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Rite Aid increases credit line by $250 million

BY Michael Johnsen

NEW YORK Rite Aid on Sept. 18 increased its credit line to $650 million, from $400 million, according to a document filed with the Securities and Exchange Commission Wednesday.

Specifically, the new agreements with Citibank and Wachovia Bank increased the company’s credit lines to $325 million and $200 million, respectively.

The termination date of the receivables financing agreement was also extended to Sept. 16, 2008, and the availability of the backstop amortization facility that is provided by the investor agents and related banks was extended to September 2010.

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Walgreen’s 4Q Drops

BY Allison Cerra

CHICAGO One of the nation­­’s biggest drug store chain operators announced that its fourth-quarter profit dropped nearly 4 percent, according to Mo­nday’s reports.

Walgreens explained that because of lower reimbursements for popular generic drugs and increased store and staff costs, its net income tumbled.

According to the company’s earnings report, total expenses increased by more than 11 percent to $12.8 billion, which chairman Jeffrey Rein said was out of line with reimbursements the company received. Prescription sales accounted for nearly two-thirds of the company’s business.

“Managing both expenses and lower reimbursements on some generic drugs is my top priority,” he said in a company release. “We’re going to fix this, and at the same time continue our aggressive growth plan.”

While company’s revenues rose more than 10 percent to $13.4 billion from $12.2 billion, its net income slipped to $396.5 million, compared to $412.3 million earnings at the same time last year. 

For the year, the company said that its earnings increased by to $2.04 billion ($2.03 per share), compared with $1.75 billion ($1.72 per share).

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Wyeth names Poussot next CEO

BY Drew Buono

NEW YORK Wyeth has named a replacement for its retiring chief executive officer Robert Essner. Chief operating officer Bernard Poussot will take the reigns effective Jan. 1, according to Reuters.

Poussot will face a number of challenges including generic competition of Wyeth’s blockbuster drugs Protonix and Effexor. The key will be how the company develops its new drugs and how quickly it can get them on the market.

The company also announced that its board approved an increase in its previously authorized share repurchase program to up to $5 billion, which includes about $1.2 billion in stock buybacks already completed this year.

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