2024-05-24 15:32

May 24 (Reuters) - Eli Lilly (LLY.N) New Tab, opens new tab said on Friday it has invested another $5.3 billion in its new Lebanon, Indiana manufacturing plant, more than doubling its previous investment, as it scrambles to meet soaring demand for its weight-loss and diabetes drugs. The new investment, which brings the total to $9 billion, will help boost production of the active pharmaceutical ingredients (API) for Lilly's powerful weight-loss drug Zepbound and diabetes treatment Mounjaro, the company said. “Today’s announcement tops the largest manufacturing investment in our company’s history and, we believe, represents the single largest investment in synthetic medicine API manufacturing in U.S. history,” said Lilly CEO David Ricks. Zepbound and Mounjaro, both known chemically as tirzepatide, are in shortage in the U.S. and expected to have limited availability across most doses through the second quarter of this year. Zepbound was introduced in the U.S. in late 2023. Lilly has since sold more than 1.2 million prescriptions of the drugs, according to data from IQVIA. The Indianapolis-based company expects supply of Zepbound to remain "quite tight" in the near and midterm as it ramps up capacity, it said on an investor call last month. Lilly has committed a total of $16 billion to building new manufacturing sites since 2020, including $2.5 billion for a plant in Germany, and another $1.2 billion to update existing facilities, it said. The company has previously said it expects the Lebanon site to begin making medicines towards the end of 2026, but for its new Concord plant and expanded facilities in Durham, both in North Carolina, to start increasing supplies of Zepbound and Mounjaro when they become operational this year. Danish rival Novo Nordisk (NOVOb.CO) New Tab, opens new tab has also invested billions in manufacturing to ramp up supply of its popular weight-loss drug Wegovy, announcing it would take over three sites from contract manufacturer Catalent for $11 billion. Lilly announced last month that it will acquire a manufacturing facility from Nexus Pharmaceuticals to produce injectable medicines. The company said it expects to add 200 full-time jobs for highly skilled workers such as engineers, scientists, operating personnel and lab technicians to its Lebanon plant as part of the new investment. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/lilly-invests-further-53-bln-new-indiana-site-obesity-drug-demand-soars-2024-05-24/

2024-05-24 14:13

May 24 (Reuters) - Federal Reserve Governor Christopher Waller said on Friday it's possible that a key underlying interest rate that influences the potency of monetary policy may rise in the future after years of declines, but it's too soon to say if that will happen. "There has been a lot of debate during the past year as to whether or not 'R-star' has increased," Waller said in a speech to the Reykjavik Economic Conference in Iceland. R-star is the interest rate that neither stimulates nor restricts the economy when inflation is at the U.S. central bank's target. While it's a rate that moves slowly and can't be measured with precision and is bound by uncertainty, the concept nevertheless helps explain how stimulative or restrictive monetary policy is at a given time. Waller said R-star has seen a long-term decline due to a number of factors. Among them have been strong demand for U.S. government debt in a world where global trading terms had been liberalizing, regulation changes, falling inflation and less volatile economic activity. But with demographic shifts and other forces at play, including accelerated U.S. Treasury borrowing, many officials have wondered if R-star will rise in the future. If it did, it would herald a new higher interest rate environment and suggest monetary policy will feature higher short-term borrowing costs than the rock-bottom levels seen in years preceding the COVID-19 pandemic. That said, some Fed officials, acknowledging the challenge of measuring R-star, have argued it's not a key factor in their near-term monetary policy considerations. A key factor in the decline of R-star, Waller noted, has been higher demand for Treasury debt issuance compared to supply. But ballooning U.S. government borrowing coupled with other factors could be changing that calculus. "If the growth in the supply of U.S. Treasuries begins to outstrip demand, this will mean lower prices and higher yields, which will put upward pressure on R-star." But he added that "only time will tell how large a factor the U.S. fiscal position will be in affecting R-star." Waller did not comment on monetary policy or the interest rate outlook in his remarks. The Fed governor noted that he does not see the dollar at risk of losing its preeminent status in global finance. "Notwithstanding the drumbeat of warnings from some that the U.S. dollar is in danger of losing its primacy in global trade and finance, it remains by a very large margin the world's reserve currency," he said. "U.S. government debt, likewise, remains the primary form of low-risk asset, which is reflected in the huge stock of Treasury securities held as foreign exchange reserves around the world." But he also said the current path of U.S. government borrowing can't be sustained indefinitely. Sign up here. https://www.reuters.com/markets/us/feds-waller-points-forces-that-may-lift-future-underlying-interest-rates-2024-05-24/

2024-05-24 12:49

SAO PAULO/RIO DE JANEIRO, May 24 (Reuters) - Brazilian state-run oil firm Petrobras (PETR4.SA) New Tab, opens new tab said its board of directors on Friday approved the nomination of Magda Chambriard as the company's new chief executive following the surprise announcement last week. Chambriard, a four-decade industry veteran, has already taken up her new position, Petrobras said in a securities filing. The incoming chief executive, a former head of oil and gas regulator ANP, was chosen by President Luiz Inacio Lula da Silva to replace former CEO Jean Paul Prates after he was dismissed last week. Prates' exit and Chambriard's appointment surprised investors and sent shares plunging amid concerns over political interference. Chambriard has been tasked by Lula with making the oil giant an engine of job creation and industrial development, taking the firm closer to what it was during Lula's first two terms during 2002-2010. She will be looking to invest in and breathe fresh life into domestic shipyards, fertilizer plants, refineries, and gas lines, sources previously told Reuters, but could face difficulties navigating new governance rules and outside controls over the firm. On Tuesday, Mines and Energy Minister Alexandre Silveira sought to allay fears about political interference, stating that Chambriard would execute the firm's $102 billion investment plan for the 2024-2028 period that was already in place. Chambriard, only the second woman to run the firm after Graça Foster's tenure from 2012 to 2015, has already held meetings informally this week at Petrobras' headquarters in Rio de Janeiro, sources told Reuters. Chambriard is set to hold her first press conference as CEO on Monday afternoon in Rio de Janeiro. Sign up here. https://www.reuters.com/markets/commodities/brazils-petrobras-approves-chambriard-new-ceo-2024-05-24/

