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AstraZeneca Explores Drugmaker Alliances to Spread Cost, Risks – Bloomberg.com Updated:New York, Dec 10 07:59London, Dec 10 12:59Tokyo, Dec 10 21:59 SYMBOL LOOKUP FEEDBACKHOMENEWSEXCLUSIVEWORLDWIDEREGIONSMARKETSINDUSTRIESECONOMYPOLITICSLAWENVIRONMENTSCIENCEOPINIONSPENDSPORTSARTS AND CULTUREEDITORS’ VIDEO PICKSBLOOMBERG MARKETS MAGAZINESPECIAL REPORTMARKET DATASTOCKSRATES & Tiffany NecklacesBONDSCURRENCIESMUTUAL FUNDSETFsCOMMODITIESECONOMIC CALENDARPERSONAL FINANCEJANE BRYANT QUINNJOHN DORFMANPORTFOLIO TRACKERCALCULATORSFINANCIAL GLOSSARYTV and RADIOBLOOMBERG TELEVISIONBLOOMBERG TELEVISION SYNDICATED REPORTSBLOOMBERG RADIOBLOOMBERG PODCASTSBLOOMBERG SHOWSCEO SPOTLIGHTCFO INSIGHTPORTFOLIO MATTERSMOBILEBUSINESSWEEKBUSINESS EXCHANGEBloomberg InnovatorsTechnologyCurrenciesForex Trading VideosETFsCEOCommoditiesExclusiveWorldwideRegionsMarketsIndustriesEconomyPoliticsLawEnvironmentScienceOpinionSpendSportsArts and CultureEditors’ Video PicksBloomberg Markets MagazineSpecial ReportRESOURCES Bloomberg TV Bloomberg Radio Bloomberg PodcastsBloomberg Press More News • Gundlach Turmoil May Delay Societe Generale’s Plans for TCW Spinoff or IPO • `Virtuous Cycle’ Lifting South Korea Economy as Won Decline Boosts Samsung • GM’s Buick-GMC Chief Said to Leave Automaker Eight Days After Being Hired AstraZeneca Explores Drugmaker Alliances to Spread Cost, Risks Share Business ExchangeTwitterFacebook| Email | Print |A A A By Trista Kelley Dec. 10 (Bloomberg) — AstraZeneca Plc is in “exploratorydiscussions” with competitors for partnerships that would helpease the cost and risk of developing new medicines, said ShaunGrady, vice president of corporate business development. “We’re working together to get more out of sharing therisk and sharing the cost,” said Grady in a Dec. 8 telephoneinterview from London, where the company is based. “We’relooking across the spectrum, but our focus is late-stage assets.Tiffany EarringsThat’s where we can make the most difference with the businessshape going forward right now.” AstraZeneca, Eli Lilly & Co. and Bristol-Myers Squibb Co.are the “worst positioned” to overcome the so-called patentcliff drugmakers will encounter in the next five years, when 9of the world’s 10 biggest drugs lose market exclusivity, SanfordC. Bernstein analyst Tim Anderson wrote in a Dec. 8 note. Medicines that generated 62 percent of AstraZeneca’s 2008revenue face competition from lower-priced copies by 2014,according to Bloomberg data. Its Nexium heartburn drug, rankedeighth among the top-selling drugs in 2008 with $5.2 billion inrevenue, will lose patent protection starting next year. AstraZeneca has stepped up the hunt for new products sincepaying $15 billion for MedImmune Inc. in 2007, signing threelicensing partnerships in the last six months. The most recentwas last week’s contract to develop a Targacept Inc. depressiondrug in a transaction valued at as much as $1.24 billion. TheU.K. drugmaker prefers licensing deals to acquisitions and plansto announce at least one more partnership before the end of theyear, said Grady. Diabetes Alliance The executive pointed to two examples of the type of dealAstraZeneca is looking for: a 2007 partnership with Bristol-Myers Squibb Co. to develop Onglyza, a diabetes medicine thatwon U.S. approval in July, and a June alliance with Merck & Co.to develop a combination of their cancer-fighting compounds. The executive declined to give names of potential partnersor discuss disease areas in which he sees gaps. “Each therapy area has its own externalization strategy,”said Grady. “They’ll look at their own assets and if there aregaps or omissions, we tend to keep an eye out. We know whatwe’re good at and we’re concentrating on areas of strength.” The company doesn’t plan any “significant foray” beyondits key disease areas, which include cancer, respiratoryillnesses and mental illness, Grady said. The U.K. drugmaker doesn’t have a large vaccine or consumerproduct unit that rivals GlaxoSmithKline Plc and Sanofi-AventisSA are relying on to cushion looming patent expirations. “We don’t look at it in terms of the sales we need toreplace,” Grady said. “We believe these projects have a goodprobability of success and will make a big difference in theshort- and near-term.” To contact the reporter on this story:Trista Kelley in London at tkelley2@bloomberg.net Last Updated: December 9, 2009 19:01 ESTtiffany silver earrings

