Barretts Minerals Beats Challenge to Talc Bankruptcy Case
A Texas judge declined to toss a defunct talc supplier out of bankruptcy despite arguments from personal-injury claimants that it was improperly using chapter 11 to protect its solvent parent company, Pfizer spinoff Minerals Technologies, from talc-related lawsuits.
Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston on Tuesday rejected injury claimants' request to dismiss the chapter 11 case of defunct Barretts Minerals without explaining his rationale. He said from the bench that he would issue his explanation within 21 days.
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5 hours ago
- Yahoo
How condo owners are affected when an association files for bankruptcy
Bankruptcies have traditionally been rare for community associations, but two recent filings by condominium associations in Miami-Dade and Palm Beach counties just a week apart could represent the start of a troubling trend. The first was in late April, when the Green Terrace Condominium Association filed for Chapter 11 bankruptcy, which is designed to allow filers to reorganize their finances under court supervision while remaining operational. Chapter 11 bankruptcy, which is also commonly referred to as reorganization bankruptcy, is the most common type used by associations. The community's residents were alerted about the filing via letters posted on their doors stating: 'The association has faced significant challenges over the past decade, including various criminal and civil litigation and substantial mismanagement by previous board members. The current board is actively working to address these issues and is optimistic the Chapter 11 filing will lead to a favorable outcome for all involved.' The filing came after the city of West Palm Beach notified the community that it planned to shut off its water service due to its outstanding balance of more than $1.4 million. The city is also owed $2.5 million in code enforcement liens, and it is just one of dozens of creditors listed in the filing. The cutoff of water service to the community was suspended by the bankruptcy filing, which has provided residents with more time to find and move to new homes. The reports indicate 20 people have applied with the city for up to $7,000 in emergency rental assistance for new apartments, and 16 have met the eligibility requirements. The circumstances behind the bankruptcy filing for the Ocean 5 Condominium Association on May 2 are different. The five-story building at 458 Ocean Dr. in Miami Beach has only 13 units and was completed in 2006, and it apparently resorted to a Chapter 11 bankruptcy filing as a result of a $583,000 civil judgment awarded to one of its unit owners. According to a report by the South Florida Business Journal, the association originally sued the owner in 2019 for allegedly conducting unauthorized short-term rentals and causing a disturbance involving one of its renters that drew media attention, which harmed the property's reputation. The owner filed a counterclaim against the association alleging it used the lawsuit to retaliate for the negative publicity, and it deactivated the owner's key to access the building without cause. The unit owner ultimately prevailed and was awarded the damages for lost rental income and emotional distress. The bankruptcy filing, which lists the owner as the association's sole creditor and claims assets valued at less than $130,000, states that the Miami-Dade Circuit Court jury's ruling is currently under appeal. While the conditions at these two associations that led to their bankruptcy filings are different, they both share a common factor. Involvement in civil litigation took a toll on the financial well being for both, and for Ocean 5 the judgment in favor of the owner's countersuit appears to have been the sole cause of its insurmountable debt. Indeed, litigation is among the most common drivers for association bankruptcies. It can present unexpected costs that create insoluble financial shortfalls, so associations should turn to it only when all other reasonable options have been exhausted. In addition to such legal setbacks, associations can also be forced into bankruptcy by significant financial mismanagement or theft, uncovered property damage, high rates of owner delinquencies, and the costs associated with inspections and repairs. Chapter 7 bankruptcies, which are also available to associations, are designed to liquidate assets in order to pay off debts, so they are generally an unrealistic option. Associations' assets are all jointly owned by their unit-owner members. Instead, most association bankruptcies take the form of Chapter 11 filings, which enable them to restructure their debts with the benefit of an 'automatic stay' to halt creditor collection proceedings unless they are otherwise allowed by the court. They provide opportunities to negotiate with creditors, cancel or renegotiate contracts and avoid the seizure of assets and garnishing of bank accounts. Just as with litigation and foreclosures, associations should consider bankruptcy only as a last resort. They will need to pay both attorneys' fees and court costs, plus fees for a trustee if one is appointed, and they typically will not be allowed to completely wipe away debts and judgments. Their actions and reorganization plans will be highly scrutinized by their creditors and bankruptcy judge, who may even dismiss the case if it is deemed that the community has not presented a viable restructuring strategy. Those that are experiencing mounting and highly significant financial strains should seek the help of qualified attorneys and other experts to make changes to their budgets and collections that could address and resolve their growing financial woes. If all reasonable options and actions prove to be of no avail, they should give bankruptcy circumspect consideration with the help of highly experienced bankruptcy counsel. Michael L. Hyman with the South Florida law firm of Siegfried Rivera has focused on community association law since 1970 and is based at the firm's Coral Gables office. He is the author of the two-volume 'Florida Condominium Law and Practice' and is board certified as an expert in community association law by The Florida Bar. Michael is a regular contributor to the firm's Newsroom blog at The firm also maintains offices in Broward and Palm Beach counties, and its 49 attorneys focus on real estate, community association, construction and insurance law. MHyman@ 305-442-3334.
