WSJ : Actelion Began in a Garage—Now Its Founding Couple Has $1 Billion and a Ne

Actelion Began in a Garage—Now Its Founding Couple Has $1 Billion and a New Biotech Firm
Husband and wife team sold their Swiss company to the U.S. drugmaker in an unusual $30 billion deal

Jean-Paul and Martine Clozel had to sell their house and work out of a rented garage when they started biotech company Actelion Ltd.
Twenty years later, after selling the Swiss company to Johnson & Johnson in an unusual, $30 billion deal, the husband-and-wife team is starting over again. They are embarking on the creation of a new global biotech player—armed with nearly $1 billion in capital, a deep-pocketed partner in J&J and soon, a stock listing in Zurich.

Dr. Clozel, 61 years old, is slated to walk away with about $1.5 billion for his 5% stake in Actelion. Johnson & Johnson persuaded him to sell only after agreeing to let him strip out Actelion’s early-stage research and development to form a separate company.


The U.S. health-care giant, eager to replenish its pipeline as some top-selling drugs face competition from cheaper competitors, was willing to pay a hefty price tag. That, and its agreement to the unorthodox deal structure, cleared a hurdle that tripped up previous Actelion suitors: Dr. Clozel’s well-telegraphed reluctance to give up his independence over years of deal speculation.

“My first reaction to J&J was that I didn’t want to sell,” Dr. Clozel said in an interview. He now will become chief executive of the new firm, which doesn’t yet have a name. Along with his wife, Actelion’s chief scientific officer, he will be free to pursue research that spans insomnia, lupus and neurological diseases.

Johnson & Johnson will hold on to a 16% stake in the new firm, with an option to double that. The rest will be spun off later this year to existing Actelion shareholders, giving Dr. Clozel a 4.2% stake. Johnson & Johnson is expected to provide more detail on the portfolio in a prospectus for the new company in coming weeks.

“We know they know how to develop and market drugs,” said Daniel Koller, lead manager at BB Biotech, a longtime investor in Actelion.

The biotech industry is a key player in the global pharmaceuticals industry. These research-focused drug-discovery companies blossomed amid a wave of genetic-engineering advances in the 1970s and ’80s. They tend to stay small and nimble, marketing only a few drugs they develop, or selling promising drugs to bigger companies.

But some have grown into pharmaceutical giants in their own right. Actelion is Europe’s biggest by market capitalization, but it is dwarfed by the likes of Amgen Inc. and Gilead Sciences Inc. of the U.S.

Johnson & Johnson first approached Actelion in January of last year. At first, the two companies discussed collaborating, but J&J then said it wanted to buy Actelion, according to a J&J filing last month.

Negotiations stumbled on price. Actelion Chairman Jean-Pierre Garnier broached the idea of a spinoff. In November, the two sides disclosed talks.


French company Sanofi SA jumped in the following month, The Wall Street Journal reported. Sanofi, referred to only as “company A” in J&J’s filing, offered a higher price. J&J wouldn’t match it. Then, Sanofi went back on its offer price, according to the filing, and Actelion turned back to J&J, which clinched the deal in January.

Sanofi declined to comment.

Dr. Clozel, a cardiologist, and his wife, Martine, a pediatrician and also 61, met as medical students in France in 1975. They both joined Roche Holding AG about a decade later and ended up working on cardiovascular drugs.

Dr. Clozel said he became disillusioned in the mid-1990s, when he said the company pushed scientists to concentrate on specific diseases, instead of taking their research in whichever application seemed most promising.

Jonathan Knowles, Roche’s former head of research and development, said the Clozels’ program didn’t fit the company’s strategy at the time because it didn’t cater to common conditions such as high blood pressure. A Roche spokesman declined to comment on the company’s past strategy but said that today its scientists “have a lot of freedom to pursue their own projects.”

In 1997, the Clozels quit their jobs at the Swiss drug giant to set up Actelion in the rented garage in Allschwil, Switzerland, with two former Roche co-workers. The Clozels sold their house to contribute funding.