Gross Set for Record Book as Manager of Biggest Fund in History – Bloomberg.com Updated:New York, Dec 10 07:59London, Dec 10 12:59Tokyo, Dec 10 21:59 SYMBOL LOOKUP FEEDBACKHOMENEWSEXCLUSIVEWORLDWIDEREGIONSMARKETSINDUSTRIESECONOMYPOLITICSLAWENVIRONMENTSCIENCEOPINIONSPENDSPORTSARTS AND CULTUREEDITORS’ VIDEO PICKSBLOOMBERG MARKETS MAGAZINESPECIAL REPORTMARKET DATASTOCKSRATES & BONDSCURRENCIESMUTUAL FUNDSETFsCOMMODITIESECONOMIC CALENDARPERSONAL FINANCEJANE BRYANT QUINNJOHN DORFMANPORTFOLIO TRACKERCALCULATORSFINANCIAL GLOSSARYTV and RADIOBLOOMBERG TELEVISIONBLOOMBERG TELEVISION SYNDICATED REPORTSBLOOMBERG RADIOBLOOMBERG PODCASTSBLOOMBERG SHOWSCEO SPOTLIGHTCFO INSIGHTPORTFOLIO MATTERSMOBILEBUSINESSWEEKBUSINESS EXCHANGEBloomberg InnovatorsTechnologyCurrenciesForex Trading VideosETFsCEOCommoditiesJane Bryant QuinnJohn DorfmanPortfolio TrackerCalculatorsFinancial GlossaryRESOURCES Bloomberg TV Bloomberg RadioAudio/Video Reports Bloomberg PodcastsBloomberg Markets MagazineBloomberg Press More News • Convenience Checks Turn Inconvenient When Cuts to Card Limits Trigger Fees • Homeowners in U.S. Lost $5.9 Trillion Since 2006 as Defaults Cut Values • Pimco Says `Fear Not,’ Weaker Dollar Will Spur Growth, Keep Reserve Status Gross Set for Record Book as Manager of Biggest Fund in History Share Business ExchangeTwitterFacebook| Email | Print |A A A By Charles Stein Dec. 9 (Bloomberg) — Pimco Total Return Fund, run by BillGross since its inception in 1987, is set to become the biggestmutual fund in the industry’s history as individual investorsmostly sit out the 2009 stock rally for the safety of bonds. Based on the pace of current inflows, Gross’s bond fundthis month may surpass the record $202.3 billion reached byGrowth Fund of America in 2007, according to researcherMorningstar Inc. Total Return managed $199 billion at Nov. 30,while Growth Fund, which buys stocks, had $153 billion. Total Return took in $42 billion of new cash this yearthrough October, four times more than any other U.S. mutualfund, Morningstar data show. The growth underscores thereluctance of individuals to invest in equities even after U.S.stocks surged 61 percent from a 12 1/2-year low in March, andthe appeal of Gross’s returns, which beat all but four similarfunds in the past decade. “Last year was a time when many funds got burned, but thebiggest fund of all did fine,” Russel Kinnel, director ofmutual-fund research at Chicago-based Morningstar, said in aphone interview. Gross, co-chief investment officer of Pacific InvestmentManagement Co. in Newport Beach, California, returned 4.8percent last year while the Standard & Poor’s 500 Index, abenchmark for the largest U.S. equities, lost 37 percentincluding dividends. Investors added a net $297 billion to bond funds in thefirst 10 months of 2009, compared with $12 billion for stockfunds, according to Morningstar. Return Since Inception Total Return climbed an average of 8.5 percent annuallyincluding dividends from its opening in May 1987 through Dec. 4.That compares with the gain of 7.4 percent by the Barcap U.S.Aggregate Total Return Index. The Pimco fund has returned 14percent this year. The size of Gross’s fund, already the largest based oncurrent assets, could pose problems because many investments maybe too small to have a meaningful impact on performance, saidT.J. Marta, chief market strategist at Marta On The Markets LLC,a financial-research firm in Scotch Plains, New Jersey. “You can’t cherry-pick the best investments because youdon’t get enough return for your buck,” Marta said. Bond markets are sufficiently large and