The Wall Street Journal - 23.08.2019

THE WALL STREET JOURNAL. **** Friday, August 23, 2019 |B3

News Corpis developing a
news-aggregation service
meant to address concerns
thatAlphabetInc.’s Google
News and other digital plat-
forms don’t reward publish-
ers’ work adequately and play
down articles from certain
types of sites, according to
people familiar with the plans.
The service, currently called
Knewz.com, is expected to be a
website and a mobile app. An
early version is being shown to
a small group of News Corp
executives, and an official
launch could come later this
year, though no specific time-
line has been set, the people
said. The company could still
decide not to proceed with the
project, they said.
The service will draw from
hundreds of news sources, in-
cluding national outlets such
as The Wall Street Journal,
New York Times, Washington
Post and NBC News as well as
digital-native players, maga-
zine publishers and local
newspapers, the people said.
News Corp owns Dow Jones &
Co., which publishes The Wall
Street Journal.
The articles on Knewz.com
will link directly to publishers’
sites, and News Corp won’t
take a cut of the advertising
revenue the articles generate.
News Corp also expects to
share data with those publish-
ers. The service will aim to
promote original news reports
rather than those that are
quick rehashes of existing arti-
cles, and it will treat subscrip-
tion news sites the same as
nonsubscription sites in deter-
mining which articles to link
to, the people familiar with the
plans said.
News Corp isn’t striking li-
censing deals with media com-
panies for the service, since it
is simply linking out to their
sites without hosting their
content on its platform or
charging for it, one of the peo-
ple said.
The project aims to give ex-
posure to smaller outlets that
News Corp executives believe
are often demoted in Google’s
search results andFacebook
Inc.’s social feed, the people
said. That includes publishers
with conservative audiences
such as the Daily Wire, Daily
Caller, Washington Free Bea-
con and Washington Examiner,
according to some of the peo-
ple.
Representatives for Google
and Facebook had no com-
ment. The companies have
said their algorithms don’t
rank or prioritize content
based on the political leanings
of news organizations.

BYJEFFREYA.TRACHTENBERG
ANDLILLIANRIZZO

News Corp

Pursues

News-App

Project

developed a Monopoly edition

for the popular videogame

“Fortnite.” Mattel Inc. has

launched a studio to create

films based on Barbie and

other toys.

Shares of Hasbro fell 5% in

after-hours trading. The stock

is up nearly 41% so far this

year.

Entertainment One also

produces television program-

ming and develops film for

adults, and it operates a mu-

sic business.

Hasbro said the company

has proven experience in film

and television.

Hasbro said it expects to

achieve $130 million in annual

cost savings related to the

deal by 2022.

Those savings will be real-

ized by moving part of Enter-

tainment One’s toy business

in house and boosting the

profitability of its licensing

and merchandising activities.

The companies said the

deal must be approved by the

Ontario Superior Court of

Justice in Canada, as well as

Entertainment One sharehold-

ers.

Hasbro also said that key

Entertainment One executives

have agreed to stay on at the

company after the deal is

completed.

els built on the same technol-

ogy. Volkswagen expects to

build one million electric cars

with this technology by 2025

and a total of 15 million before

the next basic upgrade.

The new model is also

meant as Volkswagen’s exhibit

A in its argument that it has

left its dirty diesel past be-

hind. The diesel emissions-

cheating scandal of 2015 tar-

nished the auto maker’s image

while costing the company

about $30 billion in fines, pen-

alties and consumer compen-

sation.

Volkswagen has even

changed its iconic blue-and-

white badge. The 3-D logo has

been flattened out, making it

sharper and improving its dis-

play on digital devices.

Bumper to bumper, the ID.3

is about as big as the Golf. But

without an internal combus-

tion engine, its interior is spa-

cious, as roomy as the Passat,

the Golf’s upscale cousin.

The electric car, which is

packed with driver-assistance

technology and connected to

the internet, is already open

for preorders in Europe, start-

ing at around €30,000

($33,000).

The ID.3 won’t be sold in

the U.S. Instead, Volkswagen

plans to offer the ID “Crozz,”

an electric SUV using the

same technology and pro-

duced at its plant in Chatta-

nooga, Tenn.

The idea for the ID.3 was

born in October 2015 in the

weeks after U.S. authorities

disclosed that Volkswagen had

rigged millions of diesel cars

to cheat emissions testing and

hid the scam from environ-

mental regulators for years.

At Thursday’s event, com-

pany executives showed an ad-

vertising spot for the ID.3,

flashing a succession of im-

ages of the car and its follow-

on models, including the ID

Crozz SUV and a retro knock-

off of Volkswagen’s famous

hippy van. An image of Swed-

ish climate-change activist

Greta Thunberg was also in-

cluded.

“We are on the road to cre-

ating emissions-free mobility

for everyone,” said Jürgen

Stackmann, the company’s

sales chief.

WOLFSBURG, Germany—

VolkswagenAG unveiled the

first of a generation of vehi-

cles it is betting will take the

electric car out of its tiny mar-

ket niche and make it the new

car for the masses.

At the company’s design

center on Thursday, executives

presented the ID.3 hatchback,

the first model based on

Volkswagen’s new standard-

ized electric car technology.

The car is set to go into pro-

duction in Germany in the

coming weeks with its official

launch in Europe planned for

the Frankfurt Motor Show

next month.

The self-parking ID.3 is part

of a wave of technologically

advanced vehicles that big-

volume car makers hope will

enable them to regain the ini-

tiative from upstarts like Tesla

Inc.

The launch is a milestone

for Volkswagen, which has in-

vested heavily in the transi-

tion from combustion engines

to electric vehicles despite

the slowdown in global car

sales that is hurting manufac-

turers.

