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AstraZeneca, RBS, Allianz: Business news in brief

British pharmaceutical shares rise on success of breast cancer drug; bank set to announce further job cuts; Allianz plays down acquisition talks

Friday 17 February 2017 21:05 GMT
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The drugmaker's shares were up 2.37 per cent at 4,554 pence on the London Stock Exchange, while its US-listed shares were up 1.70 per cent at $29.25
The drugmaker's shares were up 2.37 per cent at 4,554 pence on the London Stock Exchange, while its US-listed shares were up 1.70 per cent at $29.25

AstraZeneca’s Lynparza on target with breast cancer

AstraZeneca’s Lynparza drug has met the main goal of helping breast cancer patients live longer without their condition worsening, according to a late-stage study.

The drugmaker’s shares were up 2.37 per cent at 4,554 pence on the London Stock Exchange, while its US-listed shares were up 1.70 per cent at £24 ($29.25) in pre-market trading on Friday.

Lynparza, which won US approval for ovarian cancer in 2014 and generated 2016 sales of £175m, is one of the drugs that the company hopes will help achieve its target of more than $40bn in annual revenue in 2023.

The findings are set to bolster Lynparza’s competitive profile beyond a subset of ovarian cancers, with numerous other tumours and combination opportunities ahead, Morgan Stanley analysts said.

Lynparza belongs to a closely watched class of new medicines called PARP inhibitors, which block enzymes involved in repairing damaged DNA and help to kill cancer cells.

The study compared Lynparza with chemotherapy in patients with BRCA-mutated metastatic breast cancer and is the first positive trial to evaluate the efficacy and safety of a PARP inhibitor beyond ovarian cancer, the British drugmaker said.

Reuters

RBS to announce more job cuts

Britain's biggest banks will reveal annual results next week amid fears of more job losses and as the sector continues to pay for past scandals.

Aside from the beleaguered Royal Bank of Scotland, all of the main lenders are expected to show solid profits with surging stock markets helping those with investment banking operations.

RBS is likely to take the shine off progress elsewhere in the sector when it reports on Friday and is expected to announce another round of job losses as it remains deep in the red for the ninth year.

Reports suggest boss Ross McEwan will outline yet more cost cutting, resulting in a further reduced workforce.

Analysts expecting eye-watering annual losses of £6.1bn, which would be one of the group’s biggest losses since its government bailout.

The group revealed recently it had set aside another $3.8bn (£3.1bn) ahead of an expected fine from US authorities, which will be included in the bank’s results for the fourth quarter of 2016.

PA

Allianz plays down talk of big deals as hands cash to investors

Allianz played down talk of making a major acquisition any time soon, with chief executive Oliver Baete confident it can grow without deals.

The Munich-based insurer said it would return up to €3bn to shareholders, but made clear this did not exclude the possibility of it being involved in M&A.

“There is no trade-off between share ‎buybacks and acquisitions. We are strong enough, we can do both,” Baete told journalists after Allianz posted a forecast-beating 23 per cent rise in fourth-quarter net profit.

Talk of big deals in the insurance sector has heated up since the start of the year, led by Italian retail bank Intesa Sanpaolo confirming it was considering a possible bid for insurer Generali.

However, Allianz said it would be relying on internal growth to meet 2018 targets and that any purchases would need to be accretive to shareholders.

And while it was interested in casualty insurance, asset management and in countries where it has a strong enough presence to quickly integrate a target, it was not in a hurry.

“We’re not frantically seeking a transaction,” Baete said. “Size isn’t an end in itself.”

Reuters

Barclays, Citi helped South Africa with Forex probe

Barclays and Citigroup approached South Africa’s competition regulator with information relating to the alleged rigging of the rand’s exchange rate, according to sources.

South Africa’s Competition Commission said on Wednesday it had found more than a dozen local and foreign banks had colluded to coordinate trading in rand and dollars.

