* Amgen (AMGN)

-The FDA classified Amgen’s Prolia complete response as a Class 2 resubmission, meaning the FDA set a Prescription Drug User Fee Act (PDUFA) action date of July 25, 2010. Amgen was seeking approval in the treatment and prevention of postmenopausal osteoporosis in October of last year. Some had hoped for a Class 1 designation (two-month review instead of six). Most analysts remain confident that the FDA will approve Prolia.

-The FDA approved a Risk Evaluation and Mitigation Strategy (REMS) program from Amgen and JNJ that will monitor ESAs used to treat anemia in cancer patients undergoing chemotherapy. The program requires doctors to register and undergo training on the risks and benefits of the drugs in order to continue prescribing them. The program starts March 24 th. It does NOT require patient registry or stricter regulation.

-A third study on d-mab in preventing skeletal complications in cancer patients compared to Zometa indicated positive results. Amgen will present full data from the study at the American Society for Clinical Oncology meeting in June.

-The US FDA accepted Teva’s application to sell the biosimilar of Neupogen. Teva already sells the biosimilar in Europe. The European patent expired in 2006. The US patent covers the drug until 2013 and Amgen has already filed claim against Teva’s US application.

-BusinessWeek 1/25/10 “Strengthening Bones, Weakening Cancer.”

*Prolia will likely be approved for the osteoporosis indication, but the opportunity is most likely in oncology.

-UBS maintains a buy on AMGN with a target of $70.

* Bank of New York Mellon

-BK has agreed to acquire the corporate trust business of CIBC Mellon. The acquisition will more than double BK’s share of the corporate trust market in Canada.

* Berkshire Hathaway

-WSJ 2/27/10 “The Next Oracle of Omaha: Berkshire’s Mr. Sokol?”

*There is a growing expectation that David Sokol will be next in line after Buffett. Such speculation shot higher after Mr. Buffett appointed Mr. Sokol to take over flagging jet-rental company NetJets Inc.

*Some Berkshire watchers speculate that Mr. Buffett has held back from naming Mr. Sokol his successor because he remains undecided about whether he is the best man for the job.

* Boeing

-The Defense Department said that the pace of cutting costly or badly performing weapons contracts should slow as the Obama administration has largely already targeted problematic and unnecessary programs. The department said defense spending wouldn’t grow as strongly as it did in the years after 9/11, but it will still keep rising year-on-year.

-WSJ 2/20/10 “Airline Woes Press Jet Makers”

*Airlines worldwide, despite improving traffic, still face a cash squeeze that is forcing jet makers Airbus and BA to work harder to keep their factories busy.

-The Pentagon reopened a contest to supply new airborne refueling tankers. The department of Defense tweaked the bidding rules to simplify requirements, but analysts said the changes may not be enough to tempt Northrop Grumman into competition with BA.

-United Airlines finalized its order to buy 25 of BA’s 787 Dreamliners with an option to buy another 50. United, the third-largest U.S. airline by traffic, hadn’t ordered new aircraft for 11 years.

* BP

-BP’s chief economist believes that oil inventories should return close to normal levels from their current historical highs by the summer provided OPEC maintains quota disciplines.

-BP is leaving the U.S. Climate Action Partnership. U.S. oil and gas companies have balked at climate legislation, which they say would impose undue burdens on refiners while giving an unfair break to coal producers.

-TNK-BP will invest $1.8B until 2012 to increase production in East Siberia. Of the total investments, $1.7B will be spent on the company’s two upstream projects, both located in East Siberia.

-BP, along with Iraq’s South Oil Co., has announced a tender to drill 56 wells and work on several others as part of the company’s 2010 program to develop Rumaila, Iraq’s largest field. The BP-led consortium has pledged to almost triple production at the field to 2.85M barrels a day.

-BP is expected to invest more than $2B in Value Creation Inc’s oil-sands project in Alberta. Though the final terms could change, at this stage BP is expected to pay $500M for a 75% working interest in Value Creation’s project plus a commitment to invest an additional $1.6B to help develop the project.

