hybrid that can run for 32 miles before needing to be recharged. It also has a gasoline engine as a backup for when the battery runs out of charge.

Last week, A123 said it expected battery pack orders from Fisker to stay low through the first quarter of 2012, picking up in the second quarter and increasing throughout the year.

A123's expectations for Fisker's 2012 production are below the automaker's own.

"We are taking a reduced number from the 15,000 into our financial plan," A123 Chief Executive Dave Vieau said during an investor presentation in September, before the company reduced its revenue outlook.

Rather, Vieau said A123 was relying on 2012 sales projections from industry data firms J.D. Power and CSM, which he said ranged from about 5,000 to about 7,000 vehicles.

(Reporting by Sarah McBride and Nichola Groom; Editing by Maureen Bavdek)

This corrects November 15 story's projection in fourth paragraph to clarify production of Karma models will be in the 10,000 to 12,000 range and not 15,000

View the original article here

Read More

LONDON (Reuters)- In some cultures, the number 7 is mystical and magical; in the euro zone, it's a Mayday call. Yields on the bonds of two of the currency bloc's largest economies -- Italy and Spain -- were either at or within a whisker of 7 percent in the past week, creating huge concern about future funding and prompting …

View the original article here

Read More

PORTLAND, Ore. (AP) — H.J. Heinz Co knows that every penny counts in this economy.

The world's biggest ketchup maker's second-quarter profit fell yet narrowly beat expectations on an adjusted basis Friday as it focused on fast-growing emerging markets. But in struggling developed markets such as the U.S. and Europe, the company is shrinking product sizes and selling lower-priced products such as ketchup for 99 cents and beans for around a dollar to appeal to budget-stretched shoppers.

Heinz also announced plans to close three more plants — not identified yet — as it tries to keep its own costs under tighter control.

Consumers are struggling with continued pressure from high unemployment and food costs. As a result, many people are living paycheck to paycheck buying only what they can afford rather than bigger bottles or cans of food that might be more cost-effective.

Heinz said to meet consumer's needs, it is selling pouches instead of bottles of some of its condiments, reintroducing bean products to the U.S. and selling a bag of french fries for family dinners at $1.99.

In Europe, it will soon sell baby food around 1 euro and give free packs of its popular beans and soup to customers who buy four other cans of its products in the U.K., one of the areas hardest hit by the global economic woes.

Compelling price points seem to be best way to connect with today's concerned consumer, Heinz Chairman, President and CEO William R. Johnson said Friday.

"Consumer confidence declined in virtually every market we operate in in the developed world last quarter. It went up in the developing world, where we are really focusing a lot of our efforts," he said.

Heinz's fiscal second-quarter net income fell almost 6 percent as strength in emerging markets and higher prices offset a volume decline.

The company raised prices more than 4 percent to offset higher costs for ingredients and other commodities, which the entire industry is facing. However, as many companies beginning to see, those price hikes can scare away some of the most cost-conscious shoppers and hurt sales volume.

The company also struggled with softer sales in Australia where intense discounting, competition and other issues remain a challenge for the company

Heinz's sales volume fell nearly 3 percent in the quarter. While its sold roughly 2 percent fewer products in the U.S. and Europe and nearly 5 percent less in the Asia-Pacific region due to troubles in Australia, the company saw sales volume jump nearly 6 percent in the rest of the world.

Heinz has already shifted its focus to other markets such as China, Russia and Indonesia as developed markets drag along and these new markets represent an appealing opportunity with their booming population and strong appetite for new products.

Emerging markets were the company's growth engine for the period as it sold more ketchup and sauces in China, ABC soy and chili sauces in Indonesia and Complan nutritional beverages in India.

Heinz reported that its net income fell to $237 million, or 73 cents per share, for the fiscal quarter versus $251.4 million, or 78 cents per share, a year ago. Excluding one-time items related to productivity initiatives, its earned 81 cents per share. That beat the 80 cents per share that analysts surveyed by FactSet expected.

Revenue rose 8 percent to $2.83 billion from $2.61 billion a year ago, but still fell short of analysts' expectations of $2.9 billion.

Heinz, which had already announced plans to improve efficiency, close five plants and shed up to 1,000 jobs globally in fiscal 2012, said Friday that it would close more plants to cope with the difficult operating environment.

The company plans to shut three more of its 80 plants worldwide. The exact locations were not selected yet. As a result, it is eliminating an additional 1,000 jobs.