Its inquiry centred on an instant messaging chat room called “ZAR Domination”, which the Commission alleged was used by the banks to coordinate trading activities when giving quotes to customers who buy or sell currencies.

The Commission launched the probe in April 2015, joining a global clampdown that has led to dozens of traders being fired and big banks fined a total of around $10bn for rigging interest rate and foreign exchange benchmarks.

In the case of the alleged rigging of the rand, the Competition Commission said it had recommended fines amounting to 10 per cent of the banks’ South African annual revenues to the country’s Competition Tribunal, which adjudicates on the watchdog’s findings.

Reuters

CBI group wants pay ratio disclosures to focus on UK workers

Britain’s largest companies should only be required to disclose pay ratios for UK-based employees, if a hotly debated law on executive compensation takes effect, according to the country’s biggest business group.

The CBI broadly favours disclosing pay ratios and tracking long-term changes in the pay gap between top executives and average workers as a way of building trust in business, the organisation said in a written response to the government’s green paper on corporate governance reform. However, regulating the pay of overseas employees wouldn’t work because rates in other countries are different.

“The CBI is recommending that any pay ratio publication should focus on the trends within a company’s UK workforce – showing how the variance between executive pay and average worker pay is changing over time,” CBI president Paul Drechsler said in a statement. “This way, pay ratios may provide meaningful transparency and value to this debate.”

Bloomberg

Unite sells portfolio of student accommodation to fund manager for £295m

Student accommodation developer Unite has sold off 13 properties to fund manager Brookfield for £295m.

The sale includes a portfolio of properties located in Aberdeen, Birmingham, Bournemouth, Edinburgh, Glasgow, Liverpool and York totalling 4,175 beds.

Unite said its share of the deal amounts to £102m, with the cash being used to fund further growth in mid- to high-ranked university locations with the most secure long-term growth prospects.

Part of the proceeds will be injected into Unite’s recent 3,100 bed on-campus acquisition at Aston University and the remainder “recycled into Unite’s development activity”.

Chief executive Richard Smith said: “This sale is an important part of our strategy to recycle capital to fund our ongoing investments, focused on the strongest university towns and cities, where we have deep university relationships and where we can provide the best accommodation and services for our students.

PA

Opel workers press to preserve jobs in any PSA takeover

Employee representatives and union leaders at General Motor’s Opel subsidiary say they’re ready for “constructive talks” with France’s PSA Group about a possible takeover but will push to keep current jobs and factories.

Opel’s works council and the IG Metall union said they need to be included in talks “in a transparent and fair process.”

They said: “Our objective must be to seize the existing opportunities to safeguard employment and sites to create a successful Opel/Vauxhall.”

PSA Group, which makes Peugeot and Citroen cars, and GM say they are in talks about expanding existing cooperation, with one outcome being an acquisition of Opel and British brand Vauxhall by PSA. They say it is possible no deal will result. Opel is headquartered in Ruesselsheim and has 19,000 employees in Germany.

AP

Spotify-backed Soundtrack Your Brand raises £18m for expansion

Soundtrack Your Brand, which provides a background music streaming service for businesses, said on Friday it had raised $22m (£18m) in a funding round led by Nordic venture capital fund Industrifonden and the UK’s Balderton Capital.

The company was co-founded by Spotify in 2013 and provides tailormade music playlists for customers such as McDonald’s and Swiss watch brand TAG Heuer. It said the funding would help with its plans to expand globally.

Telia, Northzone, Creandum and H&M’s family vehicle HMP, which have already invested in SYB, also participated in the latest financing round. Spotify, the largest external owner with around 15 per cent of the share capital, did not.

An SYB spokesman declined to comment on the amount of shares issued, or on the valuation of the company.

The Swedish tech start-up’s sales are currently growing by between 300 and 400 per cent a year, from the 10m krona (£850,000) achieved in 2015, chief executive and co-founder Ola Sars said. He added the firm's market share in the Nordic countries was around 30 per cent.

Reuters

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