Business day: FDA says Diabetes drug should be pulled

WASHINGTON — The widely used diabetes drug Avandia should be pulled off the market, federal health officials said Monday, urging action in response to studies linking the drug to an increased risk of heart attacks.

That risk, combined with the drug’s lack of unique short-term benefits in helping diabetics control blood sugar, means continued sales are not justified, Food and Drug Administration scientist Dr. David Graham told the panel of outside experts.

The manufacturer, GlaxoSmithKline PLC, argued that there is no increased risk, citing its own analyses of studies of Avandia, also called rosiglitazone.

“The number of myocardial infarctions is small, the data are inconsistent and there is no overall evidence rosiglitazone is different from any other oral antidiabetes agents,” said Dr. Ronald Krall, the company’s senior vice president and chief medical officer.

The FDA convened the experts to consider whether Avandia should be restricted to use in select patients and branded with prominent warnings or removed altogether from sale. Previously, the FDA had said information from dozens of studies pointed to an increased risk of heart attack.

The FDA isn’t required to follow the advice of its advisory committees but usually does.

About 1 million Americans with Type 2 diabetes use Avandia to control blood sugar by increasing the body’s sensitivity to insulin. That sort of treatment has long been presumed to lessen the heart risks already associated with the disease, which is linked to obesity. News that Avandia might actually increase those risks would represent a “serious limitation” of the drug’s benefit, according to the FDA./AP

Mortgage misery

Foreclosures up 58 percent in ’07

LOS ANGELES — The number of U.S. homes facing foreclosure surged 58 percent in the first six months of the year, the latest sign of growing problems in the mortgage industry, a data firm said Monday.

In all, 573,397 properties across the nation reported some sort of foreclosure activity in the first half of this year, including receiving notices of default, auction sale notices or being repossessed by lenders, Irvine-based RealtyTrac Inc. said.

That was 58 percent higher than in the first six months of 2006 and 32 percrent higher than the last six months of 2006.

Among the states with the highest number of homes receiving foreclosure-related notices were California, Florida, Texas and Ohio, the firm said.

RealtyTrac said a total of 925,986 foreclosure filings were sent to homeowners during the first half of the year. Some of those filings targeted the same property, in part because owners had more than one mortgage.

That figure was up 56 percent from the year-ago period and up 39 percent from the last six months of 2006, the firm said.

“We could easily surpass 2 million foreclosure filings by the end of the year, which would represent a year-over-year increase of over 65 percent,” said RealtyTrac CEO James J. Saccacio.

The national foreclosure rate through the end of June was one filing for every 134 U.S. households, the company said../AP

Biodiesel boom?

Forecast: Gas glut by 2010

HOUSTON — Gasoline prices could decline by 2010 amid a “potential oversupply” of oil products, even though U.S. refining capacity will be expanded less than previously thought, according to a new report by Edinburgh, Scotland-based consultancy Wood Mackenzie LTD.

Despite lagging refinery expansion and growing demand, the report suggests that new biofuels, natural gas liquids, and liquefied petroleum may replace some conventional fuels, resulting in a potential oversupply that depresses prices at the pump.

The central conclusion — that a glut of fuel supply from outside the conventional refining system could depress gasoline prices — differs from the consensus of many energy experts, which holds that the supply impact from biofuels and other sources will be limited between now and the end of the decade. The report comes amid an industry-wide reevaluation of refinery expansion projects that were once considered likely to be online by 2010.

Wood Mackenzie, whose clients include the major oil companies, had previously warned of a shortfall in transportation fuels.

A number of alternatives, described as “non-refinery” supply, will reduce dependence on conventional motorfuels, like gasoline and diesel, according to Wood Mackenzie. These alternatives include such widely touted fuels as ethanol derived from sugar or corn, and biodiesel, which is derived from soybeans and other plants. Beyond a shifting landscape of motorfuels, Wood Mackenzie sees feedstocks for petrochemical plants and power plants changing as well. These shifts will contribute to an overall imbalance of fuel supplies that Jamison and her colleagues say will cause a wide variety of impacts in each sector and region. Dow Jones/AP

Tahoe ski resort acquired by S.F. firm

TAHOE CITY — A San Francisco-based real estate investment firm has finalized its purchase of Alpine Meadows Ski Resort near Lake Tahoe, the resort announced Monday.