FT : Rio Tinto delays bonuses to former chief over Guinea affair

Rio Tinto delays bonuses to former chief over Guinea affair
Sam Walsh will not receive awards due to him amid inquiries into questionable payment

Rio Tinto has delayed the release of bonuses potentially worth millions to former chief executive Sam Walsh until law enforcement authorities have reviewed a questionable payment made to a consultant who helped the mining company secure rights to an iron ore deposit in Africa.

In November, Rio notified authorities in the US, UK and Australia about the $10.5m payment in 2011 to François Polge de Combret, a French consultant who assisted the company in reaching a settlement with Guinea over Simandou, one of the world’s biggest untapped deposits of iron ore.

The Anglo-Australian group faces the risk of large regulatory fines if it is found to have broken anti-corruption laws. 

In its 2016 annual report published on Thursday, Rio said it had reached an agreement with Mr Walsh, who retired in July, to delay for at least two years cash and share payments due to him under short and long term performance-based incentive plans.

“The payment of any of these awards is contingent on there being no information in connection with the Simandou matter which would justify [Rio’s] remuneration committee making a determination to cancel, defer or reduce these awards,” it added.

Under the agreement between Rio and Mr Walsh, in 2018 he is due to receive half of the cash and share bonuses he would have been given for last year under a short-term bonus scheme.

Also in 2018, he is set to receive 50 per cent of the shares awarded to him under a long-term incentive plan since 2013.

Then in 2020, he is meant to receive the remainder of the cash and shares due to him under both the short and long-term schemes.

“The board has determined that it would be inappropriate, while investigations are ongoing, to make any determination about Sam Walsh, our former chief executive, or about his outstanding remuneration,” said Rio in the annual report.

Mr Walsh could not immediately be reached for comment.

The company has not said why it reported the $10.5m payment to Mr de Combret to the authorities, but leaked emails from 2011 that were posted online in August showed Rio executives discussing the fee and the consultant’s “closeness” to Alpha Condé, Guinea’s president.

One of those managers was Mr Walsh, who was Rio chief executive between 2013 and July 2016. Another was Alan Davies, the head of energy and minerals who was previously in charge of Simandou.

Mr Davies was fired in November, along with Debra Valentine, Rio’s head of legal.

Jan du Plessis, Rio’s chairman, said in the annual report that the outcome of regulatory investigations into the payment to Mr de Combret was “uncertain”.

He added “we are continuing to co-operate fully with the relevant authorities”.

Rio has been involved in several fierce legal battles since it began exploring the Simandou deposit about 20 years ago.

It lost half the rights to the project in 2008 and only managed to hold on to the remainder in 2011 through a $700m payment to the then new government of Mr Condé: a deal which, the leaked emails indicated, Mr de Combret helped to facilitate.

Rio’s annual report also disclosed Mr Davies and Ms Valentine had been stripped of all their outstanding share awards.

Mr Davies said last year he was considering legal action against Rio following his dismissal. Ms Valentine has not commented since her departure.

>>> European Commission Presents Five Scenarios For The Future Of Europe

Full doc attached

On Wednesday, Jean-Claude Juncker's European Commission released a "White Paper On the Future Of Europe" which comes at a time of extensive tensions with the departing UK, and which lays out what Juncker believe are the "main challenges and opportunities for Europe in
the coming decade." It presents five scenarios for how the Union could
evolve by 2025 depending on how it chooses to respond. The paper comes as Europe prepares to celebreate the 60th anniversary of the EU a period which the commission calls a period of "peace spanning seven decades and on an enlarged Union of 500 million citizens living in freedom in one of the world's most prosperous economies", although one look at the unemployment chart of Europe's Under-25 may prompt some to wonder just how prosperous said economy truly is.
Some more details from the paper which has been prepared in advance of the 60th anniversary of the Treaties of Rome on March 25, 2017, and which will "serve to steer the debate among the 27 Heads of State or Government and help structure the discussion at the Rome Summit and well beyond" and will also be used by the Commission as the starting point for a wider public debate on the future of Europe.