Miami Herald
6 hours ago
- Miami Herald
Women's apparel chain makes a big move toward men
A shaky economy might not prevent people from getting married, but it may prompt them to streamline their wedding planning. That's yet another tough break for the wedding industry, which was severely impacted by the Covid pandemic. After all, social distancing pushed the pause button on wedding guests doing the Cha Cha Slide on dance floors for a long while. But one thing remains for many couples in love: They want to do everything possible to ensure their special day goes off without a hitch. Related: Top luxury fashion brands just made a quiet change About half (52%) of engaged couples start planning their wedding a year ahead, according to The Knot 2025 Real Wedding Study, which surveyed 17,000 U.S. couples who got married in 2024 and a number who plan to this year. After all, there's a lot that goes into putting together a memorable event. Plus, couples want to look as good as they feel on their special day. And that means making room in their budget for the perfect wedding wardrobe. Now a well-known brand in the space has just made it a bit easier. Don't miss the move: Subscribe to TheStreet's free daily newsletter Image source: Getty Images David's Bridal has just revealed its partnership with Generation Tux, a tuxedo and suit rental shop, as an exclusive in-store shop-in-shop for menswear. The goal is to create a one-stop location offering great deals to outfit the entire wedding party. "Through our partnership with Generation Tux, we know we are offering the highest-quality product to our customers, and doing it at the best possible prices," David's Bridal's President Elina Vilk said in a statement. "For over 70 years, brides have trusted us to ensure they feel beautiful on their big day. We're ready and excited to offer the same to grooms online and exclusively in 10 select stores, with more to come." Related: Popular women's retailer closing 30% of its stores The Knot study said 90% of couples' wedding planning takes place online. That impressive stat points to the fact that couples want convenience as they prepare for their big days. Yet even in the age of e-commerce, many brides also want to "say yes to the dress" in person. By partnering with Generation Tux, David's Bridal is now extending the same courtesy to grooms. Unlike weddings of the past, where it was believed to be bad luck for the groom to see the bride before the ceremony, over three-quarters of surveyed couples who married in 2024 shared a "first look" before the ceremony, according to Brides. David's Bridal and Generation Tux appear to be capitalizing on this trend by inviting couples to shop together at the same store. Related: Another popular furniture retailer files Chapter 11 bankruptcy "We're thrilled to partner with David's Bridal to offer a seamless, head-to-toe wedding style experience for couples and their wedding parties," said Generation Tux President Jason Jackson. More Retail: Walmart CEO sounds alarm on a big problem for customersTarget makes a change that might scare Walmart, CostcoTop investor takes firm stance on troubled retail brandWalmart and Costco making major change affecting all customers In addition to the Generation Tux partnership, David's Bridal is rolling out a new store concept called Diamonds & Pearls, which will offer a more exclusive selection of merchandise that isn't available at other stores. The concept will debut in Delray Beach, Florida, with plans to expand. The company's new offerings come after it declared Chapter 11 bankruptcy in April 2023 with nearly $260 million in debt. It was acquired three months later by Cion Investment Corp., which lowered the retailer's debts to around $50 million and aimed to maintain up to 195 locations- and keep around 7,000 employees in their jobs. It wasn't the first time David's Bridal needed to take such measures. It also filed for Chapter 11 bankruptcy back in November 2018. A restructuring plan helped revive it, but like many other retailers, it wasn't prepared for the pandemic. Time will tell whether these new endeavors will bring about the happily-ever-after the bridal retailer has been hoping for. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
9 hours ago
- Yahoo
Patents and economies of scale support Pfizer's wide moat