Electric cars remain a niche

product largely dominated by

expensive brands such as

Tesla, Jaguar and Audi. In or-

der for the industry’s huge bet

on electrification to pay off,

car makers win over mass-

market customers, not just af-

fluent environmentally con-

scious consumers.

Volkswagen envisions the

ID.3 becoming as ubiquitous

on the world’s highways as the

original Volkswagen, the Bee-

tle, was in the years after

World War II before the Golf

compact became the com-

pany’s best seller.

The ID.3 is the pace-setter

for a planned fleet of 20 mod-

BYWILLIAMBOSTON

Volkswagen Makes Electric Move

BUSINESS NEWS

The self-parking ID.3 is the first model based on the German auto maker’s new standardized electric-car technology.

ODD ANDERSEN/AGENCE FRANCE-PRESSE/GETTY IMAGES

HasbroInc. said Thursday
it agreed to pay $4 billion in
cash to acquire Entertain-
ment OneLtd., a Toronto-
based company that produces
content for children and
adults.
Hasbro, which is based in
Pawtucket, R.I., said the Ca-
nadian company’s entertain-
ment properties appealing to
infants and preschoolers were
a major motivator of the deal.
Entertainment One’s lineup
includes “Peppa Pig,” which
follows a family of pigs; “PJ
Masks,” about a trio of he-
roes, and “Ricky Zoom,” a se-
ries whose main character is a
red rescue bike.
Hasbro executives cited
“Peppa Pig” and “PJ Masks”
as brands that generate
strong earnings in multiple
arenas including live shows,
theme parks, toys, and televi-
sion.
‘“Peppa Pig’, ‘PJ Masks’ and
other brands in development
are highly profitable and mer-
chandisable,” Hasbro Chief
Executive Brian Goldner told
analysts on a conference call
to discuss the deal. “These
brands have many of the char-
acteristics and profitability of
our franchise brands.”
As toy sales have weakened
in recent years, toy and enter-
tainment companies have
been looking to use their as-
sets in a variety of ways.
For example, Hasbro has

BYMICAHMAIDENBERG

Hasbro Nets ‘Peppa Pig’ in $4 Billion Deal

As sales have weakened in recent years, toy companies have been looking for new avenues.

MATTHEW KNIGHT/AGENCE FRANCE-PRESSE/GETTY IMAGES

March 14, but didn’t open a

formal probe until two months

later, with no explanation for

the gap.

“There is no documenta-

tion,” FDA investigators Scott

T. Ballard and Mihaly S. Lig-

mond wrote in their Aug. 2 re-

port, as to why the probe “was

not opened until 15 May, 2019,

when the initial allegation is

documented as having been

reported on 14 March 2019.”

In a statement to The Wall

Street Journal, Novartis said

that during those two months,

it “conducted an independent

investigation with the support

of external counsel to deter-

mine the extent of data dis-

crepancies and whether they

could be explained.”

Novartis said the internal

probe had to be conducted in a

“very confidential manner” so

that senior executives at

AveXis—its Illinois-based unit

that produced the drug—

wouldn’t attempt to interfere.

The company also said it plans

to file a full written explana-

tion of the gap to the FDA as

early as this week.

In its statement, the com-

pany said that the investiga-

tion it formally launched in

May was a “full technical qual-

ity investigation by our quality

organization...requiring signif-

icant time and resources, and

the extensive review of physi-

cal and electronic documents,

test data and laboratory

notes.”

Novartis, in a report filed

with the FDA about the data

issue, said it began a formal

investigation May 8.

Novartis announced last

week that it had replaced two

research executives at AveXis

who led the research into the

medicine, chief scientific offi-

cer Brian Kaspar and research

chief Allan Kaspar. Allan Kas-

par couldn’t be reached. An at-

torney for his brother Brian

Kaspar said “he has cooper-

ated in the internal investiga-

tion and categorically denies

any wrongdoing.”

In interviews, FDA officials

said that two months to open

an investigation seems exces-

sive, especially when FDA ac-

tion on a major drug was

pending. They said the agency

should have been notified as

soon as the company sus-

pected data manipulation, and

that the data problems, had

they been known, could have

delayed approval.

In a Twitter message Aug.

6, FDA Commissioner Ned

Sharpless said agency officials

“take the issue of data integ-

rity very seriously.” The FDA,

he said, “will use its full au-

thorities to take action, if ap-

propriate, which may include

civil or criminal penalties.”

The data manipulation oc-

curred in animal tests accom-

panying human clinical testing

and involved giving various

strengths of Zolgensma to

mice to measure how long

they lived. This was a small

part of the overall testing.

Both the company and the

federal agency said that the

data manipulation, if known,

wouldn’t have affected the fi-

nal decision on Zolgensma,

which is considered the

world’s most expensive drug.

WASHINGTON—Federal

regulators examining test data

manipulation for a gene-ther-

apy drug made byNovartis

AG are zeroing in on the com-

pany’s two-month delay in

launching a formal inquiry, ac-

cording to documents and in-

terviews.

The drug, Zolgensma, is

used to treat a sometimes fa-

tal form of spinal muscular at-

rophy in children and costs

about $2.1 million for a one-

time infusion. The Food and

Drug Administration said this

month that it wasn’t informed

about the data manipulation

until after it approved use of

the drug May 24.

FDA officials, who subse-

quently inspected the com-

pany’s control testing lab in

San Diego, noted that Novartis

became aware of the problem

BYTHOMASM.BURTON

Novartis Delay on Data Manipulation Probed

The FDA is looking

at a two-month

delay in opening a

formal inquiry.

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