The White Paper looks at how Europe will change in the next decade, from the impact of new technologies on society and jobs, to doubts about globalisation, security concerns and the rise of populism. It spells out the choice we face: being swept along by those trends, or embracing them and seizing the new opportunities they bring. Europe's population and economic weight is falling as other parts of the world grow. By 2060, none of our Member States will account for even 1% of the world's population – a compelling reason for sticking together to achieve more. A positive global force, Europe's prosperity will continue to depend on its openness and strong links with its partners.
The White Paper sets out five scenarios, each offering a glimpse into the potential state of the Union by 2025 depending on the choices Europe will make (see Annex). The scenarios cover a range of possibilities and are illustrative in nature. They are neither mutually exclusive, nor exhaustive.
Scenario 1: Carrying On - The EU27 focuses on delivering its positive reform agenda in the spirit of the Commission's New Start for Europe from 2014 and of the Bratislava Declaration agreed by all 27 Member States in 2016. By 2025 this could mean:
  • Europeans can drive automated and connected cars but can encounter problems when crossing borders as some legal and technical obstacles persist.
  • Europeans mostly travel across borders without having to stop for checks. Reinforced security controls mean having to arrive at airports and train stations well in advance of departure.
Scenario 2: Nothing but the Single Market – The EU27 is gradually re-centred on the single market as the 27 Member States are not able to find common ground on an increasing number of policy areas. By 2025 this could mean:
  • Crossing borders for business or tourism becomes difficult due to regular checks. Finding a job abroad is harder and the transfer of pension rights to another country not guaranteed. Those falling ill abroad face expensive medical bills.
  • Europeans are reluctant to use connected cars due to the absence of EU-wide rules and technical standards.
Scenario 3: Those Who Want More Do More – The EU27 proceeds as today but allows willing Member States to do more together in specific areas such as defence, internal security or social matters. One or several "coalitions of the willing" emerge. By 2025 this could mean that:
  • 15 Member States set up a police and magistrates corps to tackle cross-border criminal activities. Security information is immediately exchanged as national databases are fully interconnected.
  • Connected cars are used widely in 12 Member States which have agreed to harmonise their liability rules and technical standards.
Scenario 4: Doing Less More Efficiently - The EU27 focuses on delivering more and faster in selected policy areas, while doing less where it is perceived not to have an added value. Attention and limited resources are focused on selected policy areas. By 2025 this could mean
  • A European Telecoms Authority will have the power to free up frequencies for cross-border communication services, such as the ones used by connected cars. It will also protect the rights of mobile and Internet users wherever they are in the EU.
  • A new European Counter-terrorism Agency helps to deter and prevent serious attacks through a systematic tracking and flagging of suspects.
Scenario 5: Doing Much More Together – Member States decide to share more power, resources and decision-making across the board. Decisions are agreed faster at European level and rapidly enforced. By 2025 this could mean:
  • Europeans who want to complain about a proposed EU-funded wind turbine project in their local area cannot reach the responsible authority as they are told to contact the competent European authorities.
  • Connected cars drive seamlessly across Europe as clear EU-wide rules exist. Drivers can rely on an EU agency to enforce the rules.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: AUPH +67.1%, VRML +20.9%, MNST +13.1%, ALQA +12.7%, BLDP+8.5%, HIIQ +8.4%, JD +7.7%, GKOS +7.1%, CWST +6.9%, EXAS +6.1%, ANW+5.3%, AVGO +5.1%, PEIX +4.2%, WTI +4.2%, GERN +3.8%, TTM +3.3%, BURL+3.2%, EPE +3.1%, ALIM +3%, HDSN +2.4%, ANF +2.3%, ASM +2.3%, WSR +2.1%,AJRD +1.9%, SQ +1.6%, BBRY +1.6%, VRX +1.1%, JCAP +1.1%, BHP +0.9%, FGEN +0.8%

