Pfizer Pays Up

Announcing the details of an agreement it first revealed in January, Pfizer will pay $2.3 billion to settle a U.S. investigation into illegal marketing of medicines, and a subsidiary will plead guilty to criminal charges. The amount includes $1.3 billion to end the criminal part of the inquiry. Pharmacia & Upjohn, which Pfizer aquired in 2003, will admit to a felony charge of misbranding a pharmaceutical.

The settlement is the largest ever in the U.S. involving off-label marketing practices. The criminal case involves the off-label promotion of Bextra, a painkiller that Pfizer withdrew in 2005 because of its connection to a rare skin condition. Federal investigators examined marketing practices involving various other Pfizer drugs, and while the company denied almost all of the civil charges, its $1 billion payment to settle the civil cases includes $503 million involving Bextra, $301 million for the schizophrenia drug Geodon, and $98 million for the antibiotic Zyvox.

Source: Bloomberg

BP’s “Giant” Strike

The British energy giant says it has discovered an enormous field in the Gulf of Mexico. While the company wouldn’t formally estimate the size of the find, BP’s chief of exploration called the exploratory Tiber well “very significant” and said it was even “better” than the Kaskida field nearby, which is thought to contain 4 billion to 6 billion barrels.

Source: BusinessWeek

More Private-Sector Job Losses Than Expected

U.S. companies cut 298,000 jobs in August, more than economists expected, though the number was substantially below the 360,000 cut in July. Partly as a result of laying off so many workers, companies boosted labor productivity in the second quarter at a 6.6% annual rate, the fastest pace in almost six years. The government’s August labor report, which includes public-sector jobs, will be released on Friday.

Source: Bloomberg

The SEC: We Goofed

In a 22-page summary of a 450-page report due to be released on Friday, the Securities & Exchange Commission’s inspector general says that the agency ignored ”numerous and credible complaints” and failed to perform a “thorough and competent” investigation of Bernard Madoff. The complaints, notes the report, date back to 1992, and agency staff also ignored two critical media reports. The agency even caught Madoff in lies but overlooked them. “Even when Madoff’s statements were seemingly implausible, the SEC examiners accepted them at face value,” says the report.

Source: CNNMoney.com

The Cash-for-Clunkers Effect

Car companies said on Sept. 1 that their August sales soared to an annualized selling rate of about 14 million, thanks to the government’s clunkers program, which gave $3,500 to $4,500 to consumers trading in an old gas guzzler for something more efficient. The accelerated sales rate was a boon for carmakers, especially Ford (F), Toyota (TM), Honda (HMC), and Hyundai.

But the industry appears to be giving those gains back as the annualized rate has fallen to 8 million vehicles since Aug. 25, when the program stopped. “August was the best month of the year, but it’s possible that it could be followed by the worst month this year,” predicts Jeremy Anwyl, chief executive officer of Edmunds.com.

Source: BusinessWeek

World Economy Signals Improvement

Manufacturing gains in the U.S., Europe and Asia suggest the world economy will grow faster than expected. In the U.S. a purchasing managers’ index showed factory output grew for the first time since Jan. 2008 and China, France, and Australia also saw manufacturing expand in August. The International Monetary fund is now set to revise its 2010 global growth estimate upwards to just under 3%.

Source: Wall Street Journal

Labor Groups Target Wal-Mart

Labor groups led by the United Food and Commercial Workers union have launched a new campaign against Wal-Mart, pressuring the world’s largest retailer to improve wages, health care and environmental and labor policy. A key issue is Wal-Mart’s continuing opposition to the Employee Free Choice Act, a bill that would allow workers to more easily form unions.

Source: Washington Post

Khosla Raises $1.1 Billion for Green Energy

Silicon Valley venture capital firm Khosla Ventures has raised $1.1 billion to develop renewable energy technologies. This follows a disappointing first half of the year where green tech investment fell to $513 million, or just over one quarter of the $2 billion raised in the first six months of 2008, says PricewaterhouseCoopers.

Source: Los Angeles Times

Wells Fargo to Repay TARP Funds

Wells Fargo announced Tuesday it plans to repay TARP, or Troubled Asset Relief Program funds. Wells Fargo will be able to return the funds without raising new equity capital and diluting current investors, the San Francisco, Ca.-based bank said.

Source: Market Watch, Bloomberg

EBay’s Skype Sale Looks Like a Win-Win

In a deal announced Sept. 1, eBay will sell a controlling share of the Internet-calling service to a group of investors led by private equity firm Silver Lake for $1.9 billion in cash and $125 million in short-term debt. The sale values Skype at $2.75 billion, not far below the price eBay paid for the business in 2005, and higher than the value recently placed on Skype by some Wall Street analysts. At the same time, eBay retains a 35% stake in the high-growth business.

Source: BusinessWeek

Murky Media Advertising Outlook

The outlook for the $500 billion global advertising market is murky with ad executives and analysts divided on the possibility of a recovery. While a recent UBS report predicts a rebound in the beleaguered sector next year, others are less sanguine. “People feel better about life,” said WPP Group chief executive Martin Sorrell, “but that hasn’t extended, as we said at the end of the first quarter, to the checkbook or investment in branding.”

Source: New York Times