meg tirrell.o with californ in on the battle to stem soaring drug prices, is this the best soluti lettin sta fix the problem instead? it come from the michel mellow is a professor of law and professor of health, resear and policy at stanford universi and she joins us now to talk about that. profes welcome. it's nice to ha you with us tonigh guess the question we're posing is, we know we have a prob with soarin drug prices t better to be federally mand or state mandated? >> well, as in many areas of health policy, the types of init we're seeing out of states are not the first best soluti but they're the solution that appe to be politically feasib at th partir >> i assume that's because there is no consensus in congress or betw the administrat and congre on how to handle this. i would like to go to the questi in front of the voters, propos 61. and one of the concerns is those uninte consequences. in othwords, if you reduce pric for the state workers in califo for retirees, cut employees, people who

meg tirrell has more on this. hi, meg. >> biotech investors hope people think it's bargain now. if you check out health care for the year, it's been a really tough one. you can see there the ibb down about 23% for the year. october was particularly bad as well, biotech losing 14% for october. as we saw, things like ariad getting a letter from the government over its leukemia drug, mylan's epi pen still getting scrutiny. of course, is the scrutiny over drug prices? we saw the pain in amgen and enbrel and insulin prices in the united nations. that hurting biotech. the coming election also scaring biotech investors. this fear of a potential democratic sweep. the news today with hillary clinton maybe making that slightly less likely to happen. of course, california's prop 61 also a big topic. drug industry investors are focusing on that would sort of mandate some drug rebates in that state, people in the industry really, really not liking that one. if you check out p.e. multiples historically for biotech, they crossed over with phrma and the broader market at the end of october arou

let's get to meg tirrell. meg. >> hey, melissa.ina saying its third quarter sales coming in short of expectations. about $607 million for the third quarter. lower than its guidance of $625 million or $630 million. attributing this to a larger than expected year over year decline in sequencing instruments. alumina the largest in sequencing instruments. if you look back to april, this is the not first time they have warned like in this year. an identical drop in april after they warned sales would fall short then. the stocks falling back down to those levels. alumina not alone. if you check out they wero fisher and specific biosciences with much smaller share. they're also down in the after hours. what is also down, the ibb. although pneumonlumina is the m machines, taking the whole sector down. probably not quite a good day tomorrow as we saw today for biotech. >> meg, thank you. meg tirrell joining us from the nysc. so it's interesting, others deion the back of the news. >> let's talk about apneumonlum. go back to january, it took

meg tirrell is here with the details. >> a lot of news to talk about today.company saying late friday it reached a settlement with the justice department for $465 million. that's with the doj and other government agencies, to settle claims over the idea that it may have misclassified the epipen as to how much it was going to pay in rebates to medicate it. charged by several congressman that it wasn't paying enough in the medicaid rebates. as part of the settlement, they'll be entering a corporate integrity agreement, part of the announcement on friday. the settlement doesn't have any finding of mylan wrongdoing here. they also said friday they're going to be lowering their 2016 adjusted eps guidance, but the stock reacting positively because people thought the settlement was bigger than the $465 million they're paying. it removes a big overhang. raymond james upgrading stock today. david maris says there may be more to worry about here. the s.e.c. starting an investigation into the same issue. of course, there will be continued questions around the actual pri

reporter meg tirrell with a cyber security risk is something you may not have thought about. hacking your health is had week's cover story. >> reporter: more than 100,000 people with diabetes eventually got a strange letter from johnson & johnson. the health care giant was warning them of a cyber security risk with one of its insulin pumps. the one-touch ping insulin pump system comes with a remote control. to enable delivery of insulin. j&j says no one has been harmed in this way but it is possible someone could hack into the device and control insulin delivery. >> we need to give users and patients the information so that way they can determine if it's too risky for them or if it's not risky for them. >> reporter: jay radcliffe is the researcher who made the discovery. while he works in cyber security at firm rapid seven, his work on the insulin pump was a side project. he's diabetic, and it was his pump on which is he did the research. >> this is just out of my own personal curiosity about how these devices work and how safe they are for my own personal use as a diabetic.