liquid toaccommodate a $200 billion fund without hurting returns orrestricting selection, Jeff Tjornehoj, senior research analystat Lipper in Denver, said in a telephone interview. The U.S.bond market had $34.3 trillion of debt outstanding in the secondquarter, according to data from the Securities Industry andFinancial Markets Association, a New York-based trade group. Advantage of Heft Gross said size would be a legitimate issue if the fundunderperformed the market for several years. “For over 20 yearsnow, it has not been,” he wrote in an e-mail. The fund’s heft creates advantages, including better accessto the issuers of debt and the ability to receive more“attractive new-issue allocations,” Gross said. The fund can hold derivatives, which are securities whose value is derived from an underlying asset such as debt, stocks or commodities. Derivatives can expand the universe of investments for a fund. Gross increased his holdings of government-related debt inOctober to 63 percent of the fund’s assets, the highest in fiveyears, according to the most recent data available on Pimco’sWeb site. The “systemic risk” of new asset bubbles is rising as theFederal Reserve keeps interest rates at record lows, Gross wrotein a commentary published last month. Under what Pimco has termed the “new normal,” investorsshould be prepared for lower-than-average historical returnswith heightened government regulation, lower consumption, slowergrowth and a shrinking global role for the U.S. economy. Mortgage Holdings Fall Total Return’s holdings of mortgage debt fell to 16 percentof the portfolio by market weight from 22 percent in September,matching their smallest percentage of the assets since May 2004.Investment-grade corporate securities rose to 18 percent of thefund from 17 percent, while high-yield bonds fell to 1 percentfrom 2 percent, according to the firm’s Web site. Total Return rose 7.7 percent annually in the 10 yearsended Nov. 30, according to Morningstar. The four comparablefunds with better gains are: the $9.3 billion Natixis LoomisSayles Investment Grade Bond Fund, which returned 9 percent; the$5.8 billion Delaware Diversified Income Fund, up 8.8 percent;the $403 million Frontegra Columbus Core Plus Fund, whichincreased 8 percent; and the $11.9 billion TCW Total Return BondFund, which returned 7.9 percent. ‘Rare Trait’ Pimco Total Return started the decade with $28 billion inassets. As the fund grew, Gross shifted from picking individualbonds to placing bets on specific categories such as mortgage,corporate and government bonds, said Eric Jacobson, director offixed-income research at Morningstar, which gives the fund itshighest rating of five stars. “It’s a rare trait to manage at that level,” he said. Gross’s comments on the economy, interest rates and thebond market, made on Pimco’s Web site as well as on televisionand radio, are closely followed by investors. In an October 2005 investment commentary, Gross predicted a“slam-dunk” scenario in which housing prices would cool,leading to a decline in “funny-money” lending practices andhome equity, a weakening of the U.S. economy and a reduction ininterest rates by the Federal Reserve. “If real housing prices decline in the U.S. in 2006 and2007, a recession is nearly inevitable,” Gross wrote. Arecession began in December 2007, according to the NationalBureau of Economic Research. Little Junk He’s also known for avoiding high-yield, or junk, bonds.The average credit rating of bonds in the fund is AA, the thirdhighest on Standard & Poor’s scale, with 4 percent of assets injunk, according to the fund’s Web site. Gross, 65, is a stamp collector and has said he turned $200into $10,000 while playing blackjack for four months in LasVegas after college. He was born in the Ohio steel-company townof Middletown. A graduate of Duke University in Durham, North Carolina,with a psychology degree in 1966, he spent three years in theNavy and served in Vietnam. Gross joined Pimco after earning aMaster of Business Administration degree