Category Archives: Technology

Pfizer’s Sales Pitch On Research: No Mention Of Groton

by Categorized: Corporate finance, Health Care, Technology Date:

If the situation weren’t so pathetic, Connecticut’s Pfizer-watchers could laugh as the company tries to snooker British politicians this week into thinking the drug behemoth’s proposed, $106 billion takeover of AstraZenica makes sense.

The Brits ought to be smarter than U.S. officials who stood idly by as Pfizer destroyed value in its $218 billion worth of acquisitions since 2000, in three deals alone — Warner-Lambert, Pharmacia and Wyeth.

Groton, formerly the global R&D headquarters for Pfizer and home to 6,000 employees, is now mainly a large development office — not mentioned as CEO Ian Read touts the company’s top research locations.  Groton still represents a very significant presence for Pfizer, perhaps 3,000, but it’s one of numerous sites the company has shrunk or shuttered after big mergers, where building demolitions and fire sales of facilities rule the day.

“We have hubs of science in La Jolla, and in the Bay Area, and in Cambridge, Massachusetts,” Read says in a newly released video designed to sell the AstraZenica deal as, in his words, “a win-win for society, a win-win for shareholders, and a win-win for stakeholders.”

It’s a win-win for top managers and investment bankers. Period.

Click here and here to watch the videos of Ian Read and Mikael Dolsten, the global R&D president.  Watch Read dance around the issue of the operations in Sandwich, England, which Pfizer gutted.

Many people oppose the merger on the grounds that Pfizer, the world’s biggest drugmaker, is getting too big.  The company, echoing the madness at similar-sized Comcast, claims it needs all that heft to develop hugely expensive, high-risk drugs.  

But unlike Comcast, which actually has gotten too big, Pfizer has declined, when you consider its takeovers. In 2001, one year after acquiring Warner-Lambert for the bubble price of $93 billion, Pfizer had sales of $32 billion. Pharmacia had sales of $19 billion and Wyeth $14 billion, for a total of $65 billion — or $87 billion in today’s dollars.

Compare that $87 billion to Pfizer’s sales over the last 12 months: $51 billion, with a market value of $186 billion, less than it paid for the three companies.

Since the end of 2001, Pfizer’s shares have delivered a total return, including dividends, of 29 percent, compared with 110 percent for the S&P 500 index, and that’s with billions of dollars in stock buybacks. Remember, a stock buyback is just a way of shrinking a company, and for Pfizer that means it’s right where it was, only without its former competitors.

And yet, in the new videos, Read and Dolsten can hardly contain themselves, talking about all the good that will come of the AstraZenica deal — yet another match made in heaven, in their options-driven world.

“A combined company will have products and science that can address in an integrated manner what the patient needs and can take on disease management and offer much more value for patients and health care providers,” Dolsten gushed.

What he’s saying is that Pfizer could make itself into a global force for coordinating pharma development, not just another firm in the business. Basically, a utility, only private, for-profit — like the cable companies, speaking of Comcast.

Well, we already have three industries that are struggling mightily with disease management, thank you very much: The U.S. government through Centers for Disease Control and other agencies; the managed-care insurance industry; and the fractured health care industry itself, with a hospital system that’s under siege.

If we’re going to let the the drug industry turn itself into a public utility, we should regulate profits and executive pay. They’ve had it both ways long enough.

Investments In Connecticut Technology Firms Jump in 2014

by Categorized: Corporate finance, Technology Date:

Three very large investment deals in the first three months of 2014 led to Connecticut’s largest quarterly tally for venture capital deals in years, $189 million.

The total in the first quarter of 2014 was more than three times larger than any quarter of the previous two years, according to the MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association.

Two of the three recent investment rounds went to New Haven-based drug development firms. Melinta Therapeutics, now in Phase 3 trials for a drug to treat gonorrhea and other infections with a single pill, received $70 million in February from a group led by Vatera Healthcare Partners, its major current equity owner.

