MRK Merck and Co Inc

KMART

Chain to Close More Locations

Kmart is closing an additional 64 locations, according to a person familiar with the matter, as the struggling department-store chain continues to shrink its footprint.

The latest closures, which were announced to employees, are in addition to a decision in April by parent Sears Holdings Corp. to close about 68 Kmart stores this year. The chain had 941 locations as of Jan. 30, meaning it has now announced plans to close about 14% of its locations.

A Sears spokesman said the company will provide an updated store count when it releases its next quarterly earnings report. News of the closures was earlier reported by Business Insider.

The 64 Kmart store closings include 17 locations that are part of Seritage Growth Properties, a real-estate investment trust that Sears created last year, the person familiar with the situation said. Seritage disclosed the 17 closures in a securities filing on Friday, but didn't say whether they were Sears or Kmart locations.

Over the past five years, Sears Holdings has shut more than 400 Kmart discount stores and supercenters, or about a third of the chain's locations, according to regulatory filings. In an unusual move, the retailer recently spent money to remodel and reopen a location in a Chicago suburb.

Kmart posted an operating loss of $292 million on sales of $10.2 billion in its last fiscal year, ended in February. It has cumulative operating losses of $1.06 billion in the last three years. Sears Holdings ended the latest quarter with about $276 million in cash and long term debt of $3.4 billion.

Last week, Moody's downgraded its rating on Sears' speculative grade liquidity rating noting the company will continue to rely on external financing and selling assets to fund its operating losses. Moody's estimated the company's operating cash flow will be negative $1.5 billion this year.

--Suzanne Kapner

SANOFI

Drugmaker Sues Merck Over Patents

PARIS -- Sanofi SA said it filed a lawsuit against Merck & Co. for alleged patent infringements to prevent the U.S. drugmaker from launching a rival version of the French pharmaceutical giant's best-selling diabetes treatment Lantus.

In the filing in the U.S. District Court of Delaware, Sanofi said Monday it claims that Merck Sharp & Dohme Corp., Merck & Co.'s international division, violated as many as 10 patents held by the French company, including ones for its insulin Lantus and its insulin-delivery device soloSTAR.

The Paris-based drug company said it started the legal proceedings against Merck after the U.S. company's filing for new-drug applications with the U.S. Food & Drug Administration.

A spokeswoman for Merck said the company's product "doesn't infringe Sanofi's patents."

Sanofi shares traded at EUR69.63 ($77.68), up 62 European cents, at Monday's close.

The French drugmaker's all-important diabetes business is under siege, as a flurry of pharmaceutical companies seek to sell knockoffs of its blockbuster insulin Lantus in the U.S. The expected launch of lower-cost copies of Lantus, as well as pricing pressure on diabetes drugs in the U.S., is rapidly eroding earnings at Sanofi's diabetes division, which accounts for about 20% of the company's total revenue.

In the first six months of the year, diabetes revenue fell 6% to EUR2.9 billion, hit by a 15% drop in Lantus sales to EUR2.38 billion.

The company has said it expects revenue from diabetes drugs to continue to decline as competition among insulin makers intensifies.

In January 2014, Sanofi filed a suit against Eli Lilly & Co. to defend its patents on Lantus.

It reached a deal with the U.S. drugmaker nearly two years later, under which Lilly agreed to delay the launch of its insulin to December 2016 and pay royalties to Sanofi.

In a bid to replenish its new drugs pipeline and revive growth, Sanofi for months had pursued U.S. biotech Medivation Inc. Medivation, a Nasdaq-listed company, focuses on hard-to-treat cancers, markets the prostate-cancer therapy Xtandi, and has two other oncology assets in clinical development.

U.S. pharmaceutical company Pfizer Inc. beat out Sanofi, acquiring Medivation for $14 billion in August.

--Noemie Bisserbe and Inti Landauro

NJOY

E-Cigarette Company Seeks Chapter 11

E-cigarette manufacturer NJOY Inc. filed for bankruptcy protection Friday after struggles with a new product coupled with litigation and regulatory expenses took a toll on the company's bottom line.

The chapter 11 filing in the U.S. Bankruptcy Court in Wilmington, Del., is designed to spur interest in NJOY as the Scottsdale, Ariz., company looks to sell its business and deal with debts exceeding $32 million.

NJOY said it began exploring a sale earlier this year but didn't receive any offers. A second attempt at finding a buyer in June sparked some interest, and court papers indicate the company plans to sell itself through an auction process overseen by the court.

NJOY products include disposable e-cigarettes, rechargeable e-cigarettes, vaping systems and e-liquids, court papers say. NJOY products can be found in drugstores, convenience stores and online.

In late 2013, NJOY launched a new e-cigarette product called Kings 2.0, which failed to gain traction and contributed to a $15.2 million decline in gross profit during the six months after the company shelved the product. Overall sales at NJOY plummeted to $7.4 million in 2015 from a peak of $92.9 million in 2013.

Court papers say NJOY also "incurred substantial expenses" in addressing new Food and Drug Administration regulations aimed at e-cigarettes and related products. On top of that, the e-cigarette manufacturer incurred litigation fees tied to a patent-infringement lawsuit.

The company has lined up $6 million in bankruptcy financing from existing lenders, court filings say.

As the market for e-cigarettes grew, NJOY attracted the attention of venture capitalists. According to WSJ Pro Venture Capital, it has received funding from Napster co-founder Sean Parker, Homewood Capital, Catterton Partners and a venture fund started by PayPal co-founder Peter Thiel.

The law firm Gellert Scali Busenkell & Brown LLC is handling the chapter 11 case, SierraConstellation Partners LLC is financial adviser and CohnReznick Caiptal Markets Securities is investment banker.

The case, numbered 16-12076, has been assigned to Judge Christopher S. Sontchi.

--Sarah Chaney

TERRAFORM

Sister Firms Weigh Selling Themselves

TerraForm Global Inc. and TerraForm Power Inc. said Monday they are considering selling themselves, as the sister companies face trouble due to the bankruptcy of parent company SunEdison Inc.

The two companies own major wind and solar power projects developed by SunEdison, which filed for chapter 11 bankruptcy protection in April. SunEdison launched the sister companies into the public stock market in 2014 and 2015, respectively, and is considering selling its controlling stakes in the sister companies.

The TerraForm companies were a central element of the financial engineering that fueled SunEdison's fast growth.

But SunEdison's market capitalization plummeted in 2015 and 2016 as investors and business partners lost confidence amid mounting debt, incomplete deals and doubts about the company'sfinances.

TerraForm Global and TerraForm Power said they were open to finding a new sponsor to replace SunEdison but were also preparing to operate as independent companies. SunEdison performed some management functions for the TerraForm companies, including their accounting practices, and its bankruptcy caused the companies to delay their financial filings.

The TerraForm companies said they were working with SunEdison toward a potential deal but that decisions made by the parent may require bankruptcy court approval.

TerraForm Global shares rose 1.5% in premarket trading; TerraForm Power shares were inactive.

--Austen Hufford

(END) Dow Jones Newswires

September 20, 2016 02:48 ET (06:48 GMT)

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