) is spinning off its famous Palo Alto Research Center on Jan. 1 and looking for equity partners to increase its research might. Xerox spokesman Bill McKee says the move is "another step in returning this company to profitability." While it is not the largest Xerox research center, PARC is certainly the best-known, with inventions ranging from the laser printer to the graphic user interface adopted by Apple Computer (AAPL
). But the center is renowned equally for developing many technologies on which Xerox failed to capitalize.
While some analysts question the appeal of investing in the 270-person PARC, Mc-Kee says that Xerox has spoken with more than 40 "seriously interested" partners and plans to retain a significant stake in the venture itself. The company's six other research centers will remain in-house. Bristol-Myers Squibb (BMY
) faces headaches on several fronts. On Dec. 12, a group of 29 states and Puerto Rico filed a lawsuit in the Southern District of New York alleging that the drugmaker improperly blocked generic competition to its anti-anxiety drug BuSpar. The suit contends Bristol made false statements to the Food & Drug Administration concerning a patent, a move the states say kept generics off the market for nearly four months. The suit comes as Wall Street is growing nervous that Bristol will have weaker-than-expected results next year, when a generic version of its blockbuster diabetes drug Glucophage is likely to hit the market. Hoping to spruce up its public image, the multibillionaire Pritzker family agreed to pay $460 million to federal regulators to resolve claims in the collapse of the Superior Bank, a defunct subprime lender it half-owned. The family, operators of the Hyatt chain, admitting no fault in the thrift's fall, put down an initial $100 million on Dec. 10. The rest is to be paid over 15 years at no interest. But the settlement doesn't end the fracas. The Pritzkers may pursue claims for damages against former partner Alvin Dworman, a New York developer they blame for the thrift's demise. And regulators may pursue auditor Ernst & Young, as long as the Pritzkers receive 25% of any resolution amount, under a deal the family made with the feds. Merck (MRK
) is ailing. On Dec. 11, the drugmaker dropped a bombshell when it said that its 2002 earnings would be flat instead of the 8% gain Wall Street was expecting (BW--Dec. 17). The news sent Merck stock down 9.4%, to $60.70. The disappointment stems from looming generic competition to key drugs and weaker-than-expected sales for Vioxx, its arthritis drug. Vioxx growth has stalled in the wake of concerns about cardiovascular side effects. American Express (AXP
) said on Dec. 12 it would slash up to 6,500 more jobs and take a $240 million to $280 million charge in the fourth quarter to cover the cost of consolidating and severance. The latest layoffs are in addition to 7,700 earlier job cuts. It brings the company's total job cuts this year to 15% of its workforce. American Express has been hard-hit by the decline in travel since September 11, and the stock closed Dec. 12 at $33.42, off 2.45%. Analysts say that the company's woes aren't over and that it may have to take more charges in 2002. The latest restructuring steps are expected to save AmEx about $230 million to $260 million next year. -- A federal judge has dismissed lawsuits alleging Ford (F
) misled investors about the safety of the Explorer SUV.
-- Nestl? (NSRGY
) acquired Ralston Purina in a $10.3 billion deal.
-- Sotheby's may be put up for sale following the price-fixing conviction of Chairman A. Alfred Taubman. Kroger's (KR
) Dec. 11 announcement that it would lay off 1,500 employees and cut $500 million in costs sent the stock of one of the nation's largest grocers down 14.5%, to $19.92. Kroger also said that its strategy to offer
consumers lower prices will reduce its earnings over the next two years.