Valeant Expands Rebates On Two Controversially Priced Heart Drugs

Beleaguered drug giant Valeant Pharmaceuticals International ( VRX ) said Monday that it’s expanding the rebate program on two controversially priced drugs, in one of the first significant policy changes under its new chief executive. Valeant said that, effective immediately, all hospitals buying the drugs are eligible for a rebate of at least 10%, and possibly as high as 40%, depending on the volumes bought per quarter. This will be done largely through group purchasing organizations, but hospitals not using those can contact Valeant’s customer service directly, the company said. Nitropress, used to treat heart failure and high blood pressure, and Isuprel, used in the treatment of heart attacks, gained notoriety last year when Valeant hiked their prices by triple-digit percentages after acquiring them. This, along with some other drug-price scandals, led to Valeant’s management being hauled before a Senate committee, which Valeant CEO Joseph Papa thanked in Monday’s press release for “the attention they have brought to this issue.” Papa just joined the company on May 3, as previous CEO J. Michael Pearson was pushed out after watching the company’s stock tumble almost 90% under the weight of the pricing issue, as well as an accounting scandal. Pearson had already signaled that Valeant isn’t going to be pricing drugs as high as it used to and will no longer be looking for older assets like Nitropress and Isuprel, whose chief attraction is that they could be more expensive. Despite the move, Valeant stock was down 2% in late-morning trading on the stock market today , near 25. The stock so far hasn’t fared much better under Papa than it did under Pearson, hitting a six-year low of 23.54 on Thursday. It didn’t help matters that hedge fund Brahman Capital sold its stake in Valeant , according to Bloomberg, as well as in Endo International ( ENDP ), another troubled specialty drugmaker run by a former Valeant executive.

Globalstar Pops, Could Defeat Google, Microsoft On Wi-Fi Spectrum

Globalstar ( GSAT ) stock popped for the second straight trading day on views federal regulators will green light its petition to open up spectrum airwaves in the 2.4 GHz block for wireless services. Globalstar, a mobile satellite service operator, had faced opposition from Alphabet ’s ( GOOGL ) Google, Microsoft ( MSFT ) and the cable TV industry over concern the airwaves could interfere with Wi-Fi services. Comcast ( CMCSA ) has been expanding its public and residential Wi-Fi network and might jump into wireless services, analysts say. Tom Wheeler, chairman of the Federal Communications Commission, on Friday proposed an order that would allow Globalstar to move forward with its “authenticated Wi-Fi” service. Globalstar stock, which popped 35% on Friday, was up another 15% in morning trading in the stock market today , albeit still trading below 3. It’s possible Globalstar’s opponents such as  Microsoft or Google could make a last-ditch effort to block approval, analysts say. The FCC could issue new rules as soon as  June. Paul Gallant, an analyst at Guggenheim Partners, says a remaining issue is what limitations the FCC’s order puts on Globalstar’s commercial rollout. “There has been some concern that an FCC approval could be a Pyrrhic victory if the agency attached heavy limits on power output or out-of-band-emissions that restricted the value of Globalstar’s proposed service,” wrote Gallant in a research report. “We suspect the technical parameters are likely to approximate what Globalstar initially proposed 2.5 years ago. That would be positive for its new service.” Amazon.com ( AMZN ) reportedly had tested Globalstar’s spectrum a couple of years ago, said one report.

How To Get Statistically Significant Alpha In A Hurry: Financial Advisors’ Daily Digest

MFS Investment Management argues active management can consistently deliver alpha; Mark Hebner says investors would be better off seeking beta. Ronald Surz says investors need not wait decades to determine statistically significant alpha; he offers “microwave alpha,” a quick way to measure manager skill. Jack Waymire gives five reasons why mobile-optimized websites are no longer a luxury for financial advisors. To frightened investors who sense something bad is due after a seven-year bull market and amidst a wobbly economy, MFS Investment Management’s commercials touting a “significant advantage to active management” may be striking just the right chord. These investment pros are working to reduce “downside volatility” and to “consistently deliver alpha,” says the investment firm’s one-and-a-half-minute commercial on the power of active management. But of course, not everybody’s having it. RIA Mark Hebner, a proponent of indexing, applies statistical tests to MFS’ fund lineup and suggests just one out of 87 funds has any alpha to offer (and even that one could be a fluke, Hebner further argues). He concludes that investors would be better served seeking beta. Hebner has previously argued that it could take something like a century to evaluate investment skill in a statistically significant way. Comes along SA contributor Ronald Surz, an innovative thinker, and proposes a method to deliver statistical significance in years rather than decades: “microwave alpha,” he calls it . This quick-cooking alpha is achieved through portfolio simulations: “The breakthrough determines statistically significant success in the cross-section rather than across time… A portfolio simulator creates all the portfolios the manager might have held, selecting stocks from a custom benchmark – thousands of portfolios… To state an extreme example, a return of, say, 1000% is significant, and you don’t have to wait 50 years to declare it significant.” With no further ado, we’ve got many other advisor-relevant stories to start your week with: Your comments on any of the above are, as always, most welcome below.