PHARMACEUTICALS
Merck drops cancer drug
Merck KGaA, Germany’s second-largest listed pharmaceutical company, said it would not seek approval for its experimental cancer drug evofosfamide after the medicine failed in late-stage clinical trials. The drug, when combined with standard treatments, did not help patients with pancreatic cancer or soft-tissue sarcoma live longer than those given the standard medicine alone, Merck said in a statement yesterday. CEO Karl-Ludwig Kley is betting on the company’s acquisition of chemical firm Sigma-Aldrich Corp. to reduce Merck’s dependence on its pharmaceuticals unit after more than 10 years of failing to develop a new drug.
ENERGY
Glencore cuts output, jobs
Glencore PLC, the world’s biggest shipper of power-station coal, is cutting production and more than three-quarters of the jobs at a mine in Australia’s Queensland State after a plunge in prices. The company is to start cutting by March about 180 of 230 jobs at the Collinsville coal mine, it said in an e-mailed statement yesterday. The mine is taking further steps to reduce production, though the company did not give a number. Glencore said earlier this year it would cut annual output at Collinsville by 2 million tonnes to 2.8 million tonnes.
ENERGY
Bank sees oil at US$60
Now is the time to buy oil, as OPEC members suffering swollen fiscal deficits will be prompted to curb output, said France Societe Generale SA, which predicts a price rebound next year. Brent crude is expected to climb to US$60 a barrel at the end of next year, as production cuts by OPEC members should help balance supply and demand, the bank said yesterday, while recommending increasing exposure to oil-related assets with a view that commodity prices are bottoming out. OPEC last week abandoned the idea of limiting production to control prices as Saudi Arabia stuck to its one-year-old policy of pumping until rivals are squeezed out of the market.
TRANSPORTATION
CMA bids for NOL
French transportation firm CMA CGM SA yesterday said it had offered to buy Singapore-based container liner Neptune Orient Lines (NOL) in a bid to “cement” its position as a global leader in shipping. The deal, announced in a filing with the Singapore Exchange, where NOL is listed, values the Singapore container firm at about S$3.4 billion (US$2.4 billion). However, the offer needs to fulfill some preconditions, mainly the approval of anti-trust authorities, within a year after yesterday’s announcement, the filing said.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
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