Valeant: We'll bump Allergan offer to $200 a share

The Canadian drugmaker Valeant said it would be willing to raise its takeover bid for Allergan by almost 12 percent, which would mean $200 or more per share for the maker of Botox.

The letter to Allergan's board Monday did not break down the exact terms of the new offer, but Valeant said the increase would consist of added "consideration" and expected appreciation of Valeant's own stock to be used in any deal.

The letter was released publicly just before Allergan released its third-quarter earnings, which topped Wall Street expectations.

Allergan pointed out in a written statement that Valeant has not made a firm higher offer and said the letter was intended to "distract investors from Allergan's outstanding third quarter results."

Valeant, based in Laval, Quebec, has made several offers to buy Allergan, only recently offering about $179 per share at current stock values.

Allergan, which is based in Irvine, California, has set a Dec. 18 date for a special shareholder meeting at which its shareholders will consider replacing most of its board.

That could give Valeant and activist investor Bill Ackman's Pershing Square Capital Management LP, which has built a large stake in Allergan, a chance at a takeover. Beyond control of the board, there also will be a vote on whether Allergan should talk to Valeant Pharmaceuticals International Inc. and Pershing Square.

The companies have traded barbs throughout the takeover battle, and Valeant has said that Allergen has made misleading statements about Valeant's businesses, including Bausch + Lomb, which Valeant acquired last year.

Allergan's third quarter was helped by rising drug and medical device sales.

Allergan on Monday reported net income of $312.5 million, or $1.03 per share, in its third quarter, which ended Sept. 30. That's up from $300.8 million, or $1 per share, in the same quarter last year

Earnings, adjusted for one-time gains and costs, were $1.78 per share. Analysts surveyed by Zacks Investment Research expected $1.62 per share, on average.

The company, which also makes eyelash extender Latisse and dry-eye drug Restasis, posted revenue of $1.82 billion in the period, which also beat Street forecasts. Analysts expected $1.77 billion, according to Zacks.

Shares of Allergan Inc. slipped 31 cent to $183.90 in morning trading. Its shares have almost doubled in the past year.

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Sarepta tumbles on new delay for key drug

NEW YORK — Shares of Sarepta Therapeutics plunged Monday after the company said regulators want more data about its muscular dystrophy treatment eteplirsen before they will consider approving the drug.

The Food and Drug Administration asked for three years of data on patients who participated in one study of the drug, an independent review of an important result, and more information about the drug's safety. Sarepta says the FDA wants to have further discussions and could impose more requirements later on. The company plans to file for approval of the drug again by mid-2015.

Sarepta Therapeutics Inc. shares lost $7.32, or 31.1 percent, to $16.24 in morning trading.

Eteplirsen is intended to treat Duchenne muscular dystrophy, a fatal genetic disease that causes increasing muscle weakness. It affects one of every 3,500 boys worldwide and the company says patients usually die before the age of 30. The drug is designed to address the cause of the disease by allowing the body to produce a functional dystrophin protein, which plays a key role in muscle fiber function. It is Sarepta's most advanced experimental drug and the company has asked the FDA for expedited approval.

Sarepta said Monday that the FDA wants to see the results from an independent review of patients' dystrophin levels as well as 168 weeks of clinical data from that pivotal trial.

In early 2013 the Cambridge, Massachusetts, company said the FDA asked for more information about the drug. At the time, analyst Kimberly Lee said the company's studies may be too small, as a key clinical trial involved only 12 patients. Lee added that the FDA did not seem convinced that increasing patients' dystrophin levels would lead to a clinical benefit.

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US official urges allies to combat IS ideology

KUWAIT CITY — The United States is pressing Arab nations and other allies to do more to counter the Islamic State group's slick propaganda campaign, with a top American envoy on Monday describing efforts to combat the extremist messages as a vital pillar in the fight to defeat the group.

The Islamic State group that has seized large parts of Iraq and Syria and declared a self-styled caliphate, or Islamic empire, in areas under its control embraces social media platforms such as Twitter and YouTube.

Hollywood-style film clips and other elements of its media campaign boost the group's credibility among disaffected but plugged-in young Muslims and helps it promote its conquests, inspire sympathizers and attract new recruits.

Speaking at a gathering of anti-IS coalition partners in the oil-rich Gulf nation of Kuwait, retired U.S. Gen. John Allen said it is up to all members of the alliance to "clearly, forcefully and consistently" reject the group's ideology and offer alternatives to it.

Allen, who is tasked with coordinating the U.S.-led coalition, characterized the fight in the communications sphere as a crucial element of an overall strategy that also includes confronting the group militarily and attempting to cut off its finances.