Kolltan Pharmaceuticals, a cancer-drug developer also in New Haven, received $60 million last month from a variety of investors. Kolltan, with technology developed at Yale, is in Phase 1 trials for a revolutionary therapy.

Odyssey Logistics & Technology Corp., a shipping management firm based in Danbury, received $48 million from a group led by Goldman Sachs. 

Seven other deals for Connecticut firms totaled $12 million. Connecticut Innovations, the state’s quasi-public technology investment arm, participated or led in five of those.

The large quarter for tech investments does not necessarily mark a trend, as venture capital deals don’t follow a clear pattern from quarter to quarter. But the New York metro region, which includes Fairfield and New Haven counties, has had two straight quarters with deal levels not seen since 2001, the MoneyTree report showed.

And nationally, according to the report, which was compiled based on data from Thomson Reuters, the $9.5 billion invested in tech firms in the first quarter of 2014 was the highest since early 2001.

Many firms are moving into later stages of development and that explains the larger investments, said Bobby Franklin, President and CEO of the National Venture Capital association. But he said, “overall capital remains constrained for most venture capital firms.”

Zygo Agrees To Be Acquired By AMETEK For $364M

by Categorized: Corporate finance, Technology, Wall Street Date:

Zygo Corp., the Middlefield maker of precision optics and optical measuring equipment, said Friday it agreed to be purchased by AMETEK Inc. in a cash deal worth $364 million.

The $19.25 per share deal represents a 31 percent premium over Zygo’s Thursday close of $14.68, and a 27 percent bump from the company’s 6-month average trading price.

If the deal goes through as planned with a targeted closing in June, it would mark the end of independence for a Connecticut homegrown technology stalwart that was founded in 1970 and showed growth but was rarely a home run for investors. Zygo had $162 million in sales in 2013, with net income of $11.4 million.

The deal was valued at $280 million by the companies in a joint written statement, a reduction from the total market value due to Zygo’s $90 million in cash and lack of debt.

AMETEK, based in Berwyn., Pa., is a $3.6 billion-a-year maker of electronic instruments and electro-mechanical devices. The company, traded on the New York Stock Exchange, is a component of the Standard & Poor’s 500.

The companies did not say how the acquisition would affect Zygo’s more than 600 employees, and whether Zygo CEO Gary K. Willis would remain as an employee. In recent years the company has employed nearly 300 people at its Middlefield head office and plant; an updated number was not immediately available Friday.

Willis, who was CEO in the ’90s,  returned to run the company last October after the board ousted a 3-year CEO amid a sales slump — but the deal with AMETEK is hardly a desperation measure, as Zygo sales recovered nicely and its balance sheet is very strong.

It’s so strong, in fact, that at least six law firms announced Friday that they were investigating the deal on behalf of stockholders, saying Zygo’s board might have fetched more in an open auction of the company. Such moves are not uncommon when strong companies that have not seen sharp run-ups in the markets agree to sell themselves.

A rejection by shareholders would seem unlikely considering that Michael A. Kaufman, the Zygo chairman, whose fund controls 24 percent of the company, has agreed to vote his shares for the deal. Willis owned 111,646 shares, or less than 1 percent, as of the end of 2013.

The deal would allow AMETEK to expand its line of contact-based measurement devices to include Zygo’s opitical, non-contact line, the AMETEK CEO said in the written release.

Willis said AMETEK “shares our focus on delivering exceptional metrology and high end optics solutions to our global customers.”

The deal is nearly twice as large as an offer Zygo rejected in 2010, from a different Pennsylvania company, for $10 a share. Since then, Zygo has made three acquisitions. It now has operations in Tucson, Arizona; two locations in Californiia; Montreal; and overseas in Shanghai, Taiwan and Germany.

Zygo shares opened near the offer price on the Nasdaq exchange and by late afternoon were trading as high as $19.65, closing at $19.43 — higher than the offer, as some investors believed a better deal could emerge.