The Pittsburgh-based company said that despite larger economic challenges, it is on track to meet its financial goals for the year and reiterated its fiscal 2012 earnings guidance, excluding one-time items, of $3.24 to $3.32 per share. Analysts expect $3.34 per share.

Investors appeared to be unsettled by the revenue miss, modest outlook and ongoing struggles with higher costs and developed markets, sending the company's shares down $1.79, or 3.4 percent, to $51.03 in midday trading.

____

AP Business Writer Mae Anderson contributed to this report from New York.

View the original article here

Read More

(Reuters) - Standard & Poor's plans to update its credit ratings for the world's 30 biggest banks within three weeks and may well mete out a few downgrades in the process, possibly surprising battered global bond markets.

Among the institutions that could be downgraded are Bank of America Corp , Citigroup Inc and Morgan Stanley , said Baylor Lancaster, an analyst at CreditSights Inc.

Spokesmen for the three banks declined to comment.

Some European banks could also be affected. On November 9, S&P downgraded its scores for the health of the banking industries in a number of countries, including Denmark, Sweden, Finland and the Netherlands.

The updates in ratings are part of a major overhaul of S&P's methods for scoring the creditworthiness of some 750 banking groups.

The agency, the subject of intense criticism because its positive ratings for mortgage-backed securities played a major role in inflating the housing bubble, has been working on the changes for more than a year.

The updates are part of a broad push by S&P to improve its products and repair its reputation as its parent, McGraw-Hill Cos Inc , divides itself into two publicly traded companies.

S&P has taken pains to prepare the markets for the changes, but when it actually releases results for individual banks some downgrades could surprise, analysts say.

"One reason there could be surprises is that the new ratings method is very complex and it has been very difficult to simulate results," said Beate Muenstermann, a London-based research analyst for the money management arm of JPMorgan Chase & Co.

One area for potential surprise lies in differences between actions the agency may take on bank holding companies compared with grades for their operating units. Another is variations between long-term and short-term ratings.

S&P posted an advance notice of the coming changes in March 2010 and in January 2011 outlined its initial plans and requested comments.

Earlier this month the agency published its final criteria and said it expects 60 percent of all bank ratings to stay as they are, while 20 percent will go up one notch, 15 percent will fall by one notch and less than 5 percent will drop by two or more notches. One notch is one-third of a letter grade -- for example, the difference between a rating of "A" and a rating of "A-minus."

S&P has not said what proportion of downgrades it expects among only the biggest banks. It has said to expect regional differences in the results for all banks. Western Europe fared worse than Latin America and Asia in the November 9 changes in scores for banking industries by country.

S&P estimated in January that there would be more downgrades, but the agency lowered some ratings while the plan was being completed and also eased some of the criteria.

The agency plans to first announce its results for the 30 biggest banks, possibly as early as late this month, and then begin quickly rolling out its ratings for smaller banks.

The agency has been discussing the often-arcane mechanics of the new methodology with banks and institutional investors and has posted explanations and tutorials on public pages of its website:

mid=1245321770467#> "S&P has been extremely good at guiding the market through this change in the methodology," said Muenstermann.

How the changes are perceived by regulators could prove to more important to S&P than to the markets. Bond fund managers say the market has probably already priced in the information underlying S&P's research and judgments.

"The rating agencies tend to be laggards compared with prices," said Ryan Brist, a portfolio manager at Western Asset Management.

S&Ps changes may even foretell a coming upturn for banks, he said. "Historically, ratings agencies tend to change their methodologies after large downward price movements in the market."

John Croft, a portfolio manager and director of investment grade research at Eaton Vance, said, "They seem to be fiddling around with their methodologies more than opining about the underlying credit strength of issuers."

Still, Croft gives the agency credit for trying to do better than in the past. Past ratings proved too high on such financial companies as Lehman Brothers, ABN AMRO and Wachovia, which either failed outright or were forced into mergers with stronger rivals.

"They are trying to rectify some of the problems that they have had in the past and to the extent that they do that, it is good," said Croft.

The agency's performance is under scrutiny from regulators, who are designing ways to reduce the power and profits from the ratings business now enjoyed by S&P and its main competitor, Moody's Corp .

S&P made matters worse last week when its computer systems accidentally sent a note to some customers suggesting that the credit rating of the Republic of France had been downgraded in the midst of the European debt crisis.

S&P said later the error stemmed from a computer programing

step it had taken last December with the banking industry country scores used in the first step of its new ratings method.

(Reporting by David Henry in New York; Editing by Steve Orlofsky)

View the original article here

Read More