Business news in brief

Merck & Co. Inc. announced yesterday that it would pay $75 million to Ariad Pharmaceuticals Inc. to jointly develop a late-stage cancer drug. Merck, Whitehouse Station, N.J., could pay more than a $1 billion more to Ariad if the compound, an mTOR inhibitor now called AP23573, reaches certain benchmarks. The drug, which targets cancers of the connective tissues called metastatic sarcomas, is scheduled to begin Phase 3 trials this quarter. Shares of Merck closed up $1.87 at $50.77. Shares of Ariad closed down 28 cents at $5.77.

- Karl Stark

Five Philadelphia economic development agencies will receive about $1 million in grants from the Citizens Bank Foundation. The grants will be distributed over the next three years to the Metropolitan Career Center, the Philadelphia Opportunities Industrialization Center, the Enterprise Center, the Greater Philadelphia Minority Business Strategic Alliance, and the Business Center at New Covenant Campus.

- Inquirer Staff

Unisys Corp., Blue Bell, said it had won a contract with the Ohio Supreme Court to develop a pilot project for a judicial data warehouse to integrate data from the information systems in 17 Ohio courts. Unisys said the one-year contract for the project, known as the Ohio Courts Network, is worth about $2.2 million. Eventually, the project will incorporate 360 other courts, resulting in "one-stop shopping" for Ohio court data that will allow statistical analysis and search capability across jurisdictions.

- Linda Loyd

GSI Commerce Inc., King of Prussia, said it signed an agreement to conduct Web retail operations for the Nautica and Kipling apparel brands. The multiyear agreement is with a subsidiary of VF Corp., Greensboro, N.C., GSI said in a news release. The value of the deal was not disclosed. GSI's Nautica Web store will open in 2008 and will offer apparel and accessories for men, women and children. Its Kipling site will offer handbags, backpacks, luggage and accessories, also starting in 2008. GSI provides e-commerce support for about 60 retailers. Its shares closed up 48 cents at $23.50 in Nasdaq trading.

- Reid Kanaley

Chief executive officer Ed Zander's job at Motorola Inc. is on the line more than ever after he warned that the struggling company's cell phone unit will be unprofitable at least until 2008. The acknowledgment came as Motorola warned Wednesday of a shortfall in second-quarter revenue because of weaker-than-expected handset sales and said it would post an operating loss because of poor results in its cell phone units in Asia and Europe. Standard & Poor's put Motorola's long-term ratings under review for a possible downgrade, the ratings agency said. The company reports second-quarter earnings Thursday. Shares of Motorola nevertheless closed up 13 cents at $18.08 yesterday.

- AP

Hotel operator Marriott International Inc. said second-quarter earnings rose 11 percent on higher demand for rooms, but its stock dipped on signs that growth in the lodging industry may be cooling off. The Bethesda, Md., company reported net income of $207 million, or 51 cents a share, for the three months ended June 15, up from $186 million, or 43 cents a share, a year earlier. Revenue rose to $3.21 billion from $2.89 billion a year earlier. Excluding a charge of $54 million, or 13 cents a share, because of a tax settlement with the federal government and the results of the company's synthetic-fuel business, second-quarter earnings were $229 million, or 57 cents a share. Marriott shares dropped $1.31 to close at $45.04 yesterday.

- AP

Rates on 30-year mortgages rose this week to the second-highest level of the year as financial markets reacted to stronger economic news. Freddie Mac, the mortgage company, reported that 30-year fixed-rate mortgages averaged 6.73 percent this week. That was up from 6.63 percent last week and was close to the high point of the year, which was 6.74 percent during the week of June 14. In the following three weeks, rates had edged down slightly. Rates on one-year adjustable-rate mortgages remained at 5.71 percent this week, unchanged from last week.

- AP

Consumers can start applying to receive their share of a $325 million settlement that 49 states negotiated with Ameriquest Mortgage Co., once the biggest home-loan lender to people with credit problems. The settlement resolves allegations that from 1999 to 2005, Ameriquest, a unit of closely held ACC Capital Holdings, failed to disclose home-loan terms adequately, refinanced borrowers into inappropriate mortgages, inflated appraisals, and charged excessive fees. About 15,000 Pennsylvania consumers will be eligible for about $10 million in restitution, while about 14,000 New Jerseyans may receive a total of $11.7 million.

- Bloomberg News

First-time claims for jobless benefits fell last week to the lowest figure in almost two months, adding to evidence that the labor market is holding up going into the second half of the year. Initial jobless claims decreased 12,000, to 308,000, in the week that ended July 7, the Labor Department said. The four-week moving average, a less volatile measure, dropped to 317,750 from 319,250.

- Bloomberg News

The jury in the Chicago federal trial of Conrad Black, the former Hollinger International Inc. chairman, ended its 11th day of deliberating the U.S. government's fraud and racketeering case against him without reaching a verdict. The jurors left the courthouse about 4:15 local time after telling U.S. District Judge Amy St. Eve they would return today, according to an e-mailed message from her chambers. The panel on July 10 told her in a note it was divided on some charges. The judge told the jury to keep trying.

- Bloomberg News

Tweeter Home Entertainment Group Inc. said it had accepted a $38 million bid for its assets as the best offer in the high-end electronics retailer's Chapter 11 bankruptcy. The bid from Schultze Asset Management L.L.C. was one of two offers that Tweeter said June 26 it had received in the initial phase of a court-supervised auction. Other bidders were then given the chance to submit competing offers. Schultze agreed to acquire all of Tweeter's assets in a "going concern" bid to maintain Tweeter's business operations and its 103 stores, Canton, Mass.-based Tweeter said. Schultze agreed to assume costs related to the bankruptcy and offer a $10 million line of credit to help Tweeter buy merchandise and cover other expenses during bankruptcy.

- AP