AMETEK shares were up 1.25 percent on a sharply down day for Wall Street.


State Names Board For Bioscience Fund

by Categorized: Economic Development, Health Care, Public finance, Technology Date:

The state’s newly created, $200 million Bioscience Innovation Fund now has an advisory committee filled with some of Connecticut’s high-powered figures in the field.

The fund, overseen by Connecticut Innovations, the state’s quasi-public technology investment and assistance arm, was created by the governor and legislature earlier this year as a way to target drug development projects and other bioscience innovations, at firms or universities, with public money that could also attract private investment.

Chairing the committee is Claire Leonardi, CEO of Connecticut Innovations.

The board, with members appointed by Gov. Dannel P. Malloy or legislative leaders, includes Peter Farina, Ph.D., executive in residence at Canaan Partners; Steven Hanks, M.D., vice president of medical affairs for the central region at Hartford HealthCare; Joseph Kaliko, CEO of Gaming Innovations International; Marc Lalande, Ph.D., chairman of the Department of Genetics and Developmental Biology, and head of genomics and personalized medicine programs at UConn; William LaRochelle, Ph.D., an executive at Roche 454 Sequencing Solutions International; Charles Lee, Ph.D., scientific director at The Jackson Laboratory;  Alan Mendelson, general partner of Axiom Venture Partners; Edmund Pezalla, M.D., national medical director for pharmaceutical policy at Aetna; Carolyn Slayman, Ph.D., professor of genetics and cellular and molecular physiology and deputy dean at Yale School of Medicine; and Eleanor Tandler, founder and CEO of Novatract Surgical.

Jewel Mullen, M.D., the state’s public health commissioner, and Catherine Smith, commissioner of economic and community development, are ex-officio members with voting rights. The fund is run by Jeremy Crisp, Ph.D., the CI executive vice president and chief innovation officer.

The fund, to be disbursed over 10 years to projects that show commercial promise, is scheduled to award $10 million the first two years, $15 million for the third and fourth years, and $25 million in years five through 10.




The (Protein) Science Of Marketing

by Categorized: Health Care, marketing, Technology Date:

What are those little blue-and-white boxes on the Christmas trees at Protein Sciences Corp.?

Flublok containers, of course! They’re the perfect size and shape for an ornament, and the Meriden pharma company would like to see its breakthrough flu vaccine gift-wrapped this season and injected into arms across the world.


After years in development, Flublok won Food and Drug Administration approval earlier this year for the first flu vaccine that’s made entirely from cell cultures, free of eggs, antibiotics and mercury preservatives. They call themselves the Whole Foods of flu vaccine-makers and they’re turning out doses for delivery as we speak.


Manon Cox, left, the CEO and Dan Adams, executive chairman at Protein Sciences Corp. Dan Haar/The Hartford Courant

Manon Cox, left, the CEO and Dan Adams, executive chairman at Protein Sciences Corp.
Dan Haar/The Hartford Courant

Last weekend the company held a Flu-Block party at its complex, open to the public, to kick off National Influenza Vaccine Week, dubbed by the Centers for Disease Control.  On Thursday the firm hosted Lt. Gov. Nancy Wyman and state Sen. Danté Bartolomeo, in hopes of sparking some sales of the $32 vaccine to the state.

It’s marketing time at Protein Sciences, which has 115 employees, mostly in Meriden, where all of this year’s doses for customers are being made. The firm is setting up manufacturing in Pearl River, New York, where Pfizer abandoned millions of square feet of space it acquired with the takeover of Wyeth.

Sales for this flu season are shaping up modestly with the company aiming for a breakout heading into next winter. “We knew going in that this was going to be a market research year,” said Dan Adams, the executive chairman.

No, the boxes on the trees at each of Protein Sciences’ two buildings are not filled with the product.  It may be marketing time but this is still a drug company.