Gapping down: SSI -34.5%, PBYI -29%, AXTI -12.7%, TDOC -10.5%, MEI -9.8%,ARES -9.1%, RTRX -8.3%, PSTG -6.9%, JUNO -6.8%, JUNO -6.8%, AHP -6.7%,PLNT -5.7%, PDLI -5.7%, OPK -5.6%, KITE -5%, NKTR -4.8%, SHAK -4%, BUD-3.9%, ADPT -3.8%, HMY -3.5%, MTL -3%, AG -3%, VGR -2.9%, CIO -2.8%, SAN-2.1%, GDX -1.7%, PRTK -1.7%, GFI -1.6%, AU -1.5%, PBR -1.5%, ABX -1.5%,SLW -1.4%, NVS -1.4%, FSIC -1.4%, NEM -1.3%, ATHM -1.3%, GCP -1.3%, PRGO-1.2%, GOLD -1.2%, PFMT -1.1%, AKS -1%, KIN -1%

>>> Kroger beats by $0.01, beats on revs with comps below ests; guides FY18 EPS

--> +1% in pre open only 8k shares traded 32.35/32.40 vs 32.06

Kroger beats by $0.01, beats on revs with comps below ests; guides FY18 EPS in-line (32.06)
  • Reports Q4 (Jan) earnings of $0.53 per share, $0.01 better than the Capital IQ Consensus of $0.52; revenues rose 5.5% year/year to $27.61 bln vs the $27.31 bln Capital IQ Consensus.
    • Identical supermarket sales, without fuel, of -0.7% in the fourth quarter vs. 'slightly positive' guidance
    • Gross margin was 22.2% of sales for the fourth quarter. Excluding fuel, recent mergers and the LIFO charge, gross margin decreased 22 basis points from the same period last year.
  • Co issues in-line guidance for FY18, sees EPS of $2.21-2.25 vs. $2.23 Capital IQ Consensus Estimate. Kroger anticipates identical supermarket sales, excluding fuel, to range from flat to 1% growth for 2017, just below estimates. Kroger expects the operating environment in the first half of 2017 to be similar to the second half of 2016. The company's results in the second half of 2017 are expected to show improvement as the company cycles the previous year. The company expects capital investments, excluding mergers, acquisitions and purchases of leased facilities, to be in the $3.2 to $3.5 billion range for 2017.
  • Over the long term, Kroger is committed to achieving a net earnings per diluted share growth rate of 8 -- 11%, plus a growing dividend

>>> Hedge funds and their interest in Latin America

Full Article - http://bit.ly/2mcUqgD

By attracting record sums of investment from hedge funds, Latin America seems to be defying the idea that Donald Trump would be a catastrophe for emerging markets, particularly those to his immediate south.
In 2016, Latin America was the biggest contributor to overall hedge fund returns than anywhere else with a gain of 27.2%.
And at the beginning of this year – as the HFRI Latin America index gained another 6.4% in January – Latin America continued to lead record flows to emerging market hedge funds, along with Russia.
Russia has been courted by Trump; Mexico defamed by him. Yet hedge fund interest in Latin America has even extended to Mexico, with at least one fund investing beyond Brazil, the region’s biggest magnet for capital.
London-based Altavista Investment Management sifted through Mexican stocks in the aftermath of the Trump election when the Mexican currency and equity markets corrected significantly on “concerns of increased protectionism and anti-Mexican rhetoric”, said Vinod Nair, who co-founded the firm in 2010.
Looking for stocks with attractive internal rates of return, Altavista found Walmex, a leading food retailer in Mexico and which Nair described as a consistent share gainer.
“Food retailers are less sensitive to the economy and tend to benefit from inflation, which is a likely consequence of the currency devaluation. The correction afforded us a chance to buy a best-in-class business at a discount,” Nair said.
At least it shows that Latin America is attracting hedge funds for ‘long’ opportunities. Hedge funds may like volatility, but at least they are not after putting a ‘big short’ on Latin America.
Kenneth J. Heinz, president at HFR which compiles hedge fund indices, told Funds Europe: “Capital inflows into Latin American-focused hedge funds are not indicative of investor expectations for Latin America’s market decline. Hedge fund investors are generally constructive on the market areas of focus in which they invest.
“However, they also understand opportunities can be created through volatility and periodic pullbacks [in various asset classes] and by combining these in hedged and convergence trades [they try] to realise the best return.”
Both long/short hedge fund investors and long-only mutual fund customers are putting money into Latin America because they are optimistic about the region.
So what about wider emerging markets? Will they continue to bounce back?
Ali Chughtai, a portfolio manager at Whard Stewart, a hedge fund that targets macro and currency opportunities, said: “2017 has started with an appreciable rally in EM [emerging market] currencies as the post-Trump victory outflows from EM have reversed…”
Chughtai said markets had reconsidered the boost to US growth from the Trump administration’s policies, which had led to US bond markets stabilising.
Chughtai added: “While EM currencies offer long-term value, this rally in EM may pause if the new administration re-affirms its stance on border tax and/or renegotiating terms of its membership of multi-lateral trade organisations.”