"It is only when we contest ISIL's presence online, deny the legitimacy of the message it sends to vulnerable young people and expose ISIL for the un-Islamic cult of violence it really is ... that ISIL will truly be defeated," he said, using an alternate acronym for the group.

The Islamic State group produces online magazines and polished propaganda videos that make use of multiple camera angles, computer graphics and sophisticated editing techniques.

One video released by its Al-Furqan media arm earlier this year included aerial footage apparently shot from a drone over the Iraqi city of Fallujah, which it now holds. In another twist, the group cast a British journalist it holds, John Cantlie, as a sort of talk-show host speaking in a series of videos about the group.

Allen was joined in Kuwait by Undersecretary of State for Public Diplomacy and Public Affairs Richard Stengel, who told reporters that an "information coalition" is needed to complement the military campaign.

"Whatever we do collectively on the battlefield needs to be amplified on the information battlefield," Stengel said.

The United States and its allies have carried out hundreds of airstrikes against the Islamic State group since August.

Washington is also trying to find ways to choke off the group's finances, which are estimated to include earnings of about $1 million a day from black market oil sales alone. The group also makes money from extortion rackets and other criminal enterprises.

While the group is not believed to rely heavily on outside donations, American officials have urged Kuwait and Qatar in particular to do more to stop private fundraising for extremists.

"We need to work with all of our partners in the region to close down formal and informal sources of support," U.S. Treasury Secretary Jacob Lew said during a visit to Cairo on Monday.

"We in the United States are determined to work with all of our allies in the region, not just on a military basis but on a financial basis, to make sure that these sources do not continue to flow in and become a permanent source of funding," he added.

Sulaiman al-Jarallah, undersecretary at the Kuwati Ministry of Foreign Affairs, said Monday his country is fighting terrorist financing and has created a special task force to combat the problem.

U.S.-allied Gulf nations including Qatar and Saudi Arabia also took part in the Kuwait conference, as did representatives from Turkey, Iraq, Lebanon, Jordan, Egypt, France, and Britain.

So did the United Arab Emirates, which hosts air bases used by the coalition and is among the regional states that have carried out airstrikes against Islamic State targets in Syria. One of its top diplomats echoed the American officials' message.

"We will not be able win this war against IS and terrorism and lose the battle of public opinion," Anwar Gargash, the Emirati minister of state for foreign affairs, told delegates. "We have to win on all fronts: on the ground and also by winning hearts and minds against terrorism."

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Schreck reported from Dubai, United Arab Emirates. Associated Press writer Fay Abuelgasim in Kuwait City contributed to this report.

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Follow Adam Schreck on Twitter at www.twitter.com/adamschreck.

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Detroit makes final arguments to exit bankruptcy

DETROIT — The city of Detroit made its final argument Monday to get out of bankruptcy, saying creative deals with creditors and other key factors have put it in position to scrub its books less than 16 months after filing the largest public case in U.S. history.

"The end really is in sight," attorney Bruce Bennett said at the start of his closing remarks.

Judge Steven Rhodes will decide by next week whether Detroit's bankruptcy plan is fair and feasible. It eliminates $7 billion in debt, cuts general pensions by 4.5 percent, pledges $1.7 billion for service improvements and prevents the sale of valuable art.

Detroit, which has lost 27 percent of its population since 2000, can't afford to raise taxes to get more revenue, especially from poor residents, Bennett said.

"It's self-defeating behavior. ... No one would come here. They would look at the tax assessments and say, this will never end," he said.

Attorneys for the state of Michigan, retirees and pension funds also are expected to make closing remarks. Bond insurers with more than $1 billion at risk fought the city during much of the trial, but now are on the sidelines after settling for cash, real estate and long-term leases on certain assets.

The city can't be forced to get rid of assets to get out of bankruptcy, Bennett said, but the deals brought peace and require financial companies to invest in the city's future.

Detroit filed for Chapter 9 bankruptcy protection in July 2013, becoming the largest U.S. city to ever do so.

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Follow Ed White at http://twitter.com/edwhiteap

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Oil slips below $80, energy stocks fall

NEW YORK — The price of oil fell below $80 a barrel Monday morning and investors resumed their retreat from energy stocks.

Mounting evidence of rising supplies and weak demand continues to sour investors on prospects for crude oil and the companies that produce it.

Goldman Sachs was the latest Wall Street bank to lower its forecast for crude prices, saying OPEC was unlikely to reduce exports in an effort to push prices back up.

Benchmark U.S. crude was down $1.09 to $79.92 a barrel in New York. Brent crude, a benchmark used to price international oils used by many U.S. refineries, was down $1.20 to $84.93 in London.

Shares of Continental Resources Inc. and EOG Resources, which focus on U.S. oil drilling, fell more than 4 percent.

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Fandango signs ticketing deals with Bow Tie, 6 other chains

Fandango has added seven exhibitors to its roster of theater partners.

