This past week’s news from www.ocbj.com and other sources
TOP STORY
Irvine-based Allergan Inc. is paying $600 million and pleading guilty to a misdemeanor charge to settle a government probe of its marketing practices for flagship drug Botox. Allergan is paying $375 million to settle a charge that Botox was “misbranded” and did not include labeling information for treating unapproved conditions suggested by the company’s marketing. Allergan also is paying $225 million to resolve a related Justice Department lawsuit. The government probe had to do with what is known as off-label usage of Botox to treat headaches, pain, muscle stiffness and juvenile cerebral palsy.
Irvine-based Integrien Corp., a maker of software for online transactions, is being acquired by Palo Alto’s VMware Inc., a maker of virtualization software. VMware agreed to buy Integrien and Los Gatos-based TriCipher Inc., a maker of identity and access management software, for undisclosed terms. A report on technology news website Socaltech.com pegged the Integrien deal at about $102 million, citing “sources close to Integrien.” Both acquisitions are expected to close in the current quarter.
TECHNOLOGY
Aliso Viejo-based Quest Software Inc., a maker of business software that helps companies be more efficient, was hit with a countersuit after the company filed patent infringement complaints against two competitors two weeks ago. Sunnyvale-based Centrify Corp., which makes business software that improves upon Microsoft Corp.’s Active Directory, filed a patent infringement lawsuit against Quest in Northern California. Centrify is seeking damages and an injunction on the alleged infringing products.
HEALTHCARE
Foothill Ranch-based Skilled Healthcare Group Inc. saw its shares yo-yo last week amid moves in a lawsuit against it. Early last week, a judge denied Skilled’s motion for a mistrial over a jury verdict that found Skilled liable for $677 million in damages for alleged mismanagement of 22 California nursing facilities. The company had contended that a juror lied on a sworn questionnaire about connections to one of the case’s plaintiffs and to one of its defendant facilities. Skilled’s shares then rebounded after a hearing was rescheduled for this week as the company explores a settlement of the potentially crippling suit.
Aliso Viejo-based drug maker Valeant Pharmaceuticals International saw the Food and Drug Administration delay a review of epilepsy drug candidate ezogabine, which the company is pursuing with GlaxoSmithKline PLC. The review now is scheduled for Nov. 30. An FDA advisory panel signed off on ezogabine in early August.
Smile Brands Inc. is relocating its headquarters from Santa Ana to a 15-story office tower in the Irvine Spectrum. The services provider to dental practices signed a lease to occupy nearly 50,000 square feet at 8105 Irvine Center Drive, according to landlord Irvine Company. Some 230 of Smile Brands’ employees will be housed in the new space, which includes the entire 15th floor and a portion of the first.
REAL ESTATE
Aliso Viejo-based hotel owner Sunstone Hotel Investors Inc. called off plans to buy Southern California’s largest hotel, the 1,625-room Manchester Grand Hyatt in downtown San Diego. In an e-mail to the San Diego Unified Port District, the Grand Hyatt’s landlord, a lawyer for developer and owner Doug Manchester said the estimated $580 million deal with Sunstone had been terminated. Sunstone apparently made “material changes” to the terms of the initial agreement, according to reports. Manchester was expected to get a minority stake in Sunstone if the company ended up buying the hotel.
An investment offshoot of Santa Ana-based Grubb & Ellis Co. is buying nine apartment complexes in North Carolina, Tennessee and Texas and a related property management business. Grubb & Ellis Apartment REIT Inc. is buying close to 2,700 apartments from Oakton, Va.-based MR Holdings LLC for $176.9 million. It’s also buying MR Holdings’ property management business for $5.5 million.
APPAREL
Huntington Beach-based clothing maker Quiksilver Inc. reported a quarterly profit of $12.5 million that topped Wall Street’s expectations of $3.7 million and said it reworked a credit line with a lower interest rate. Sales were $441.5 million, down 12% from a year earlier and shy of the $442.9 million expected by Wall Street. The company’s shares slumped last week as Quiksilver forecast another quarter of higher profits driven by cost cutting but more falling sales amid a continued weak clothing market.
Foothill Ranch-based mall retailer Wet Seal Inc. reversed four months of falling sales with a 1.1% gain in August same-store sales that topped Wall Street expectations. Analysts were looking for a 3.5% drop in sales at stores open at least a year. Total sales were $52.6 million, up 4.2% from a year earlier.
OTHER NEWS
Japan’s NGK Spark Plug Co. is moving production of its spark plugs from a longtime Irvine factory to West Virginia. The company plans to quit making spark plugs for autos and other vehicles in Irvine by May. The local facility, which serves as the U.S. headquarters for NGK, is set to continue operating as a West Coast distribution center. It’s unclear how many Irvine jobs will be impacted. The company is expected to add 40 to 50 workers at a plant near Charleston, W. Va., which now has about 300 employees.