-TNK-BP plans to increase hydrocarbon production by 2.5% this year.

* Bristol-Myers (BMY)

-The U.K.’s health-cost regulator would not recommend BMY’s Sprycel (myeloid leukemia) for use within the state-run National Health Service in England and Wales due to its high cost.

-BMY said it would freeze its employees’ salaries for one year. There was no explanation for the freeze.

-A BMY employee was charged with stealing trade secrets and proprietary information. Indications are that the former employee had plans to start a pharmaceutical firm in his native India to compete with BMY.

-BMY is providing a business update on March 4 th.

-UBS has a neutral rating on BMY with a target of $27.

* Caterpillar

-CAT said that retail machinery and engine sales improved in the three months ended Jan. 31 from the previous three months. The company still reported double-digit percentage declines for both of its largest segments, but the trend improved across all regions. Global machinery sales fell 27% while engines sales were down 33%.

* CVS Caremark (CVS)

-CVS reported adjusted 4Q EPS of $0.79 vs. $0.70. Estimates were $0.78. 4Q revenue was up 7% to $25.8B. Analysts were expecting revenue of $26.22B. Retail pharmacy sales were up 4.5% to $14.5B. Pharmacy revenue was up 14.5%.

-For 2009, revenue was up 12.9% to $98.7B. Profit was up 16% to $3.7B, or $2.55/share compared to $2.18/share.

-4Q details:

*4Q same-store sales rose 4.9% (front-end +0.3%, pharmacy +7.3%). Pharmacy same-store sales were negatively impacted by approximately 290 bps due to generic introductions. WAG and RAD have been reporting same-store sales declines in recent months.

*CVS did not give an update on the FTC investigation into its sales practices.

*CVS has 7,025 drugstores, about 100 less than WAG.

*CVS is more optimistic about its 2011 PBM selling season. The division is now under the leadership of Per Lofberg.

-Walgreen Co. announced that it is buying the drugstore chain Duane Reade Holdings for $1B. The cash deal is expected to close August 31 st. Duane Reade has 257 locations in New York City. The purchase gives WAG a better opportunity to compete with CVS in the region.

-BusinessWeek Feb. 1 & 8, 2010 “Good for What Ails Only You.”

*Gene-based services are making personalized medicine a reality.

-Bloomberg 2/5/10 “CVS May Get Earnings ‘Windfall’ From Lipitor, Plavix Generics.”

-Barron’s 2/8/10 “Impressed by CVS.”

-Barron’s 2/8/10 “Good Buys For Bad Times.”

-Barron’s 2/22/10 “Walgreen Finds The Right Remedy For Tough Times.”

-Goldman Sachs cut CVS from its Conviction Buy List. The price target is $36.

* Devon

-DVN reported a profit of $667, or $1.49 a share, compared with a prior-year loss of $6.8B, or $15.42 a share. Excluding items including the write-down, earnings jumped to $1.60 from $0.67 a share. Revenue decreased 4.2% to $2.45B. Average daily natural-gas production also declined 8.7% as realized prices, excluding hedging effects, fell 28%. Analysts expected earnings of $1.25 on revenue of $2.21B.

*The bottom line benefited from depreciation, depletion and amortization costs being halved.

*The company’s lease operating expenses fell 17% to $404M.

*North American production rose more than 6% in 2009 to 220M BOE per day, while estimated onshore proved reserves in North America went up by20% to a record 2.64B BOE.

* General Electric

-GE and Juice Technologies announced a joint development agreement to create intelligent plug-in electric vehicle charging devices for U.S. and global markets. The chargers integrate GE’s smart meters with Juice Technology’s Plug Smart engine to help consumers charge their cars during low-demand, lower cost time periods.

-The dominance of U.S. athletes at the Winter Olympics in Vancouver has translated into a much-needed boost in ratings and advertising revenue for NBC, and could put a dent in the $250M the network had expected to lose on the event.