CT Hospitals Join Online Market To Cut Supply Costs

by Categorized: Commerce, Health Care, Technology Date:

By now we’ve all heard stories of hospitals charging hundreds of dollars for an aspirin pill or a bandage, part of the screwy world of medical cost allocation that includes list prices almost no one pays, based on made-up numbers.

But how do hospitals get those aspirin pills and rolls of gauze at the lowest possible prices? The supply chain for hospital supplies, like everything else in health care, is changing fast. On Thursday, an online hospital supply marketplace founded in April is announcing that a coalition of 100 New England hospitals has signed on.

The Northeast Purchasing Coalition includes several in Connecticut: Yale-New Haven, Waterbury, Eastern Connecticut Health Network, Norwalk, Danbury and Charlotte Hungerford in Torrington.  The group has joined Irving, Texas-based aptitude LLC, which claims to be the hospital industry’s first online market allowing direct contracting between suppliers and buyers.

Hospitals largely buy their supplies now through very large “group purchasing organizations” that sign long-term contracts with suppliers, allowing hospitals to benefit from scale.  But about 40 percent of hospital supply purchases are still made through individual contracts — a $55 billion slice of the industry including such bigger-ticket items as pacemakers and artificial heart valves, according to aptitude, which was formed by Novation, one of the group purchasing organizations.

Hospitals using its market can save 10 percent to 15 percent over individual contracts, said Justin Hibbs, a co-founder of aptitude — which works with hospitals to analyze purchasing patterns. “We’re being told by both the hospitals and the suppliers that they can do more with less,” he said, meaning they can cut administrative costs on top of saving direct costs.

All of this matters because it’s part of the industry’s response to intense cost pressures. Whether this new model of purchasing can cut the listed “chargemaster” price of that Band-Aid by hundreds of dollars is anyone’s guess.

Cyber Monday Sales Up 21 Percent, Led By Smart Phones

by Categorized: Retail, Technology Date:

After a holiday weekend that was less than anticipated in many bricks-and-mortar stores, Cyber Monday came in with a 21 percent sales gain over 2012, IBM’s analytics unit reported Monday.

Mobile devices accounted for 17 percent of sales, an increase of 55 percent over last year, the report showed.

The overall increase sounds big and it is in some ways, but it’s the smallest online sales gain for the Monday after Thanksgiving in at least three years.

Sennheiser Snags an Emmy

by Categorized: Media, Technology Date:

The Sennheiser Group, the German audio electronics firm with its U.S. headquarters in Old Lyme, has won an Emmy award.

Daniel Sennheiser accepting the award Photo by Frank Micelotta/Invision for the Academy of Television Arts & Sciences/AP Images

Daniel Sennheiser accepting the award
Photo by Frank Micelotta/Invision for the Academy of Television Arts & Sciences/AP Images

No, the maker of microphones is not joining Netflix and Amazon in creating its own entertainment content. Sennheiser won the Philo T. Farnsworth Award at the 65th Primetime Emmy Engineering Awards in Hollywood — for television technology.

Sennheiser was one of seven recipients of Engineering Emmys at Thursday night’s ceremony, including YouTube.





Aetna’s Bertolini: Shut Down Federal Exchange Until It’s Fixed

by Categorized: Government, Health Care, Insurance, Technology Date:

NOTE: An updated version of this post is at Click here for the column.

Aetna CEO Mark Bertolini has a tactic he thinks would help the 55 contractors working on the balky federal health care exchange: Shut the system down until the fix is done.

The idea comes with risks and more delays, but so does keeping the system running.

Bertolini has taken that message to Washington, D.C., where he’s been in touch with Jeffrey Zients, President Obama’s point man on the systems fix, along with top Obama officials including White House Chief of Staff Denis McDonough and HHS Secretary Kathleen Sebelius.