from the University ofCalifornia in Los Angeles in 1971. He began using yoga more than a decade ago and credits hismeditation sessions with clearing his head and helping himabsorb unexpected news, such as a Fed half-point interest ratecut in January 2001. The news caught him in the middle of a“sun salutation,” which softened the blow, he said at thetime. Total Return attracted $115 billion since the start of thedecade, the most of any mutual fund. Growth Fund of America, runby Los Angeles-based Capital Group Cos., was second with $99billion. Pimco, a unit of Munich-based insurer Allianz SE,managed $940 billion in assets as of Sept. 30. “They’ve got a well-known visible manager, a great brandand they’ve been successful,” Tjornehoj said. To contact the reporter on this story:Charles Stein in Boston at cstein4@bloomberg.net. Last Updated: December 9, 2009 00:01 EST

Obama Surrenders to General’s Political Surge: Margaret Carlson – Bloomberg.com Updated:New York, Dec 10 03:53London, Dec 10 08:53Tokyo, Dec 10 17:53 SYMBOL LOOKUP FEEDBACKHOMENEWSEXCLUSIVEWORLDWIDEREGIONSMARKETSINDUSTRIESECONOMYPOLITICSLAWENVIRONMENTSCIENCEOPINIONSPENDSPORTSARTS AND CULTUREEDITORS’ VIDEO PICKSBLOOMBERG MARKETS MAGAZINESPECIAL REPORTMARKET DATASTOCKSRATES & BONDSCURRENCIESMUTUAL FUNDSETFsCOMMODITIESECONOMIC CALENDARPERSONAL FINANCEJANE BRYANT QUINNJOHN DORFMANPORTFOLIO TRACKERCALCULATORSFINANCIAL GLOSSARYTV and RADIOBLOOMBERG TELEVISIONBLOOMBERG TELEVISION SYNDICATED REPORTSBLOOMBERG RADIOBLOOMBERG PODCASTSBLOOMBERG SHOWSCEO SPOTLIGHTCFO INSIGHTPORTFOLIO MATTERSMOBILEBUSINESSWEEKBUSINESS EXCHANGEBloomberg InnovatorsTechnologyCurrenciesForex Trading VideosETFsCEOCommoditiesExclusiveWorldwideRegionsMarketsIndustriesEconomyPoliticsLawEnvironmentScienceOpinionSpendSportsArts and CultureEditors’ Video PicksBloomberg Markets MagazineSpecial ReportRESOURCES Bloomberg TV Bloomberg Radio Bloomberg PodcastsBloomberg Press More News • Tiger Woods Lays Low as Derek Jeter Loves Life: Scott Soshnick • Bean Counter Freaks Out Over Al-Qaeda Assassins: Jonathan Weil • Lehman, Dubai Say Much About Double-Dip Economy: William Pesek Obama Surrenders to General’s Political Surge: Margaret Carlson Share Business ExchangeTwitterFacebook| Email | Print |A A A Commentary by Margaret Carlson Dec. 10 (Bloomberg) — No more calls. We have a winner. Allhail General Stanley McChrystal, who has won his war for 30,000more troops to be deployed to a country whose government is sorotten and corrupt many of its citizens prefer the Taliban. Marching triumphantly to Capitol Hill on Tuesday, thengiving network interviews and long sit-downs with Charlie Roseand Christiane Amanpour, McChrystal showed himself, as much asanyone, to be the decider of our foreign policy. The U.S. war onterror will now be centered in Afghanistan. Don’t mistake this for a surge. It’s an escalation. In ablizzard of clarifying statements from Obama administrationofficials, the purported July 2011 drawdown date for thereinforcements was rendered inoperable almost as soon as it wasuttered. Common sense says the deadline was a feint to calmDemocrats. You don’t win the hearts and minds of Afghanis, asMcChrystal wants to do, in a lifetime, much less 18 months, ortrain an army of mostly illiterate, tribal men in a country thatexhausted the superior army of the Soviet Union before the U.S.gave it a go. Of all the issues Obama didn’t want on his desk,Afghanistan was the hardest, even without the military hemminghim in. McChrystal fought in memos, fought through leaks, foughtin the trenches, as much with political arts as martial ones. For a while it looked like McChrystal was beingoutmaneuvered by Vice President Joe Biden. Biden argued thatAfghanistan had changed from a just war to a senseless onebecause al-Qaeda has mostly moved elsewhere, that the citizenryrightfully hated the corrupt and dysfunctional government, andthat drones and special forces on the Afghan border withPakistan could do the job. Fighting Back McChrystal and anonymous “military