Pfizer's innovative business should grow faster after it divests its off-patent division Upjohn in 2020 to create Viatris and Mylan. With fewer older medications and fewer patent losses, Pfizer is well-positioned for consistent growth, excluding the erratic sales of Covid-19-related products. The company is less vulnerable to any one patent loss thanks to its wide range of medications. Because of its more complex manufacturing process and more affordable prices, Pfizer's stronger position in the vaccine marketwhich includes the pneumococcal vaccine Prevnarmakes it more resilient to generic competition. Warning! GuruFocus has detected 6 Warning Signs with PFE. With a 30% to 80% reduction, Trump's executive order would establish a "most favored nation" policy in which the US would pay the same amount for prescription medications as the nation with the lowest price. It is anticipated that this policy, which was previously blocked by courts, will reduce the US's annual drug spending of over $400 billion, saving taxpayers over a seven-year period. Given that drug prices in the United States are high when compared to other countries, Pfizer's U.S. revenue could be drastically impacted by the 30% to 80% price cut, especially for high-margin medications. International reference pricing policies have long been opposed by the pharmaceutical industry, which claims they could hinder innovation and limit access to new companies anticipate that the order will target Medicare and may have an impact on medications not covered by Biden's Inflation Reduction Act. President Trump has said that significant tariffs on pharmaceutical products will probably be announced soon. He has also put a 90-day hold on broader tariffs for the majority of his trading partners to give them time to negotiate. Despite being mostly exempt from tariffs, the biopharma industry is preparing for a possible pharma-specific announcement that might affect global manufacturing strategies. Products made in Europe and imported into the US may be subject to the rumored 25% tariff, necessitating the construction of new facilities that will take years to complete. Due to home country manufacturing, tax benefits, lower production costs, and exposure to currency fluctuations, businesses based in the US and Europe are heavily exposed to European manufacturing. Because drug spending is not cyclical, the direct effect of tariffs on earnings is probably going to be minimal, and the indirect effect of a possible recession should also be minimal. With the exception of small-scale US capacity expansions, biopharma is unlikely to completely reevaluate its manufacturing footprint if pharmaceutical tariffs are implemented but are lifted after 2026 as a result of political pressure from the midterm elections. Leadership in Vaccines Pfizer stands out with its dominant position in vaccines, most notably its highly successful COVID-19 vaccine developed in partnership with BioNTech. This vaccine not only generated significant revenue but also established Pfizer as a leader in mRNA technology, a platform with potential applications in oncology, rare diseases, and beyond. Johnson & Johnson (J&J): J&J also developed a COVID-19 vaccine, but it was less widely adopted due to lower efficacy rates and safety concerns, giving Pfizer a clear advantage in this high-impact area. GlaxoSmithKline (GSK): GSK has a strong vaccine portfolio (e.g., shingles and meningitis vaccines) but did not independently develop a COVID-19 vaccine, relying on partnerships like Sanofi, which delayed its entry and diminished its competitive stance. Bristol Myers Squibb (BMS): BMS has no significant presence in vaccines, focusing instead on oncology and immunology, making Pfizer's vaccine leadership a unique strength. R&D Capabilities and Pipeline Focus Pfizer's R&D efforts are concentrated on high-growth therapeutic areas such as oncology, vaccines, and rare diseases. Its ability to leverage mRNA technology and rapidly develop innovative therapies underscores its R&D prowess. J&J: J&J's R&D spans pharmaceuticals, medical devices, and consumer health. While this diversification provides stability, it may dilute J&J's focus on cutting-edge pharmaceutical innovation compared to Pfizer's targeted approach. GSK: GSK excels in respiratory diseases and HIV research, but its pipeline is less broad and lacks the same level of innovation in emerging technologies like mRNA that Pfizer is advancing. BMS: BMS has a strong oncology pipeline, particularly in immuno-oncology, but its narrower focus limits its competitiveness in other high-growth areas where Pfizer thrives, such as vaccines and rare diseases. Global Reach and Market Presence Pfizer operates in over 150 countries, giving it a vast global