-GE will sell its $3.3B stake in Turkey’s Garanti Bankasi. GE has a 20.8% stake in Garanti, the most actively traded stock on the Istanbul exchange and Turkey’s largest listed lender by market value. GE bought a 25.5% stake from Turkish investment firm Dogus Group for $1.6B in 2005, then sold part of its holding back to Dogus in 2007.

* Honda

-Honda & Subaru named best all-around vehicle producers by Consumer Reports

-Acura wins ALG’s 2010 Residual Value Award for Best Luxury Brand

-Honda expands recall for replacement of driver’s side airbag inflator of certain 2001 & 2002 vehicles. About 400,000 vehicles are affected in the U.S.

-Launching of the Wave 110i in Bangkok, Thailand. The Wave 110i is a small commuter motorcycle sold in Asia

-CR-Z hybrid released in Tokyo, Japan. U.S. release date is 2011. The Honda CR-Z is a lightweight sports car with a Honda petrol-electric hybrid system

-Any further appreciation of the Yen would affect Honda adversely – the forecast for 2010 is around 90 yen per US dollar

-Honda sets all-time monthly record for production in Asia – 91,704 units, which is a 68.8% increase from 2009

-Auto demand increasing in China & India; Honda is building a second plant in China, which will begin production in 2012

-HMC sold a record 580,000 vehicles in China last year, up 22% on the year. Under a conservative estimate, the company expects to sell slightly more than 630,000 units in 2010, up 9%.

* Johnson & Johnson (JNJ)

-S&P lowered its AAA rating on Berkshire Hathaway. ADP, XOM, JNJ and MSFT still carry the AAA rating.

-JNJ slipped to the number 2 spot on Barron’s “Most Respected Companies” list. Berkshire Hathaway dropped to 5 th, from 2 nd. WMT fell from fifth place to No. 12.

-JNJ is giving Basilea the full rights to ceftobiprole. Financial details were not disclosed.

-JNJ is cutting the yearly performance bonus targets for 38% of its employees and freezing salaries for a number of other workers. JNJ said the cost savings were minimal and the move was to create a “global compensation program.”

* McDonald’s (MCD)

-MCD reported that January same-store sales were up 2.6%. Sales were down 0.7% in the US, while they rose 4.3% in Europe and 4.3% in Asia. Results in the US were negatively impacted by the weather. It is estimated that weather impacted US results by more than 1%. Analysts were generally pleased with the results. MCD has been gaining market share and is significantly outperforming its peers. MCD said results are benefiting from the debut of the breakfast dollar menu and the Mac Snack Wrap.

-MCD plans to close about 430 restaurants in Japan that are operated by an affiliate. MCD will record $40-$50 million in charges in the first half of the year due to the closings.

-Burger King plans to introduce a premium burger (Steakhouse XT burger line) and ribs. BKC is also adding to its breakfast menu with more value items.

-Burger King plans to raise the price of its double cheeseburger to $1.19 in April (currently offered at $1). Burger King will introduce a “Dollar Double”, which much like MCD’s McDouble, is two patties with one slice of cheese for $1. BKC said it would also raise the price of its $1 Whopper Jr.

-Burger King will be selling Starbucks Seattle’s Best Coffee in September. Seattle’s Best will replace BK Joe coffee. The offerings will include hot and iced drinks.

-MCD is testing $2.99 combos called “Mini Meals” in some markets on the West Coast. MCD is looking at weaning customers off the $1 menu to high-margin sides.

-Goldman put MCD on its conviction buy list with a target of $75.

-BofA/Merrill maintains a buy on MCD with a target of $71.

* Microsoft

-MSFT announced the release of a new version of its smartphone operating system, Windows Phone 7 Series. This version of its mobile operating system will have a newly deigned homescreen and elements from MSFT’s Zune HD music player and Xbox console.

-MSFT is weaving popular social networking services into its latest generation of Outlook. Software that channels LinkedIn updates to Outlook inboxes was available online for people dabbling with a test version of the program. MSFT is working with Facebook and MySpace to do the same with content from those online communities.