2024-05-24 12:12

May 24 (Reuters) - Lucid Group (LCID.O) New Tab, opens new tab will reduce its workforce in the United States by 6%, or around 400 employees, it said on Friday, becoming the latest electric-vehicle maker to cut jobs as the industry grapples with slower growth. Automakers have been trying to control costs as elevated inflation and high interest rates prompt consumers to cut back on relatively costlier EVs and pivot to cheaper, hybrid alternatives. The layoffs at Lucid will impact employees at all levels, including leadership and mid-level management, CEO Peter Rawlinson told employees in an email, but said the cuts would not impact the hourly manufacturing and logistics workforce. The company had a total of around 6,500 full-time employees globally, as of December last year, its latest annual filing showed. Shares of the EV maker rose 1% in premarket trading. Lucid expects to incur a total of around $21 million to $25 million in charges related to the workforce reduction and expects to complete the plan by the end of the third quarter of 2024. Sector peer Rivian (RIVN.O) New Tab, opens new tab underwent two rounds of layoffs this year, the latest being in the last month when it cut 1% of its workforce in an attempt to boost margins. EV giant Tesla (TSLA.O) New Tab, opens new tab also said last month it would lay off more than 10% of its global workforce. Lucid forecast higher annual capital expenditure at the start of the month, as it works on expanding production capacity at its Arizona factory and build a new one in Saudi Arabia. Backed by Saudi Arabia's Public Investment Fund, the firm is also set to start production of a more affordable mid-size car in late-2026 and its Gravity SUV this year, to attract a larger customer base. Sign up here. https://www.reuters.com/business/autos-transportation/ev-maker-lucid-cut-workforce-by-6-2024-05-24/

2024-05-24 11:43

MOSCOW, May 24 (Reuters) - Russia will use fuel export bans again as a way of regulating supply and demand, but for now the domestic market is well supplied, Deputy Prime Minister Alexander Novak said on Friday. Russia this week suspended a partial gasoline export ban it had imposed from March 1 to pre-empt fuel shortages and stem a rise in prices after a spate of Ukrainian drone attacks on refineries and technical outages. Novak said the ban had worked as intended. "This is a normal instrument and will be used in the future. We always have the possibility to regulate this situation," he said in comments posted on Telegram by a Russian TV journalist. Novak said the mechanism was analogous to that used by the OPEC+ grouping. "Our task here is not to reduce production and processing, but to regulate the domestic market by balancing it through exports," he said. The ban has been suspended until June 30, but restrictions will apply again from July 1 to Aug. 31. Novak said the suspension would lead to higher refinery utilisation and exports, bringing in additional foreign currency revenue. Asked by a reporter if there was a risk of gasoline prices rising again on the domestic market, Novak replied: "There are no threats. We keep our finger on the pulse and hold weekly meetings with our oil companies and the Federal Monopoly Service of the energy ministry. "We can always make any decision in order to provide 100% of the domestic market with the necessary petroleum products." Sign up here. https://www.reuters.com/business/energy/russias-novak-says-fuel-export-bans-will-be-used-again-2024-05-24/

2024-05-24 11:34

This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine MOSCOW, May 24 (Reuters) - Expanded sanctions on Russia and enhanced pressure on countries that Moscow considers friendly are hurting Russian firms' export revenues and creating oil payment issues, the Bank of Russia said on Friday. The United States has hit Russia with waves of Ukraine-related sanctions and threatened secondary sanctions on foreign banks aiding transactions with Moscow. That has prompted some Chinese banks to limit dealings with Russian companies. "The widening of sanctions and pressure on friendly countries leads to companies' reduced export revenue," the central bank said in a report on financial stability in a section titled "main vulnerabilities". Russia distinguishes between countries that imposed sanctions over its actions in Ukraine and those that did not by calling them 'unfriendly' and 'friendly'. "Unfriendly countries are hindering not only the sale of hydrocarbons, but also the realisation of major investment projects," the bank said. "Against the backdrop of secondary sanctions, supply chains and payment mechanisms are becoming more complicated, which leads to higher import prices and supply disruptions." The threat of secondary sanctions has also slowed Russian banks' increasing the number of correspondent accounts in friendly jurisdictions, the central bank said. Since the start of 2022, the number of correspondent accounts in U.S. dollars and euros has dropped by 55%, it said. U.S. Treasury Secretary Janet Yellen on Tuesday said Washington's new authority to hit banks with secondary sanctions if they aid Russian military-related transactions had helped to frustrate New Tab, opens new tab Russia's efforts to procure goods needed for the conflict in Ukraine, but that more work was needed. Yellen said the most concerning Russian sanctions evasion activity was coming through China, the United Arab Emirates and Turkey. She added that the Treasury was "working to disrupt evasion wherever we see it, from Central Asia to the Caucasus and throughout Europe." Sign up here. https://www.reuters.com/markets/europe/russia-says-secondary-sanctions-are-hurting-export-revenues-oil-payments-2024-05-24/