The online ticketer will now represent hundreds of additional screens across thirteen states thanks to deals with Bow Tie Cinemas, Classic Cinemas, Megaplex Theatres, UltraStar Cinemas, Dipson Theaters, Cinepolis and TCL Chinese Theatres.

The company now sells tickets for more than 25,000 screens domestically. The big prize among the deals is Bow Tie, the eighth largest U.S. exhibitor with more than 420 screens.

Among the other chains, Megaplex primarily operates in the West and Southwest, boasting 200 screens in 17 locations. Classic Cinemas operates 104 screens at 13 locations in the Chicago area. UltraStar Cinemas oversees 69 screens at 7 locations throughout Southern California and Arizona. Dipson Theatres maintains 44 screens and 8 locations throughout New York, Pennsylvania and Michigan. Though headquartered in Mexico, Cinépolis operates 35 screens in 5 venues in the U.S. The TCL Chinese Theatres is a 7-screen complex in the heart of Hollywood that also houses the world's largest Imax screen.

Over the past year, Fandango has signed deals with Harkins Theatres, Digiplex Destinations and Premiere Cinemas.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Floating gas terminal anchored in Lithuania

TALLINN, Estonia — A floating natural gas terminal arrived Monday in the Lithuanian port of Klaipeda, in a move by the Baltic country to further reduce its reliance on energy supplies from Russia.

The South Korean-built 300-meter (984-foot) vessel — the size of an aircraft carrier — will be able to provide 4 billion cubic meters (141 billion cubic feet) of gas a year when it becomes operational in January.

The $330 million "Independence" is owned by Norway's Hoegh LNG and leased to Lithuania's SC Klaipedos Nafta terminal operator. It was 50 percent cheaper than a land-based terminal.

The three Baltic nations of Lithuania, Latvia and Estonia get all their natural gas from Russia and lack connections to the wider European pipeline system that would allow them to import from elsewhere.

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Merck 3Q adjusted profit tops analysts' estimates

WHITEHOUSE STATION, N.J. — Merck's third-quarter net income fell mostly because of large costs tied to acquisitions and divestitures.

But the drugmaker's adjusted earnings topped Wall Street's view, and it narrowed its full-year adjusted earnings forecast on Monday.

Merck also announced on Monday that the Food and Drug Administration gave breakthrough therapy designation to Keytruda for advanced non-small cell lung cancer that has progressed on or following platinum-based chemotherapy.

The designation is intended to speed the approval process for drugs that treat diseases that have no or inadequate treatments.

Merck's shares edged lower in morning trading.

The company earned $895 million, or 31 cents per share, during the July-September quarter. A year earlier it earned $1.12 billion, or 38 cents per share.

Removing costs related to acquisitions, divestitures, restructuring and other items, earnings were 90 cents per share.

Analysts surveyed by Zacks Investment Research expected earnings of 88 cents per share.

Revenue declined to $10.56 billion from $11.03 billion partly on divestitures and the termination of a joint venture with AstraZeneca.

Zacks was calling for higher revenue of $10.69 billion.

Pharmaceutical revenue slipped 4 percent to $9.1 billion on product divestitures and the loss of market exclusivity for some products such as oral chemotherapy drug Temodar and asthma and allergy pill Singulair.

Merck now foresees full-year adjusted earnings in a range of $3.46 to $3.50 per share. Revenue is expected between $42.4 billion and $42.8 billion. The Whitehouse Station, New Jersey company's prior guidance was for adjusted earnings in a range of $3.43 to $3.53 per share on revenue between $42.4 billion and $43.2 billion.

Analysts polled by FactSet predict earnings of $3.47 per share on revenue of $42.5 billion.

Keytruda, a genetically engineered drug known chemically as pembrolizumab, is part of a hot, promising new class of antibody-based drugs. They work by taking a brake off the immune system so it can better recognize and attack cancer cells.

In September, the FDA granted accelerated approval to Merck for Keytruda for treating melanoma that has spread or can't be surgically removed in patients previously treated with another melanoma drug called Yervoy.

Merck & Co. is not affiliated with the German drugmaker Merck KGaA.

Its stock slipped 89 cents, or 1.5 percent, to $56.72 in morning trading. Its shares have risen more than 21 percent over the past year.

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Stocks mostly lower as oil sinks, Europe struggles

NEW YORK — Energy companies led U.S. stocks lower Monday as the price of oil languished around $80 a barrel and more disappointing economic news came out of Europe.

Goldman Sachs lowered its outlook for crude prices and a report on business confidence in Germany, Europe's largest economy, showed a sixth straight month of declines.