-MSFT and Yahoo won clearance from the U.S. Department of Justice and European Commission to implement their proposed Internet search alliance. Under the terms of the10-year partnership, MSFT’s Bing will become the search engine on Yahoo Web sites, leaving Yahoo to focus on display advertising, core news, finance and sports reports.

-MSFT said it reached a patent licensing agreement with AMZN that covers the use of open-source software in Amazon products, including its Kindle electronic book reader and servers based on the Linux operating system.

* Pfizer (PFE)

-PFE reported adjusted 4Q EPS of $0.49 vs. $0.65. Estimates were $0.50. 4Q revenue was up 34% to $16.54B. The Wyeth purchase contributed $3.3B to 4Q revenue. For 2009, revenue was up 4% to $50B. 2009 adjusted EPS was down 17% to $2.02.

-4Q details:

*PFE said the EPS miss was due to higher costs associated with the WYE purchase.

*PFE sold off following the 4Q release due to the miss and disappointing guidance. For 2010, PFE is forecasting revenue of $67B-$69B. The 2010 adjusted EPS forecast is $2.10-$2.20. Analysts were expecting 2010 EPS of $2.27 on revenue of $67.48B.

*PFE said the strengthening dollar would negatively impact EPS by $0.06 this year. In the 4Q, US revenues represented approximately 45% compared to 42% a year ago.

*For 2012, PFE is projecting revenue of $66B-$68.5B and adjusted EPS of $2.25-$2.35. 2012 is the first full year without patent protection for Lipitor, which losses protection in November 2011. Previously, PFE had forecast 2012 revenue of $70B. PFE said the difference was due to additional sales of Wyeth’s animal health businesses and rights that were returned on a WYE developmental drug. Also, PFE plans to reinvest more cost savings from the WYE deal into emerging markets and new product launches.

*With the WYE purchase, PFE is cutting 19,000 positions and closing manufacturing plants and six research facilities. PFE plans to cut its R&D by $3B by 2012. PFE is forecasting a 2012 R&D budget of $8B-$8.5B. The cuts are part of the total $7B in savings PFE expects.

*With the WYE Purchase, PFE now operates under two organizations. 1. Biopharmaceutical (Primary Care, Specialty Care, Established Products, Emerging Markets and Oncology). 2. Diversified (Animal Health, Consumer Healthcare, Capsugel and Nutrition).

*4Q Lipitor sales were up 1% WW to $3.175B. They were down 6% in the US to $1.522B.

*4Q Lyrica sales were up 17% WW to $820 million.

*4Q Celebrex sales were up 1% WW to $669 million. Celebrex sales were down 4% in the US to $467 million for the quarter.

*4Q sales of Sutent were 33% to $293 million.

*In the quarter, PFE recorded $378 million in sales of Enbrel (outside the US and Canada). Prevnar sales were $287 million.

-PFE may release new research on its Alzheimer’s treatment Dimebon in the first week on March. Analysts are expecting PFE to file for approval next year. PFE is licensing the drug from Medivation.

-The FDA has asked PFE and Eisai to immediately stop two television ads for Aricept because the agency believes the ads for the Alzheimer’s treatment are misleading.

-A recent study indicates that popular cholesterol-reducing drugs like Lipitor also increase diabetes rates by approximately 9%. The risk has been associated with the entire class of drugs.

-PFE’s Jeffrey Kindler has been re-elected to the Federal Reserve Bank of New York’s board.

-WSJ 2/5/10 “Pfizer’s Bad Political Bet.”

*Kindler’s support behind big pharma’s $80B deal on healthcare reform is looking poor.

-Barron’s 2/12/10 “Jump Into the Big Pharma Pullback.”

*Credit Suisse sees the selloff in PFE, following the 4Q release, as an opportunity. The target was lowered to $24, down from $25.

-Barron’s 2/15/10 “More Signs of Recovery At Pfizer.”

* Verizon

-24 mobile operators said they had formed an alliance to build an open platform to deliver applications to any mobile device, in an attempt to emulate the success of Apple Inc’s App Store. The Wholesale Applications Community includes AT&T, VZ and Sprint.