. >> r for "nightly bu i'm meg tirrel olive garden bucks the trend.chain operator darden posted better than expected earnings raised its guidance thanks to the olive garden's eighth consecuti quart of same-store growth. darden also buying back up to $500 million worth of shares. shares were up just a fraction at 61.72. sears has reportedly attracted intere for its craftsman tool business. bloomberg says stanley, black and decker and techtronic industri made some bids. the winning offer bu due by we t en of the month. sears rose to $12.10. >>> google unveiled its new flagship smartphones, the pixel and xl. the phones replace google's prior smartphone venture called the nexis, and directly take on apple's iphone. shares of google's parent al were up a fraction to > and yahoo! reportedly scanned hundr of millions of its users' incoming e-mails for u.s. intel reuters says the tech giant built a custom software program to search the e-mails to comply with the classified u.s. government demands. it could be the first time a u.s. internet company agreed to a

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meg tirrell, thank you very much. >> thanks. >>> big move here in the after hours session. >> yeah. i mean, i guess it's good from their statement, it said -- it resolves their issues with the government. so that clearly is good. but the space, i mean, this week was a disaster. i thought it was really interesting, which was anthem wasn't going to cover it. that gives cover to united health and whomever to also not do it. >> this is specific, as i understand it, to the medicare, to its -- to how it classified, and so therefore what rebate level it paid. so in terms of, yes, it resolves that issue with the government, but it doesn't necessarily resolve the issue with the public. >> right. >> the outrage and all of the hearings. but, yeah, one more thing. >> one -- one cloud gone, is -- you know, and the stock has gotten crushed so not surprising it bounced back some. >> the optics are still bad, to your point. i think we talked about this. for the last month or so, said worst-case scenario, anywhere from 25 to 50 cents dilutive to earnings. and they just came out and basically told yo

meg tirrell joins us now to explain. >> it is called the california drug price relief act. may be gaining steam heading into election day. known as prop 61. it would bar california state agencies from paying more for prescription drugs than the u.s. department of veterans affairs. now the va is allowed to negotiate with drug companies, something that medicare can't do. proponents of the bill say it could save californians more than $5 billion over the next ten years. proponents including senator bernie sander kwh eers who rall support of prop 61 in san francisco on saturday. >> stand up to the greed of the pharmaceutical industry, which is charging us by far the highest prices in the world for prescription drugs while they're making tens of billions of dollars in profit every single year. that's wrong. and what you do here in california will reverberate all over this country. i hope the proposition 61 is passed. >> shaping up to be the most expensive ballot initiative ever seen in california with more than $100 million in donations, the vast majority of which oppose the mea

let's bring in meg tirrell. what happened? the biggest maker of genome sequencing equipment. they warned about their third quarter. that's where analysts were looking around 628 million for the quarter. they attribute this to a higher than expected year over year decline in sales of sequencing machines. people are worried this means people are doing less genome sequencing, less research. what analysts are saying today is that maybe there is a problem that they have introduced some new products recently, a lot of folks bought these new machines that have very high powered and fast sequencing speeds. and essentially companies just don't need to buy as many right now. you can see here these are some of their sequencing machines, these are very expensive machines. they can cost millions of dollars and these are academic labs often, often companies buying these. and really a miss by $25 million, $20 million. that could be a couple of machines here. folks trying to digest this. this isn't the first time that illumina missed guidance

meg tirrell has more. >> a big move for the shares told after a phase three trial out yesterday for thel drug for depression being tested in patients who tried other therapies, not getting enough benefit. seeing positive results in this study. that did come after two phase three trials failed in january. sending the stock down at the beginning of the year. they were trying to climb thr way back, not quite getting there. the we for alkermes, will this collection of data be enough for fda approval. the company says it plans to meet with the fda to discuss the path forward. some questioning whether one positive study at least in phase three, the latest stages of trials, will be enough to push this through. people saying this has potential blockbuster billion dollar potential here in revenue if it is successful. >> at first two failed phase three studies, people were basically throwing in the towel on this particular compound. still has to -- generally the fda needs two positive phase three trials, correct? >> in an indication as big of this, they want two. the company says that some of the

let's send it to meg tirrell with more on why it's moving this morning. >> david, mylan reaching a $465settlement with the department of justice and other government agencies over the charges of misclassification of the epipen as per the medicaid rebate program. there had been several charges mylan wasn't paying enough in rebates to medicaid, even the centers for medicare and medicaid services said it told mylan of this. this resolves those issues. also a corporate integrity agreement around this but the settlement finds no finding of mylan's wrongdoing. also late friday lowered adjusted earnings guidance for the year by 15 cents on the bottom end, 25 cents on the top end but reiterating guidance for $6 adjusted eps in 2018. now, raymond james upgrading the stock to a strong buy saying this removes one of the nearest term overhangs on mylan. and really this settlement a lot less than a lot of people worried it potentially could be. despite the stock's reaction today wells fargo's david maris coming out saying this may not be the end for mylan. s.e.c. mylan disclosed late friday that the