KEEPING SCORE: The Standard & Poor's 500 index slipped one point, a fraction of a percent, to 1,964, as of 11:20 a.m. on Monday. The Nasdaq composite declined one point to 4,484, while the Dow Jones industrial average rose nine points, or 0.1 percent, to 16,815.

FALLING CRUDE: Mounting evidence of rising supplies and weak demand continued to weigh on oil prices, which are down sharply from a June high of nearly $107 a barrel. Goldman Sachs was the latest Wall Street bank to lower its forecast for prices in a report out Sunday, saying OPEC was unlikely to cut exports to try and push prices back up. Benchmark U.S. crude was down $1.09 to $79.92 in New York. Brent crude, used by many U.S. refineries to set prices, was down $1.20 to $84.93 in London.

OIL STOCKS: The slide in oil tugged down shares in oil and gas producers and the companies that provide services to the industry. Exxon Mobil and Chevron fell 1 percent, and Newfield Exploration's 7 percent drop was the worst in the S&P 500.

NOT SO BAD: Last week, the stock market turned in its best performance in nearly two years, helping the S&P 500 recover from steep losses in previous weeks. The benchmark index had lost almost 6 percent by mid-October, but is now down 0.5 percent for the month.

CHOPPY TRADING: What's behind the recent turbulence? David Joy, chief market strategist at Ameriprise Financial, thinks it's tied to actions by the world's central banks. The Federal Reserve is winding down its $4 trillion bond-buying program -- known as QE -- this month. And many investors expect the European Central Bank to launch its own program on a similar scale.

"We're approaching the end of QE, and I think the market is going through a period when people are asking how important is it to lack that support," he said. "The open question is how robust is the economy you're left with. Is it strong enough to sustain earnings growth?"

EUROPEAN TESTS: The European Central Bank said that 13 of Europe's 130 biggest banks failed a review of their finances and need an extra 10 billion euros ($12.5 billion) to strengthen themselves. The review is meant to purge banks of bad investments to enable them to lend more. The results were initially welcomed in markets. Stocks fell only in the banks that failed as investors expected them to raise money, a process that dilutes bank share prices. The bank that did worst in the tests, Italy's Monte dei Paschi di Siena, saw its shares plunge 18 percent. Those that passed, however, traded higher.

QUOTE: "The stress tests showed healthy balance sheets in most major institutions while those found with capital gaps are mostly contained in periphery nations," Desmond Chua, of CMC Markets, said in a commentary.

GERMAN DATA: European stock markets swung lower later in the day when Germany's Ifo index of business confidence showed a fall for the sixth consecutive month in October, the lastest in a string of disappointing data. Some analysts suggested lower oil prices and a weaker euro should help industry and exporters, keeping the country from falling into a recession.

EUROPE'S MARKETS: Germany's DAX and France's CAC 40 index both slipped 0.4 percent. Britain's FTSE 100 dipped 0.3 percent.

CURRENCIES: The euro rose to $1.2677 from $1.2670 late Friday. The dollar fell to 107.86 yen from 108.16 yen.

ASIA'S DAY: Shares were mixed in Asia. Japan's Nikkei 225 stock index climbed 0.6 percent, and South Korea's Kospi rose 0.3 percent. Hong Kong's Hang Seng fell 0.7 percent.

FED MEETING: Investors are focusing on this week's Federal Reserve policy meeting for confirmation the U.S. central bank is ending its bond-buying program. That policy has kept long-term interest rates low to encourage borrowing and spending but also boosted stocks as investors sought higher returns. Recent mixed signals about the strength of the U.S. recovery prompted speculation that the Fed might let the program continue for longer, but many analysts consider that outcome unlikely.

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Movietickets.com introduces scanner-free mobile tickets

MovieTickets.com will begin offering mobile tickets that can be validated without scanners.

The company will begin rolling out a pilot edition of the technology by the end of the year and has commitments from theater chains it represents to begin offering the ticketing.

MovieTickets.com says that theater chains have been hesitant to allow people to use mobile devices as tickets because scanners are costly, require maintenance and demand a significant capital expenditure. With the new technology, the tickets will have embedded security features such as watermarks or touch animation elements that do not require scanning.

"Everything is visually verifiable," said Movietickets.com CEO Joel Cohen. "We looked at past technologies and the reasons that they weren't adopted. We looked at barriers and we tried to break them down."

Movietickets.com has had mobile ticketing, and other companies, such as rival Fandango, also offer it, but this is the first of its kind to not require a scanner. Fandango is also experimenting with barcode-less technology, according to an individual with knowledge of the company.

"We're going to do a slow roll out and have conversations with exhibitors," said Cohen. "We hope to be available more widely early next year."

The company developed the tickets with Bytemark, which has created similar products for the NY Waterway in New York City, the South Shore line in Chicago, and Cap Metro in Austin, Texas.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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