(Recode.net) This is what Snap is paying Google $2 billion for

This is what Snap is paying Google $2 billion for
The social media company has a huge contract with Google Cloud Platform. But what does that mean?

Snap, which is set to IPO this week, signed a $2 billion, five-year contract with Google for its cloud services, which makes Snap Google’s largest customer of its cloud platform.

For context, Google’s cloud business was previously estimated to have an annual runrate revenue of about $1 billion, according to RBC Capital Markets analyst Mark Mahaney, trailing Amazon Web Services’ $12.2 billion and Microsoft Azure’s estimated $2.7 billion. (Snap also has a $1 billion contract with AWS.)

But what is Snap actually getting from Google for all that money?

Google wouldn’t say exactly which services Snap has signed up for, but there are four key products that fall under Google’s cloud services: Cloud Storage for storing data on servers managed by Google; Compute Engine for retrieving and managing data; App Engine for developing and running applications; BigQuery for data analysis; and a suite of machine learning tools.

We know Snapchat was built on App Engine, which basically allows clients to host their main software on datacenters managed by Google. That differs from just hosting your own servers, since cloud services allow a company to make use of more servers as needed, allowing the app to run faster and more efficiently.

App Engine is one of Google’s core cloud services. It provides users with tools and services to build software, ensure its security and test new features. It also allows apps to handle an increasing amount of traffic. Other companies that use App Engine include Best Buy and enterprise cloud phone system Dialpad.

Here’s how different tools may be useful to Snap based on how other companies use Google’s cloud offerings.

For example, Google cloud customer Spotify uses BigQuery to analyze user listening data, according to a report from analyst firm Enterprise Strategy Group. ESG cited a query for top tracks by age, gender and market: What took five hours with other tools, Spotify’s use of BigQuery took about eight minutes.

Then there’s Dialpad, a startup that sells workplace communications services like UberConference, which runs on Google’s cloud service, according to CEO Craig Walker. That includes using App Engine, which the company uses for such essential processes as initiating and routing users’ video, voice and conference calls.

But Dialpad processes the actual voice and video calls through its own data centers so it can more closely control the quality of calls, according to Walker, a former Googler. Even a tiny lag in a voice call can upset users, so controlling the servers directly is important, he said.

That means companies that make heavy use of Google cloud won't necessarily use it for everything, since there are some limitations to using the service. Dialpad’s approach when it comes to calls could be relevant to Snapchat, which lets users place calls from within the app.

Snap might also make use of Google’s machine learning software, which largely refers to more sophisticated programs that can automate certain tasks.

Snap uses a machine learning system right now that helps it to improve ad targeting. It predicts which ads users are more likely to respond to and shows the ad to the right users. The goal is to increase a certain action, like downloading an app, instead of just showing more impressions.

However Snap uses Google cloud, the company is clear that the product is critical to the startup’s operations. The company’s S-1 filing states, “Any disruption of or interference with our use of the Google Cloud operation would negatively affect our operations and seriously harm our business.”