footprint that enhances its ability to distribute products and capture market share across both developed and emerging markets. J&J: J&J also has a global presence, but its focus is split across pharmaceuticals, medical devices, and consumer health, potentially reducing its pharmaceutical market penetration compared to Pfizer. GSK: GSK is strong in Europe and emerging markets but less dominant in the U.S., the world's largest pharmaceutical market, where Pfizer has a significant advantage. BMS: BMS focuses heavily on the U.S. and Europe, with less presence in emerging markets, limiting its global scale compared to Pfizer. Brand Reputation and Trust The success of Pfizer's COVID-19 vaccine has significantly boosted its brand recognition and trust among consumers, healthcare providers, and governments, reinforcing its market position. J&J: J&J enjoys a strong reputation in consumer health, but its pharmaceutical division lacks the same level of visibility and trust as Pfizer's, particularly after COVID-19 vaccine challenges. GSK: GSK is well-regarded in respiratory and HIV treatments but does not have the broad public recognition that Pfizer has achieved. BMS: BMS is respected in oncology but lacks the widespread brand prominence that Pfizer has cultivated. Innovation in Emerging Technologies Pfizer's investment in mRNA technology positions it as a pioneer in pharmaceutical innovation, with potential applications in vaccines, cancer treatments, and more, giving it a forward-looking edge. J&J: J&J innovates in medical devices and consumer health but trails Pfizer in adopting next-generation pharmaceutical technologies like mRNA. GSK: GSK focuses on innovation in respiratory and HIV treatments but has not made significant advances in mRNA or other emerging platforms. BMS: BMS drives innovation in immuno-oncology but lacks Pfizer's breadth and leadership in cutting-edge technologies. Pfizer's competitive edge over Johnson & Johnson, GlaxoSmithKline, and Bristol Myers Squibb lies in its unmatched leadership in vaccines, particularly through mRNA technology, combined with a robust R&D pipeline, extensive global reach, substantial financial resources, strong brand reputation, and a focus on innovation. While J&J benefits from diversification, GSK from efficiency, and BMS from oncology expertise, none rival Pfizer's comprehensive strengths across these critical areas, ensuring its dominance in the pharmaceutical landscape. Pfizer's broad moat is supported by patents, economies of scale, and a strong distribution network. Strong pricing power derived from Pfizer's patent-protected medications allows the company to produce returns on investment that exceed its cost of capital. The company can develop the next generation of drugs before generic competition appears thanks to the patents. Furthermore, even though Pfizer has a wide range of products, there is some product concentration, as Prevnar accounts for slightly more than 10% of total sales (not including sales of the COVID-19 vaccine).However, because of the vaccine's complicated manufacturing process and comparatively low cost, we don't anticipate typical generic competition. Ibrance and Eliquis each account for nearly 10% of sales. On the other hand, we anticipate that new products will eventually lessen the competition from generic versions of important medications. In order to lessen the pressure on margins from lost sales of high-margin drugs, Pfizer's operating structure permits cost-cutting after patent losses. All things considered, Pfizer's well-established product line generates the massive cash flows required to cover the typical $800 million in development expenses for each new medication. For smaller pharmaceutical companies without Pfizer's resources, the company's robust distribution network positions it as a solid partner. On April 15, President Donald Trump issued an executive order outlining possible policy changes intended to reduce the cost of pharmaceuticals in the United States. The biopharma industry is looking forward to these changes because they have the potential to either help or hurt innovation. In the worst situation, international price benchmarks have the potential to drastically cut US drug prices and lessen financial incentives for international drug development. On the plus side, eliminating the "pill penalty" that only grants small molecule medications nine years of Medicare negotiation protection may promote innovation across all treatment modalities. Trump's executive order may have a positive or negative