meg tirrell in the newsroom with the latest in this saga. >> the saga is right.sed down 12% today on this news from bloomberg news that a criminal probe into valiant is now focusing on former ceo, mike pearson and former cfo, howard shiller. potentially bringing potential accounting fraud charges within weeks. now, that did hit the stock by about 12%. it is rebounding a bit after hours. the company came out with a statement, confirming this was an ongoing investigation that had already disclosed saying, quote, we are in frequent contact and condition to cooperate with the u.s. attorney's office for the southern district of new york. we do not comment on rumors about investigations. and cannot comment on or speculate about the possible course of any ongoing investigation. now, the "wall street journal" had impressipreviously reported it may be among the most serious facing valiant, but certainly not the only legal proceeding valiant is facing. a dozen on its hands. a few of the legal probes disclosed in its most recent 10q. this weighing on valiant stock so much,

meg tirrell. down 40%. intracellular another one. novavax. >> i'm not going to pretend i can speak intelligently about the company. i can't. what i can say, the three reasons the reasons why if you want to be in biotech, you get into a company like amgen. look at the products in market now. and look at the valuation and their balance sheet, and that's why if you want to play binary biotech, good luck. this happens. but if you want to play biotech with valuation, amgen is your play. >> and another if you are more conservative when you really look at the big-time, the big phrma names these days, they have become a biotech play as well. you look at the acquisitions over the years and it really makes sense. i know bristol-myers has traded way off of where they were. when you look at something like that, they are really just a big biotech disguised right now as a phrma company. and i think you're seeing more and more out of the lilys and merck. >> a surprising group of under the radar stocks soaring this year. what they are and if there i

joining us now is meg tirrell who brings that special guest. >> joining us now is sir andrew witty ceo joining us. >> good to be here. >> obviously brexit happening, there's a lot of uncertainty in england. tell us how that's impacting your business and going forward what your expectations are about that. >> well, first of all, we've seen a very good quarter in q3 this year. our earnings and constant exchange rate up 8%. then a huge tail wind from currency. you can see that that is driving something like a 27 percentage point increase in our earnings number. if we took the end of q3 rate versus international currencies, that would give an annual effect of 21 points. so very positive. that combined with the underlying performance of the business very strong new product really driving up our incoming cash flow. $1.8 billion of cash flow during the quarter. that's up from 0.5 billion a year ago. very significant improvement. looking forward to terms of currency impact. and we also have significant manufacturing base within the uk. so that gets us somewhat from the potential of effect. so

meg tirrell back with details on that story. what's going on now? >> hi, guys.lking about the classification of epipen. a lot of reports looking into the idea they may have misclassified the epipen and paying lower rebates to medicaid. milan saying it's agreed to a settlement with department of justice for $465 million. with the doj and other government agencies that will resolve questions raised about the classification of the epipen. they also say in this same release they are lowering their 2016 earnings guidance. now it expects it to be 4.70 to $4.90, down from $4.85 to $5.15. they remain committed to 2018. mylan over the medicaid classification of epipen. mylan up 9%. people were concerned they may be paying more than this. >> i guess that was the concern. any idea what this amount represents? in terms of the $8 million. is this what they would have otherwise paid if they reclassified the epipen? >> actually we had a story out citing they are looking at $700 million, triple the damages if they were charged. >> this is a bargain then. >> this is looking like

meg tirrell has details. >> under pressure toward the end of the trading day on this bloomberg reportminal probe was looking into a potential accounting fraud charges for the former ceo, mike pearson and cfo, howard shiller. the stock closed down 12%, although now is rebounding in the after hours. valiant saying that it has previously disclosed this investigation from the u.s. attorney's office in the southern district of new york. putting out a statement it is fully cooperating with the authorities throughout the investigation. they're in frequent contact, continue to cooperate with them. they say they do not comment about rumors about investigations here, saying this is similar to reporting from the "wall street journal" a couple months ago. we also reached out to attorneys for pearson and shiller. pearson's attorney declined to comment. shiller hasn't gotten back to us. >> very basic. they're investigating those two men, not the company, or do you know? >> it appears they are investigating both the company and bloomberg reporting they are also focusing on the two men. >> they had a

