Massachusetts firm buys Seattle-based biotech

Pacific Northwest

Illumigen

Lexington, Mass.-based Cubist Pharmaceuticals said Wednesday it acquired Seattle-based biotech Illumigen for $9 million. Cubist had paid $4.7 million in October for an option to buy the company.

Illumigen is developing a treatment for hepatitis C infections, currently at a preclinical stage. In addition to the acquisition fee, Cubist would pay Illumigen shareholders millions of dollars more — up to $332.5 million — if certain research and commercial milestones were hit.

The company expects to file a new drug application with the Food and Drug Administration in 2008.

Boeing

Airline's purchase includes 3 787s

Air Astana, a venture between the Kazakh government and BAE Systems, agreed to buy nine Airbus and Boeing jetliners to help meet surging travel demand in the Central Asian nation.

The six Airbus A320s and three Boeing 787-8s have a combined list price of $950 million, Air Astana said in a statement Wednesday. But based on price estimates by aircraft-valuation firm Avitas, the airplanes are worth about $590 million after standard discounts.

Deliveries will start in 2012, the carrier said.

The Almaty-based airline will have options to buy an additional three A320s and three 787s. The airline, which now leases 18 jets, plans to boost its fleet to 63 planes by 2022.

Nation / World

S&P/Case-Shiller

More bad news on home prices

U.S. home prices fell in October for the 10th consecutive month, posting their largest drop since early 1991, according to a key index released Wednesday.

The record 6.7 percent slide in the Standard & Poor's/Case-Shiller home-price index also marked the 23rd consecutive month that prices either fell or grew more slowly than the month prior.

The previous record decline was 6.3 percent, recorded in April 1991. The index tracks prices of existing single-family homes in 10 metropolitan areas.

It is considered a strong measure of home prices because it examines price changes of the same property over time, instead of calculating a median price of homes sold during the month.

Home prices could fall another 10 percent over the next 12 to 18 months before bottoming out, said Patrick Newport, an economist with Global Insight.

Newport said four of the largest groups trying to sell homes — banks holding foreclosed properties, homebuilders, speculators and unemployed consumers — are typically flexible about lowering house prices.

Google

Federal ruling revives patent case

A federal court Wednesday breathed new life into a patent-infringement claim against Google brought by HyperPhrase Technologies.

Last April, HyperPhrase accused Google's AdSense advertising feature, and its AutoLink product of violating four of its patents. HyperPhrase's lawsuit was dismissed in its entirety this month by U.S. District Judge John Shabaz.

In a ruling dated Wednesday, the U.S. Court of Appeals for the Federal Circuit said Shabaz erred when he dismissed the claims involving Google's AutoLink feature. The court, though, let stand Shabaz's decision that Google's AdSense advertising program didn't violate any HyperPhrase patents.

The appellate court then sent the case back to the lower court for more proceedings.

Representatives for Google and HyperPhrase, Madison, Wis., couldn't be reached Wednesday for comment.

Apple

Shares hit $200 for the first time

Shares of Apple hit the $200 mark for the first time Wednesday, as investor confidence in the company continued rising near the end of what has been a strong year for the iPod and computer maker.

In afternoon trading, shares rose $1.17 to $199.97. They earlier peaked at $200.

Apple shares have traded between $76.77 and $199.33 in the past year, rising steadily since January as investors anticipated and then cheered the release of the company's hybrid cellphone, multimedia player and wireless Internet device, the iPhone. The product went on sale at the end of June.

Apple released a refreshed line of iPods during the year, updating its flash-based Nano model to one that can play videos, and introducing a device called the iPod Touch, which is much like an iPhone without cellular-calling capabilities.

"There's so much growth to look forward to for the iPhone," said Stephen Coleman, chief investment officer at St. Louis-based Daedalus Capital, which owns about $7 million of Apple shares. He projects the stock will hit $600 in 18 months.

Aviation

U.S. airfares highest since mid-2006

U.S. airlines including American Airlines, the world's biggest, will end this year commanding the highest domestic fares since mid-2006, according to a fare-tracking Web site.

Competitors followed United Airlines, which doubled the fuel surcharge on round-trip tickets last week to $20, marking the ninth broad-based fare increase since September, said Rick Seaney, chief executive officer of FareCompare.com.

American, Continental Airlines, Northwest Airlines and US Airways at least partially matched the increase by Dec. 24, spokesmen said Wednesday. Delta Air Lines adopted the higher fee Dec. 21, a day after United.

Airlines have raised fares to keep earnings from being eroded as jet-fuel prices have climbed 54 percent this year.

Prices for tickets on U.S. routes are now the highest since FareCompare.com began tracking them three and a half years ago, Seaney said in an e-mail.

American Home

Lender seeks to sell pools of mortgages

American Home Mortgage wants bankruptcy-court permission to sell pools of mortgages in which borrowers are behind in their payments and owe $164 million in principal on the loans.

The failed mortgage lender has asked the U.S. Bankruptcy Court in Wilmington, Del., to approve a Feb. 13 auction for the mortgage loans, according to court documents filed last week.

American Home is one of many mortgage lenders that have been forced into bankruptcy due to the credit crunch.

It has been selling its assets and winding down its business. In October, the bankruptcy court approved the sale of American Home's loan-servicing business to Wilbur Ross' private-equity firm.

FedEx

Rates will go up for freight trucking

FedEx announced a general rate increase of 5.5 percent Wednesday for its FedEx Freight trucking division.

The demand for freight shipping is "severely restrained" by the weak national economy, the company said, noting the 6 percent drop in less-than-truckload shipments with FedEx Freight from a second-quarter earnings report last week.

The rate increase for freight trucking, to take effect Jan. 14, follows increases at the shipper's other divisions, FedEx Express and FedEx Ground.

In October, the company said a rate increase for FedEx Express is expected to average 4.9 percent. The company announced a similar rate increase for FedEx Ground last month.

Rival UPS announced last month that it was implementing an average rate increase of 4.9 percent for ground and air-express services and international shipments originating in the United States.

Leap Wireless

Financial reports restated to SEC

Leap Wireless on Wednesday filed restated financial reports with the Securities and Exchange Commission (SEC) for 2006, and the first and second quarters of 2007.

In an amended SEC filing, the company reported restated second-quarter earnings of 14 cents per share, compared with the 5 cents per share it originally reported.

The San Diego-based wireless provider had said it would restate its financial reports to correct for errors in recorded revenue and operating expense.

The wireless provider reported restated revenue for the period ended June 30 of $398 million, compared with the $393 million it originally reported.

For the year ended Dec. 31, 2006, the company reported a restated loss of 40 cents per share, compared with the loss of 7 cents per share it originally reported.

Compiled from Seattle Times staff, Bloomberg News, The Associated Press and Dow Jones Newswires