Aetna CEO Mark Bertolini talked about his own company's consumer technology and the problems of the federal health exchange system.  Dan Haar/The Hartford Courant  10/31/13

Aetna CEO Mark Bertolini talked about his own company’s consumer technology and the problems of the federal health exchange system.
Dan Haar/The Hartford Courant 10/31/13

Aetna is one of only two “alpha testing sites” for the exchange system, and the Hartford-based health insurer participates in Obamacare plans in 17 states — though it has been critical of regulations and pulled out of Connecticut’s exchange.

“When you get into this kind of situation with technology, you just don’t have a short-term solution,” Bertolini told an audience in Farmington Thursday at an event of the Tunxis Community College Foundation. “Turn off the stuff that isn’t working.”

The idea should be to “freeze the scope,” meaning stop trying to make upgrades to the system and instead isolate the problems, said Bertolini, who has often said he considers Aetna to be a technology management firm in healthcare, as much as it is a risk management firm.

Bertolini said he’s been “on the phone with Jeff about that very plan….Pushing the pause button right now would be a good thing…if you do it right now, five to 10 years from now nobody’s going to remember this.”

The system hasn’t had any crashes since Bertolini made those remarks publicly but it has been down for maintenance twice in the wee hours over the weekend, according to Jim Wadleigh, chief information officer for Access Health CT, the Connecticut exchange.

Wadleigh said Connecticut’s exchange is taking steps now to shield the system from further federal disruptions — including taking bids for firms that would privately do “remote identity proofing” for Access Health CT — one of the federal functions that failed, throwing the system out of order twice last week.

But Wadleigh said he would not have advised pausing the system. “I don’t agree with it,” he said of Bertolini’s idea. “I think that any business that’s trying to roll out a startup organization is going to have some bumps and I’m sure there was some politics in his decision to recommend that they shut it down.”

By “politics,” he could mean Aetna’s overall criticism of the system. As for Aetna’s participation in the Connecticut exchange, “We’re hoping to get them back,” Wadleigh said. “They’re an integral member and a national player.”

Zygo Ousts CEO; Former Chief Is Interim Leader

by Categorized: Manufacturing, Technology Date:

Zygo Corp. said late Monday that Chris L. Koliopoulos had resigned as chairman and chief executive officer effective immediately, by mutual agreement with the company’s board.

The Middlefield-based maker of precision optics and optical measuring equipment named former CEO Gary K. Willis as interim CEO and Michael A. Kaufman as chairman. No reason was given for the change in a written release from Zygo.

Carol Wallace, a Zygo director and CEO of Middlefield-based Cooper-Atkins Corp., said in the release that the board is “focused on achieving Zygo’s full potential for the benefit of our shareholders, and continuing to enhance Zygo’s leadership position in its markets. We believe that Mr. Willis has the requisite experience and leadership qualities to lead the company forward.”

Koliopoulos joined Zygo as CEO in January, 2010 and was named chairman a month later. An expert in optical interferometry — measuring waves of electricity — he holds a doctorate and had long competed against Zygo, launching two companies and heading a third.

Koliopoulos, listed as age 60 in last month’s annual report, led Zygo’s expansion in California and Taiwan in its post-recession recovery, returning yearly operating profit to nearly $30 million in the fiscal year ending June 30, 2012. But in the recent fiscal year, sales slipped to $149 million to $167 million and operating profit fell to $12 million.

Shares of Zygo closed at $16.24 on the Nasdaq Monday before the announcement, ahead of the 12-month average of $15.56, and up more than 60 percent from the time Koliopoulos arrived — the same month when Zygo rejected a takeover offer of $10 a share.

“It has been a privilege for me to work with many fine colleagues at Zygo” he said in the release. “I am proud of Zygo’s many accomplishments, and look forward to its continued success.”

Willis has helped make Zygo a homegrown Connecticut success story in technology. He has been a board member from 1992 to 2000 including two years as chairman, and from 2009 to the present. He was the Zygo CEO from 1993 through 1999.

Zygo last month named Tony Allan as chief operating officer. He joined the company in February as senior vice president. It’s unclear whether he’ll be a candidate to lead the company.