JMA Ventures bought the 2,400-acre resort in the Tahoe National Forest from Utah-based Powdr Corp.

Powdr has owned Alpine since 1994 and recently bought Killington and Pico resorts in Vermont. It’s other holdings include Boreal and Soda Springs ski areas on Donner Summit, as well as Mount Bachelor in Oregon, Park City in Utah and Las Vegas Ski and Snowboard resort.

Terms of the Alpine deal were not released.

The purchase comes on the heels of JMA’s purchase last year of nearby Homewood Mountain Resort and the Hotel Avery in Truckee.

JMA President Art Chapman, who lives in Truckee, said he and his family have a vested interest in Alpine Meadows.

“My family and I have skied here for decades,” he said in a written statement.” My kids grew up skiing here.”

Chapman said a top priority will be to preserve the resort’s character.

Alpine spokeswoman Rachael Woods said employees are excited about the new owners.

“They’re very enthusiastic about the mountain,” Woods said Monday. “And we’re just excited to see what their plans are going to be.”/AP

China tightens bank credit

BEIJING — China tightened credit Monday in a new effort to cool its white-hot economy, ordering banks to shrink the pool of money for lending by increasing their reserves for a sixth time this year.

The move was widely expected after the economy grew by 11.9 percent last quarter, its fastest rate in 12 years, despite earlier efforts to control the boom. Beijing raised interest rates on July 20 for a third time this year.

The amount of reserves that lenders must keep with the central bank was raised 0.5 point to 12 percent of their deposits, the central bank said. The increase takes effect Aug. 15.

China’s communist leaders want to keep overall growth high to reduce poverty. But they worry that runaway investment in real estate and other industries could push up politically volatile inflation or spark a debt crisis if borrowers default.

Regulators have tried to target individual industries with investment curbs while keeping interest rate hikes small to avoid derailing growth. Even after three rises this year, the key lending rate stands at just 6.84 percent on a one-year loan.

But economic planners worry that the export-fueled flood of cash surging through China’s economy is driving dangerously fast investment in stocks, real estate and other assets.

The surge in the money supply is straining the central bank’s ability to contain pressure for prices to rise. It drains billions of dollars a month from the economy through bond sales, piling up reserves that have topped US$1.3 trillion.

Still, Chinese banks are so flush with cash that moves such as Monday’s reserve increase are considered to be just a government signal to curtail lending, not a real constraint on credit./AP

Securities regulator opens for business

WASHINGTON — A new regulatory organization overseeing more than 5,000 investment firms and over 600,000 securities brokers nationwide, combining the monitors of the New York Stock Exchange and the U.S. brokerage industry, began operations on Monday.

The Financial Industry Regulatory Authority is the largest non-government securities regulator in the world, with some 3,000 employees in main offices in Washington and New York, and in 15 district offices around the country.

The agency, which will also be known as FINRA, will oversee enforcement, arbitration and mediation of customer complaints, and rule writing for the securities brokers and dealers.

Creation of the single self-regulatory organization, from the combination of NYSE Regulation Inc. and NASD, formerly the National Association of Securities Dealers, is one of the biggest changes in the system governing policing of the U.S. securities markets since the creation of the system during the Depression.

Richard Ketchum, the chief executive of NYSE Regulation, will be the non-executive board chairman of FINRA during a three-year transition period.

FINRA will operate under the oversight of the Securities and Exchange Commission, which granted final approval to the combination last Thursday.

The new organization, first proposed in November, is intended to cut costs by eliminating duplications within the operations of the two self-regulatory groups./AP

Napa Valley Register Copyright © 2009