Questor share tip: Buy cash-generating Reckitt Beckiser

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By Garry White, Questor Editor


Published: 7:00AM GMT 12 Feb 2010





Reckitt Benckiser Group

Reckitt Benckiser

£32.70 +83p

Questor says BUY

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Tesco shoots the Christmas lights out

By Neil Collins, Reuters Breakingviews

Published: 9:18PM GMT 12 Jan 2010





Tesco

The world’s fourth-largest retailer, which takes more than one pound in every
eight spent in UK shops, was expected to struggle against improving rivals,
but once again Tesco
has shown the rest how to do it , turning in the strongest Christmas
performance in three years.

The combination of low interest rates, the temporary cut in value added tax
and the last splurge of public spending created an extraordinarily
favourable few months for UK shopkeepers. In addition, the supermarkets have
been adding non-food space and have gained at the expense of the likes of
Marks & Spencer.

British retailers have frequently fallen over when they go overseas, but Tesco
seems to be the exception. Even its U.S. adventure, dubbed Fresh’n'Queasy by
the doubters at the start, reported “strongly positive”
like-for-like sales growth. Results from Metro, the German retailer which
overtook Tesco in global sales because of the weak pound, made the point:
its sales fell 3.4 per cent in the fourth quarter while Tesco’s rose by 6.9
per cent.

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AstraZeneca buys into experimental antidepressant for up to $1.2bn in quest for next blockbuster drug$

AstraZeneca, the British drugs company, is to pay up to $1.24 billion (£748 million) for access to an experimental antidepressant that it hopes could be its next blockbuster drug.
The maker of Seroquel, one of the world’s bestselling treatments for schizophrenia and bipolar disorder, will pay $200 million upfront to Targacept, the maker of TC-5214. It will then hand over up to $540 million if the drug meets development targets and is filed with the US Food and Drug Administration (FDA) on time.
Targacept is also entitled to up to $500 million if sales milestones are hit and will receive double-digit percentage royalties on global sales of the drug, which analysts believe could hit $1 billion per year.
Large-scale human trials of the drug will begin in mid-2010 and Targacept hopes to apply for the FDA for permission to market it in 2012.

Many of the estimated 42 million people who are struggling with major depressive disorder are treated with serotonin reuptake inhibitors, such as Prozac.
In a novel way of combatting depression, the new treatment works by altering certain nicotinic channels, which activate cells to spread messages around the brain. Side-effects of the treatment that have been evident so far include headache, dizziness and constipation.
Initially, the new drug is being trialled in patients who have previously tried serotonin inhibitors without success to begin with, but it will also be trialled as the first drug that a patient takes after being diagnosed with major depressive disorder.
More than $20 billion of antidepressants are sold around the world each year, even though many of them, including the famous Prozac, are available as cheap generics.
David Brennan, the chief executive of AstraZeneca, said: “The opportunity to improve treatment in depression is a large one, both commercially and in terms of benefits for patients.”
AstraZeneca has already applied to the FDA to have Seroquel XR, a version of Seroquel that releases the drug gradually, approved for treating depression.
Targacept and AstraZeneca have already collaborated on three drugs for cognitive disorder, which are still in development, including treatments for attention deficit/hyperactivity disorder and Alzheimer’s disease.
Yesterday’s announcement added to the likelihood that AstraZeneca may eventually buy Targacept. However, Targacept’s shares closed almost 6.5 per cent lower at $22. Bret Holley, an analyst with Oppenheimer, said that investors may have been disappointed that AstraZeneca had not bought Targacept outright. Targacept has also seen its share price rise sevenfold since it announced promising results from a mid-stage study of the drug in July, and so shareholders may have thought that it was time to sell.
AstraZeneca has stayed out of a recent round of mega-deals in its sector, which include Pfizer, the maker of Viagra, paying $68 billion for Wyeth.
As patents expire on many of the world’s bestselling medicines, pharmaceutical companies are increasingly looking outside their companies for new drugs and new revenue streams.
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Disney stores get mini-theme park revamp

Walt Disney is giving its 340 stores in the US and Europe a multimillion
dollar makeover that will turn them into mini theme parks.

The company is working with Apple on the plan and is understood to be planning
to spend around $1 million each on floor to ceiling revamps of existing
stores, which will be relabeled Imagination Parks.

The aim is to turn them into entertainment destinations, where children can
select and watch film clips, take part in karaoke contests or chat live with
Disney Channel stars via satellite.

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Nissan eyes an electric car boost

Japanese carmaker Nissan plans to make 100,000 electric cars a year by 2012, as it aims to become the first auto firm to mass produce the vehicles.

Nissan chief executive Carlos Ghosn said the company would unveil its first electric car in August of this year, with sales to begin in 2010.

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Porsche global sales slump by 28%

Porsche has seen its nine-month unit sales slump by more than a quarter after demand for its cars was hit by the worldwide recession.

Global sales at the German carmaker declined 28% to 53,635 vehicles between August 2008 and the end of April, compared with a year earlier.

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Hitachi to split core businesses

Hitachi has announced plans to split its automotive systems and consumer electronics businesses as part of a massive cost cutting operation.

The Japanese technology and industrial conglomerate also said it will be appointing a new president. Read more

Hitachi to cut up to 7,000 jobs

Hitachi is to cut up to 7,000 jobs, as it warned it expects to make an annual loss of 700bn yen ($7.8bn; £5.5bn) because of a big fall in global sales.

Hitachi said the job cuts would be made globally across its car equipment and electronics divisions. Read more

Audi to stop work for five days

Audi is to stop production at its main German factory for five days next month - it is the latest carmaker to halt work in the face of falling sales.

The firm, a subsidiary of Volkswagen, makes its A3, A4 and A5 cars, and Q5 sports vehicle at its Ingolstadt plant. Read more

GM loses top sales spot to Toyota

US carmaker General Motors sold fewer vehicles than Toyota last year, ending GM’s 77-year reign as the world’s top-selling car firm.

GM said it sold 8,350,000 vehicles in 2008, while Toyota said sales totalled 8,972,000 vehicles. Read more

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