impact on the industry, but it has no effect on valuations or uncertainty ratings. The protection period is not specified in Trump's request that US Department of Health and Human Services Secretary Robert F. Kennedy Jr. collaborate with Congress to address the pill penalty, which is contingent upon Congressional action. Since innovation and a favorable mergers and acquisitions climate support long-term pricing power and offset possible short-term tariff pressure, rising tax rates, and approval delays, the biopharma industry seems undervalued. Due to liver damage in a clinical trial, Pfizer has announced the discontinuation of danuglipron, an oral small molecule GLP-1 agonist. In the anticipated $200 billion global GLP-1 market by 2031, the company sought to provide a potential second-to-market oral small molecule GLP-1 agonist, behind Lilly's orforglipron. Clinical trial failures and declining demand for Pfizer's COVID vaccine and antiviral medication have hurt the company's growth. Because of its diverse pipeline and portfolio, Pfizer is expected to have a wide-moat case, protecting it from the effects of individual program failures, especially those involving high-risk programs like danuglipron. Other medication candidates might benefit from Pfizer's objective of turning danuglipron into a once-daily business could use its $15 billion acquisition budget to fund the development of more sophisticated medication candidates. Efforts in Genetic Engineering: A solid growth driver for Pfizer is the strong pipeline of innovative treatment options, especially in oncology and immunology, which take the leap with cutting-edge scientific technology. To be more specific, Pfizer's resource allocation to immuno-oncology is evident, developing of checkpoint inhibitors (e.g., PD-1/PD-L1 inhibitors) and chimeric antigen receptor T-cell (CAR-T) therapies. For instance, this method of treatment mitigates the immune system's ability to detect and destroy the specified cancer cells by varying the immune system response or, in some cases, by using specially modified T-cells that can identify the particular antigens on tumors that are solely expressed in those particular tumors, which are in question. This is the area of advancement where Pfizer has outdone the rest as they are perfecting monoclonal antibody formatsdesigning them in a way that they will bind more tightly and specifically to targets using protein engineeringand they are also testing out bispecific antibodies that trigger switches at two targets, therefore enhancing healing by more than one method. The pipeline is further supported by vast R&D investment in gene therapy and precision medicine, which utilize adeno-associated virus (AAV) vector platforms for gene delivery and next-generation sequencing for actionable mutation identification respectively. These endeavors are aimed at enhancing the overall patient health and market potential of the drugs by changing the treatment convention from testing a wide spectrum to one that is genotype-driven. Clinical trials are usually designed in a way to be fast-tracked so that they can move quickly to the next stage of development. By focusing on such advanced technologies, Pfizer is embarking on capturing a large section of the market with high-growth therapeutic branches, thus gaining revenue through innovation guided by complex disease biology. Revenue Growth: The launching of these high-value treatments is expected to increase revenue as well as drive down costs for Pfizer. Most of the drugs that are released in the onco-immunology field possess a technical edge and therapeutic effectiveness, therefore, these new treatements often demand high price. These drugs are capable of pumping up profits significantly once they clear regulatory hurdles and find their way onto the market. take the example of just-above successful immuno-oncology drug sales, which always have brisk selling and marvelous sales. In addition, Pfizer can speed-up the whole clinical process with something like adaptive trial designs, this process will be quicker and thus benefits are obtained faster from the new products. Impact on profitability The weight on profitability depends on the ratio of costs and returns. What is actually known is that lamas like the checkpoint inhibitors and CAR-T treatments that are so good require a lot of investment in R&D. But there is an inherent advantage for these drugs thanks to their patent protection that comes with market exclusivity, which in turn, allows Pfizer to keep its pricing