meg tirrell has the details. >> that's right.letter last night, she said they have assessed their strengths and weaknesses and they have decided to close their clinical labs as well as their wellness testing centers. so as part of this, they will cut about 40% of the workforce, about 340 people. and they will focus on their mini lab p machine. this is the thing that they unveiled back in august at the aacc meeting in philadelphia where a lot of folks are hoping to hear about edison, the machine that we had heard that they were using before. essentially what they will be doing is instead of being a customer-facing business and having the open testing sites, they will be developing the testing technology to potentially sell to doctor's office, hospitals, things like that. and of course at this meeting back in august, they had said that they were going to develop a zika test and ebola test that they will going to go through the fda with and we learned a couple weeks ago that they had not developed that in the right way, they hadn't

meg tirrell joins us now. >> a lot of pharma news today, a lot of big names reporting, starting with the stock under a little pressure as the company is facing pressure on its i unit and new drugs cosentix. but the election and pricing also top of mind for a lot of the ceos. both from merck and eli lilly. we'll start with merck, the news last night, the company getting approval for the inimmuno therapy drug etruda. that's driving the stock a lot today. the ceo talking about need for m&a and looking for bolts on deals. also saying they don't expect this pricing pressure that we have been seeing to lessen any anytime soon. hearing stronger words from the eli lilly ceo today, all eyes on their data in alzheimer's expected before the end of the year. but also asked on the call about proposition 61, this ballot initiative in california, folks will vote on november 8th. here's what he said about that. >> problem 61, we're fighting that tooth and nail in california. it is not only bad legislation, it is bad for your health. and we're trying to impress that on the voters. >> and, of course,

meg tirrell has those. i like to do this. i wish e with didn't have to do any here.ts doing it. >> big beat in the third quarter, joe. earnings per share coming in at 77 cents. company also raising 2016 guidance by 25 cents. adjusted eps now expected at $2.90 a share. now issuing new 2017 guidance. very important because there's a lot of uncertainty around the business after the lung cancer trial over the summer. new 2017 guidance coming in $2.85 a share to $3.05. also issuing buyback and operate the model hinting towards more streamline -- we'll talk about this and more with the ceo today on "power lunch" in an exclusive interview. back to you. >> thanks so much. we know you'll keep an eye on that. >>> for more on twitter, ed lee joins us. julia boorstin i believe is still with us. ed, we'll start with you. we didn't get a deal. >> no deal. >> but we got a restructuring. does that mean a deal is not happening or this is what the company is doing first? >> i think this is what they're doing first. they're taking a hard look at -- you know what? we have a lot of thing

meg tirrel has more. >> martin shkreli was arrested back in 2015. at his most recent court appearance, a court date was set for june 26, 2017. this is a status update. he has been charged with miss appropriating $11 mill wion fro his old company, retrophin, charges of wire fraud, conspiracy to commit wire fraud and securities fraud, saying he lied about how much money his funds had, lied about performance and looted, calling it a ponzi scheme, looting retrophin to pay back investors. this has nothing to do with this old drug price he raised by 5,000%. i was looking to see what happened with the price of that drug. they said they would lower it after this blew up. i talked with the cleveland clinic, they say though the company started giving big discounts to hospitals, 50%, 60%, 50% off of 5,000 price increase is not solving the problem. >> maybe off a 2,000% price increase. >> today we will hear from ben brafman, a lot of what the prosecution will be seeking, arguments over evidence and inside baseball going on. >> this has been tried in a court of

and our meg tirrell joins us on set. you are, like, an expert on j & j. saw him -- dominic just heard you were here and looked like he got very nervous. because you might have -- dominic, are you going to be okay if meg asks you pointed questions? >> sure. i'm fine. i'm fine, joe. good morning. >> he's confident and ready for it. one of the things we could get to it for michelle later, but there was venezuela actually got mentioned in the results, dom n domin dominic? >> let me answer that in a minute. overall the result wrs very good, i think. we're very proud of the results. strong sales growth and underlying sales growth about 5.9% and good earnings growth. 12.8%. very proud of the results. you might remember we increased our guidance last quarter and now we're tracking to those. with respect to venezuela, we're just comparing the results of this year to last year. at the end of last year, we had a devaluation so that provides for some comparison issues. but it's only about 30 basis points on the results for johnson & johnson. >> i think the thing ever