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SEPTEMBER 13, 2004
Edited by Monica Roman HEADLINER James Tobin: Feeling Better  CEO James Tobin has Boston Scientific on the mend. On Sept. 1, the medical-device maker said sales of its Taxus Express2 drug-coated stent, a device used to prop arteries open after angioplasty, were rebounding after a series of recalls. "We are emerging from August in a much better position than I think most people would have thought," Tobin told analysts.Boston's share of the drug-coated stent market (the coating reduces the risk of arteries reclogging) fell as low as 55% in July after the recalls, but has since climbed back to more than 65%. Rival Johnson & Johnson, which makes the only other drug-coated stent sold in the U.S., has been slow to exploit Boston's problems due to manufacturing woes. "They were lucky J&J couldn't respond immediately," says Merrill Lynch analyst Daniel Lemaitre. And while the Natick (Mass.) company did lower its earnings forecast for the rest of the year, investors were relieved stent sales are back on track. Boston's shares rose 7%, to $38.28, on the news. By Amy Barrett New Ulcers For Merck Merck's (MRK ) ailments are mounting. On Aug. 30, a study of the company's $5 billion cholesterol-lowering drug Zocor revealed that high doses of the drug didn't benefit patients who have an elevated risk for a heart attack. It also showed that those higher doses increased the risk of a dangerous muscle side effect. While industry analysts don't expect the news to trigger a big falloff in Zocor sales, it will certainly be ammunition for sales reps from archrival Pfizer (PFE ), which sells the $10 billion cholesterol medication Lipitor. The bad news about Zocor comes on the heels of another study that linked Merck's blockbuster painkiller Vioxx to a higher risk of heart attacks than a competing drug from Pfizer.   The iPod's Big Brother  Judging from the latest iMac desktop model, Apple Computer (AAPL
) seems to be taking its style cues from the iPod, its wildly successful digital music player. The new iMac G5, unveiled on Aug. 31, stuffs all the PC innards right behind a flat-panel display. Besides saving space, it gives the appearance of an overgrown, two-inch-thick, stretched-out iPod. While the design is revolutionary, analysts aren't sure it will win over the millions of iPod owners who use Windows PCs. The new G5 is priced at $1,299 to $1,899, so Apple still isn't addressing the sub-$1,000 segment that dominates PC sales. And supplies of the new iMac could be tight, due to shortages of IBM's G5 microprocessor.Just Too Many Wheels General Motors (GM ) and Ford Motor (F ) were hoping brisk sales in August would help thin out their fat inventories. But it didn't happen, as gas prices near $2 a gallon softened demand. GM sales fell 7% and Ford's volume dropped 6%. GM has been racing to reduce inventories for most of the year, but they remained at 1.15 million vehicles at the end of the month -- 15% above last year's stocks. That means consumers can expect rebates and cut-rate financing deals to continue and both companies will have to slow down their assembly lines. GM says it will cut production by almost 7% in the fourth quarter, and Ford will do so by almost 8%. Meanwhile, Chrysler Group's (DCX ) sales rose 1%. More Net Phone Tieups The Internet calling wave keeps surging. AT&T (T ) announced on Sept. 1 that it will co-market voice over Internet protocol, or VoIP, and cable broadband with cable operator Adelphia Communications (ADELQ ). AT&T can now provide VoIP service, which routes calls over the Net rather than traditional phone lines, to 170 U.S. markets. Similarly, cable provider Charter Communications (CHTR ) teamed with Sprint (FON ) on Aug. 31 in a VoIP deal. Currently, more than 600,000 Net subscribers use commercial VoIP services, but with companies aggressively rolling out service, that number should hit 17.5 million by 2008. Et Cetera... -- The two bidders for MGM (MGM ) -- Time Warner (TWX ) and Sony (SNE ) -- expect to get word soon after Labor Day. -- eBay (EBAY ) spent $325.6 million to hike its stake to 86% in South Korea's largest online auction company. -- Charles Schwab (SCH ) will sell its institutional investing arm to Swiss bank UBS (UBS ). Closing Bell: Forest Laboratories  Shares of Forest Laboratories (FRX
) slid 8.4% on Sept. 1, to $41.98, after it said that Alzheimer's patients in a late-stage clinical trial of its experimental drug neramexane failed to show improvement. Nevertheless, Forest still plans to continue work on the new drug.
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