FDA approves Remicade for ulcerative colitis in children
HORSHAM, Pa. — The Food and Drug Administration has approved a drug made by Johnson & Johnson for treating ulcerative colitis in children.
J&J subsidiary Janssen Biotech said Friday that the FDA approved Remicade (infliximab) for moderately to severely active ulcerative colitis in children who have not responded adequately to conventional therapies.
"Ulcerative colitis can be a devastating disease, and previously there had been no approved therapeutic options for pediatric patients who had an inadequate response to conventional therapy," said Jeffrey Hyams, University of Connecticut medical professor and lead investigator of the clinical study that lead to the new approval. "The approval of infliximab represents an important treatment milestone in the care of children stricken with this inflammatory bowel disease."
According to the Crohn’s and Colitis Foundation of America and the Starlight Children’s Foundation, about 1.4 million Americans have irritable bowel syndrome, which includes ulcerative colitis and Crohn’s disease, including 150,000 children younger than 17 years old.
Rite Aid: Most improved?
WHAT IT MEANS AND WHY IT’S IMPORTANT — During Rite Aid’s second-quarter 2012 earnings call last week, at least two analysts congratulated the company on its performance. It’s little wonder: As president and CEO John Standley said, the quarter saw the first increase in total sales in 13 quarters, with much of the improvement driven by the Wellness+ loyalty card program.
(THE NEWS: Rite Aid expands Wellness+ program, Wellness stores in Q2. For the full story, click here)
Some analysts nevertheless continue to see signs of trouble. Credit Suisse analyst Edward Kelly noted that despite its success, Wellness+ had a negative impact of 33 bps on gross margin and wrote that the company “continues to sacrifice profitability in order to drive top-line improvements” in a report released after the call. He also called the decision not to expand on the Rite Aid/Save-a-Lot co-branded stores — made due to the stores’ inability to generate sufficient margins, despite good sales lift — “premature.” Meanwhile, Moody’s Investors Service said in a report released in February that while initiatives designed to drive sales, such as Wellness+ “make sense,” they might not be enough to stem market share losses.
Still, February was a long time ago, and Kelly’s report noted that Wellness+ has continued to gain traction despite its negative effect on gross margin. The program has helped drive sales, with members showing significantly larger basket sizes than nonmembers. Meanwhile, as Standley noted when the company released its first quarter 2012 report in June, sales at the Wellness stores were already trending between 100 and 200 basis points higher than the rest of the chain. Since then, the concept has been expanded to several new markets, including Seattle, Baltimore and Boston.
Indeed, CFO Frank Vitrano said, the chain would “ideally” like to have all the stores in the chain remodeled in five years. While conceding that such a goal likely would not be realistic, Vitrano said it was conceivable that 78% to 80% of the chain could be remodeled “over the next couple of years” with the right increases in capital expenditure investment.
Deloitte forecasts 2.5% to 3% increase in holiday sales
NEW YORK — Retailers should expect small gains in 2011 holiday sales, according to a Deloitte forecast issued Monday.
The company’s retail & distribution practice expects total holiday sales to reach between $873 and $877 billion, representing a 2.5 to 3% increase over last season.
"Consumer spending was on the rise for several months despite dampened confidence in the economy among U.S. households," Deloitte’s chief economist Carl Steidtmann said. "Those earlier gains have begun to flatten and may be tempered by persistent weakness in the housing and employment sectors and pressures from the European debt crisis. Despite some relief in energy prices, consumers may feel the strain from food, apparel and other categories where prices are markedly higher compared to the previous holiday season. Additionally, retailers will face tougher comparisons this year after last year’s substantial increase in holiday sales."
Additionally, Deloitte forecasts a 14% increase in nonstore sales, with nearly three-quarters of the sales resulting from the online channel with additional sales coming from catalogs and interactive TV.
"Double-digit growth in the nonstore channel has given the industry a major boost, and retailers that put online channels to work for their physical storefronts have the advantage," said Alison Paul, U.S. retail and distribution sector leader and vice chairman for Deloitte LLP.
Paul noted that the brick-and-mortar store is still central to the shopper experience.
“Retailers that integrate the power of the sensory experience in-store with relevant, timely information via their websites and mobile applications are well-positioned to lead the way this holiday season,” she said. While economic events have the potential to soften consumer spending this season, businesses are already operating at lean and efficient levels and positioning themselves to weather a period of slow growth, according to Paul. But she warned that retailers should be prepared with contingency plans.
"Retailers need to be nimble enough to quickly adapt and adjust their inventory, assortment, pricing and promotional strategies when consumer demand fluctuates,” Paul said.