-VZ’s CTO said the rollout of the firm’s fourth-generation in the U.S. is running on schedule and the group will likely meet its 2010 deadline to launch commercial services of the new technology.

-VZ unveiled a Skype application enabling free domestic and cheap international calls for anyone with a data service plan. One oft-voiced concern is whether a carrier can handle the increased traffic from such a program; VZ insists the program won’t hurt the quality of the network.

* Wal-Mart (WMT)

-WMT reported adjusted 4Q EPS of $1.17 vs. $1.03. Estimates were $1.12. Sales were up 4.6% to $112.8B. Analysts were expecting revenue of $114.36B. 4Q profit was $4.63B compared to $3.79B. For the 2010, adjusted EPS was $3.66 compared to $3.42. 2010 sales came in at $405B, with international exceeding $100B. 2010 sales were up 1% compared to 2009.

-4Q details:

*4Q same-store sales fell 1.6% (Wal-Mart –2%, Sam’s +0.7%). WMT had projected a range of -1% to +1%. The decline caught the street by surprise. WMT said the decline was due primarily to deflation in grocery and electronics.

*WMT said it expects 1Q2011 same-store sales to be anywhere from –1.0% to +1.0%. WMT is forecasting 1Q EPS of $0.81-$0.85. The street is looking for $0.85. WMT reports 1Q results on May 18 th.

*For the year, WMT is projecting $3.90-$4.00. The street is looking for 2011 EPS of $3.97.

*WMT expects the 1Q to be more challenging in the US as the company cycles through strong Y-O-Y comparisons and deflation. The unemployment situation will also play a role.

*During the quarter WMT closed 10 underperforming Sam’s Clubs.

*Going forward, WMT is expecting cost benefits from the new global sourcing team. The company is also seeing great potential from its e-commerce operations.

*Despite electronics price deflation, WMT said it did gain market share. WMT has expanded its high-end offerings.

*WMT expects to have more than 50% of its store base remodeled by the end of the 3Q.

*Debt-to-cap was at 36.9%, down from 39%. WMT still continues to target 40%.

-WMT had to close 10 stores due to weather in the East.

-WMT said it is cutting 300 positions at its headquarters. WMT employs 12,000 at its headquarters.

-The New York Times reported that WMT is buying the online-movie service Vudu. Terms of the purchase have not been disclosed, but some have speculated it is in the neighborhood of $100 million. WMT is said to be disclosing the purchase in March. WMT has tried for years to compete with Netflix. In 2005, WMT sent it customers to Netflix. In 2007, WMT launched a download service. WMT abandoned the download service in less than one year. The Vudu digital service is accessible through certain TV sets or Blu-Ray players. WMT sold almost 15% of the flat-panel TV’s in the 3Q. WMT’s clout with TV manufacturers makes it likely that the number of TV’s compatible with Vudu will increase.

-UBS maintains its buy rating on WMT. The target is unchanged at $64.

* Zimmer (ZMH)

-WSJ 2/18/10 “FDA Memo Hints at Curbs to Approval Process for Medical Devices.”

-Obama’s health-overhaul keeps a $20B tax on medical device-companies, but has a start date in 2013. The Senate bill had a start date of 2011.

* Retail

-On average, retailers reported that January same-store sales rose 3.3% (WMT is not included in the average). Thomsen Reuters was expecting a gain of 2.5%.

* Fixed Income News

-Foreign demand for US Treasuries declined by the largest amount on record in December. China reduced its holding by $34.2B, making Japan the top foreign owner of US Treasuries. Japan also reduced its holdings.

* Energy

-The House Energy and Commerce Committee has begun an investigation into the potential impacts of hydrofracking on the environment and human health. Environmentalists and some lawmakers are pressing to give the EPA federal oversight of the process. State regulators and the natural gas industry have been fighting against federal regulating, saying it could prevent or delay development of trillions of cubic feet of new resources.