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Thursday, April 24, 2003 - Page updated at 12:00 AM

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Business Digest

Bothell biotech's partner makes additional investment

SEATTLE — Icos, a Bothell biotech company, said it has sold its piece of a 50/50 partnership to its partner, Texas Biotechnology, for $4 million at closing, another $4 million in a year, and $2 million in 18 months, plus interest.

The deal gives full ownership rights to Texas Biotechnology for drugs that the two companies had been co-developing. The work focused on Sitaxsentan, an experimental drug for pulmonary arterial hypertension, and TBC3711.

Icos Chief Executive Paul Clark said the deal reflects Icos' commitment to focusing its development strategy.

Late last year, the company halted development of Pafase, a drug for severe sepsis, when it failed in the final, and most expensive, stage of clinical testing prior to approval from the Food and Drug Administration.

Icos stock was up 83 cents, or 3.3 percent, to $25.80 on news of the sale to Texas Biotechnology.

The company is scheduled to report its first-quarter financial results next week, which will provide the first glimpse at European sales for its impotence drug, Cialis.

Local Jack in Box store sued in sex-abuse case

SEATTLE — The Jack In The Box along Everett Mall Way was sued for sexual harassment yesterday.

The U.S. Equal Employment Opportunity Commission (EEOC), which filed the suit, contends that five female employees were subjected to a hostile work environment and retaliation after they complained of lewd remarks and sexual overtures by their district supervisor.

The EEOC says that Jack In The Box failed to take appropriate action when the women discussed it with management. The commission is seeking back pay and compensatory and punitive damages for the women, as well as injunctive relief.

Seattle storage company announces 54-cent dividend

SEATTLE — Shurgard Storage Centers yesterday announced a first-quarter dividend of 54 cents a share, up a penny from the previous quarter. The dividend is payable on May 20 to shareholders of record on May 6. The Seattle-based real-estate-investment trust specializes in self-storage operations.

Nation/World

GE shareholders reject proposals for pay scrutiny

CHARLOTTE, N.C. — General Electric shareholders turned back proposals yesterday that would have subjected executive compensation at the company to closer scrutiny.

The executive severance proposal was defeated 51.7 percent to 48.3 percent, while the proposal on poison pills — defenses adopted by companies to make hostile takeovers more difficult — lost 52.3 percent to 47.7 percent, GE said.

All 13 shareholder proposals discussed at the meeting were opposed by GE's board of directors, and all were defeated.

Support for the executive severance proposal was buoyed by controversy over the package given to retired GE head Jack Welch.

Court papers filed in Welch's pending divorce from Jane Beasley Welch have said that, among other perks, Welch received use of GE-provided jets, a company-owned Manhattan, New York, apartment, flowers, food-service staffs, tickets for major sporting events and a limousine service. Welch has disputed the accuracy of the list.

HealthSouth auditing firm was aware of irregularities

BIRMINGHAM, Ala. — An Ernst & Young auditor testified yesterday that his company was made aware of accounting irregularities at HealthSouth last June but accepted the explanation of HealthSouth executives for the apparent discrepancies.

Ernst & Young auditor James Lamphron, appearing at a court hearing on whether HealthSouth founder and former CEO Richard Scrushy can access his frozen assets, said a HealthSouth employee notified the outside auditors in late June 2002 about accounting problems at the company.

The U.S. Securities and Exchange Commission has accused Scrushy and HealthSouth, an operator of rehabilitation hospitals and surgical clinics, of deliberately overstating earnings by $1.4 billion since 1999.

Criminal charges filed against 10 former HealthSouth executives put the figure at $2.5 billion, dating back to 1994, in a scandal that has left the company battling to avoid bankruptcy. Scrushy is a target of criminal and Congressional investigations, but has not been charged with any criminal wrongdoing.

Compiled from Seattle Times business staff and The Associated Press.

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