officials” foughtback. Dramatic excerpts from a classified memo to the presidentappeared. “Inadequate resources,” the memo from McChrystalwarned, “will likely result in failure.” His warning echoed the frequent predictions of doom fromformer Vice President Dick Cheney, who insisted that Obama’sfailure to grasp that we are “at war” and his “dithering”invited renewed terrorist activity. When General Douglas MacArthur disagreed with stopping atthe 38th parallel in North Korea, President Harry Trumanfiredhim. If MacArthur had had McChrystal’s savvy, he might havegotten his way. Generals used to be unsuited for prime time: too gruff, toocandid, too unpolished. Now most are tanned, rested and readyfor their closeup, with P.R. as good as Tiger Woods before therecent troubles. Flatter Me In October, McChrystal let a reporter accompany him toHelmand province and got a long, flattering profile in the NewYork Times magazine out of it. On the cover, a Patton-likephoto. Inside, the story of a man who “pushes himselfmercilessly, sleeping four or five hours a night” and subsistson one meal a day. Jumping from a whirring Black Hawkhelicopter, he paraded through an outpost in the south withouthelmet or flak jacket to show how more troops on the ground cancalm the populace. That’s a lot of ramrod-straight bravado tomatch. Democratic presidents are fearful of reviving the chargethat they are soft on national security and defer to themilitary brass. As Representative John Conyers, a Democrathighly critical of Obama’s build-up, put it, “Calling ingenerals and admirals to discuss troop strength is like metaking my youngest to McDonald’s to ask if he likes Frenchfries.” Obama’s Ambivalence Obama’s nationally televised speech revealed hisambivalence by granting McChrystal what he wanted — 30,000 U.S.troops, plus maybe 10,000 from a coalition of the willing — butonly for a little while. Testifying in Congress, McChrystal hedged that doublemessage. He placated restive Democrats with the suggestion thatthe deployment would end on a date certain, while signaling toRepublicans that Obama’s commitment was more open-ended. Meantime, Afghanistan President Hamid Karzai was tellingreporters that it would be at least five years before Afghansecurity forces would be capable of standing up so we couldstand down. Defense Secretary Robert Gates, in a surprise tripto the region, said it could be as long as four years before anyof the surge troops come home. In a blunder, Gates said what not even the most hawkishsay: “We are in this thing to win.” Send Gates — never tan,rarely quotable — to the same media training that’s madegenerals the envy of Britney Spears. Civilian Leadership Generals should have their say, but not necessarily theirway, in the Oval Office. It’s all too easy to lose sight of theconstitutional principle that military commanders aresubordinate to civilian leadership when a confident general withgood press says we will all be dead if we don’t listen to him. During his deliberations, Obama was cast as indecisive andoverly sensitive to politics, while McChrystal was seen asresolute, concerned not about his popularity but about hiscountry. Less prominent were the facts that during McCrystal’scommand, Osama bin Laden has remained at large and the lie wasperpetrated that Corporal Pat Tillman was killed by enemy fire,not accidental friendly fire. It would be heartening to think Obama did the hard thing onAfghanistan not because his hand-picked general intimidated him,but because he became convinced that catastrophe would ensue ifhe failed to send more American troops. (Margaret Carlson, author of “Anyone Can Grow Up: HowGeorge Bush and I Made It to the White House” and former WhiteHouse correspondent for Time magazine, is a Bloomberg Newscolumnist. The opinions expressed are her own.) Click on “Send Comment” in the sidebar display to send aletter to the editor. To contact the writer of this column:Margaret Carlson in Washington at mcarlson3@bloomberg.net Last Updated: December 9, 2009 21:00 EST