strategy stick and generate very high profits. Success in the selling of the product along the lines of this new dimension along with the efficiency of producing more could prove to be the road to better profitability. However, there are barriers such as competition from other drug companies plus the worry of the price cuts from payers that can erode this success. So if Pfizer is able to eliminate the competition and stays ahead in the game by reducing costs as well, these high markups brought about by the introduction of such innovative drugs should positively affect the total profitability of the company. Generic competition, possible changes to government drug pricing policies, the more stringent FDA, and more powerful managed-care and pharmacy benefit managers present Pfizer with difficulties in drug development. In some disease areas, developing new drugs is getting harder, and pharmacy benefit managers and managed-care organizations have grown to be strong players with the ability to bargain for cheaper drug costs. Nearly one-fourth of the company's total sales are generated by its medications, Eliquis, Ibrance, and Xtandi, and they are heavily exposed to the Medicare channel. Given that Pfizer's product portfolio is less vulnerable to potential litigation, the company's base-case annual legal costs, assuming a 50% probability of future costs associated with product governance ESG risks, come close to 1% of non-GAAP net income. Pfizer's valuation multiples highlights their strong financial position and potential undervaluation. Their P/E Non-GAAP ratios7.61 (FY1), 7.42 (FY2), and 7.44 (FY3)are lower than JNJ's 14.00 (FY1) and SNY's 10.80 (FY1), suggesting investors may undervalue our earnings potential. The PEG Non-GAAP (FWD) of 1.49 is competitive, higher than SNY's 0.76 but below JNJ's 1.70, reflecting moderate growth prospects. Pfizer's EV/Sales (TTM) of 2.81 is more conservative than JNJ's 4.21, while the EV/EBITDA (FWD) of 7.13 compares favorably to JNJ's 11.45, indicating operational efficiency. The Price to Book (TTM) of 1.44 is significantly lower than JNJ's 5.23, and our Price to Cash Flow (TTM) of 9.29 beats JNJ's 15.67, underscoring robust cash flow generation. These metrics position Pfizer as a value opportunity among peers After the Seagen acquisition, Pfizer released its 2024 guidance, which included a $8 billion COVID-19 product guidance$5 billion less than anticipated. The business admitted that, excluding sales of COVID-19 products, it would not meet the prior growth-rate projection of 6% from 2020 to 2025. Pfizer reaffirmed its support for the dividend, which is regarded as safe and likely to boost stock valuation, despite the deteriorating outlook. Over the next ten years, the company anticipates steady sales as new products counteract older medications that are losing their patent protection. From the middle of 2023 to the end of 2024, Pfizer is anticipated to reduce operating expenses by $4 billion, which will aid the company in adjusting to the waning pandemic and declining sales of COVID-19 products. Growth could be accelerated through acquisitions, and future margin pressure could be reduced through restructuring initiatives. It is estimated that Pfizer's weighted average cost of capital is 7% and its cost of equity is 7.5%. Activist investor Jeffrey Smith's recent stake worth $407 million could presage the much needed turnarounds at Pfizer. Investors and shareholders can reasonably expect further cost-cuts and an efficient use of capital, leading to higher margins and free cashflow. This case could follow the path of Walt Disney, albeit with less drama, where Jeff Ubben of ValueAct had a pivotal role in Disney's turnaround campaign. The large-cap biopharma company Pfizer's debt size, business cyclicality, and debt maturity outlook all contribute to its sound balance sheet and low risk levels. To support opportunistic acquisitions and handle product litigation issues with little market concern, the company should have a strong enough balance sheet. Pfizer spends slightly less on R&D than the industry average, with a mid- to high-teens percentage of sales. Patent losses are offset by the company's robust pipeline of next-generation medications. The company's investment in cutting-edge new medications, mostly aimed at immunology and oncology, improves its standing and increases returns on capital. For biopharma companies in the sector, this balance sheet strength is essential. This article first appeared on GuruFocus. Sign in to access your portfolio
