A muted recovery is forecast for U.S. and global economies

WASHINGTON — In a grim new forecast, a leading international economic group sharply cut its outlook for U.S. and global growth next year and warned that the debt crisis in Europe and fiscal policy risks in America could plunge the world back into recession.

As it stands now, the industrialized world is looking at a muted and uneven recovery over the next two years, according to the Organization for Economic Cooperation and Development.

The Paris-based OECD projected gross domestic product across its 34 member nations — which include the U.S., Japan and the 17-nation Eurozone — to grow a sluggish 1.4% next year. That is down from 2.2% that the group had forecasted six months earlier.

Growth prospects in the U.S. also were slashed for next year. Experts at the OECD now see inflation-adjusted GDP, the broadest measure of economic activity, rising 2% next year in the U.S., roughly equivalent to this year and down from its earlier forecast of an increase of 2.6%.

The new projections are all the more sobering in that they are based on assumptions that Europe's debt crisis won't get much worse and that the U.S. won't go over the so-called fiscal cliff — a combination of more than $500 billion in automatic tax hikes and federal spending cuts slated to begin at the start of next year.

"If key adverse risks cannot be averted, and especially if the Eurozone crisis were to intensify significantly, the likely outcome would be considerably weaker, potentially plunging the global economy into deep recession and deflation, with large additional rises in unemployment," the OECD said.

The report, released Tuesday, is on the pessimistic side.

Although economists widely agree on the recession risks in the event that the U.S. isn't able to solve the fiscal impasse, a number of experts now say that the U.S. and global economies could see considerably stronger growth next year if Washington can reach agreement on tax and spending policies that avoid a big fiscal contraction in 2013.

"The economy in the U.S. is really poised to grow," said Bernard Baumohl, chief global economist at the Economic Outlook Group, noting that GDP growth in the U.S. could surge to a solid 3.5% or higher next year if the budget issues are resolved.

The latest forecast from the Federal Reserve, compiled in mid-September, sees U.S. GDP increasing 2.5% to 3% next year.

Baumohl's reasons for greater optimism include a recovering housing market, improving job growth and healthier personal finances, all of which should help drive stronger consumer spending.

Total consumer debt, which has fallen for four years, dropped by $74 billion to $11.31 trillion in the third quarter from the previous quarter, and it is now down $1.37 trillion from the peak in September 2008, according to a report Tuesday from the New York Fed.

Reflecting these trends, the Conference Board said Tuesday that its latest survey showed consumer confidence at its highest level since early 2008, results similar to a survey by the University of Michigan.

American business sentiments, however, have been more cautious of late, and many companies have held back on making investments in recent months. But banks are generally in good shape, and big companies are sitting on mountains of cash and are expected to ramp up investments once the fiscal and tax pictures become clearer.

The OECD report nodded to these factors, but noted that the global recovery slowed markedly over the last year amid faltering confidence and weakening world trade, in part because of problems in the Eurozone, which contributed to an unexpectedly strong slowdown in developing countries such as China.

The 17-nation Eurozone will probably remain in recession well into next year, the OECD said.

Meanwhile, Japan, the world's third-largest economy, has fallen back into a downturn after a growth spurt last year aided by massive reconstruction spending following the earthquake and tsunami in March 2011. The Japanese economy is expected to move at a lumbering pace over the next two years.

The outlook for China, Brazil and India — three of the biggest developing economies, none of which is a member of the OECD — looks comparatively brighter:  Growth will probably accelerate next year and in 2014, with China, the world's second-largest economy, again leading the pack.

The OECD forecast sees China's GDP expanding 8.5% next year and nearly 9% in 2014 after slowing this year to about 7.5%.

Although far from immune from the troubles in the U.S. and Europe, which still account for much of the global demand for goods, China and other major emerging economies have more wherewithal to boost growth than their more-indebted developed counterparts by ramping up government spending and lowering interest rates.

The report notes that spending cuts throughout OECD member countries have taken a toll on economic growth, particularly in the Eurozone, where GDP growth for next year was slashed to -0.1% from a positive rate of 0.9%.

Many developed countries are now struggling with financial and economic challenges related to an aging population, large public debts and high unemployment.

Assuming Europe's debt crisis stabilizes, the Eurozone is forecast to recover in 2014. For OECD countries overall, GDP growth is projected to pick up in 2014 to 2.3%.

The U.S. economy is expected to outperform most other OECD nations in 2014, with its GDP stepping up to a more sturdy growth of 2.8%. That compares with the Fed's forecast of 3% to 3.8% growth in 2014.

Either way, U.S. economic growth isn't likely to come close to keeping up with the rapid advance of developing countries, notably China.

Last year, the U.S. accounted for 23% of the global economy, with the Eurozone and China tied for second, each with a 17% share each.

But by 2030, the OECD estimates, China's share of the global economy will rise to 28%, while the U.S. will slip to No. 2 with 18% of world GDP, and the Eurozone's share will fall to 12%.

don.lee@latimes.com

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Congress returns as 'fiscal cliff' talks slow

WASHINGTON – Congress returned in a lame duck session with no signs of quick compromise to prevent a tax hike for most Americans early next year.

Talks between the White House and Republican leaders in the House continued behind closed doors. Current tax rates expire Dec. 31.

Emboldened by his re-election, President Obama took his case for raising taxes on the wealthiest Americans to the public on Monday. He warned that the threat of higher taxes on middle-class Americans could dampen the Christmas shopping season.

"The President has called on Congress to take action and stop holding the middle class and our economy hostage over a disagreement on tax cuts for households with incomes over $250,000 per year," the White House said in a statement.

Quiz: How much do you know about the fiscal cliff?

The White House got a boost from billionaire investor Warren Buffett, who said the wealthy – himself included – should pay more. Noting the nation’s growing gap in income disparity, Buffett dismissed the Republican argument that tax hikes would hamper investments.

“In recent years, my gang has been leaving the middle class in the dust,” Buffett said. “So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased.”

Key Republicans, including House Speaker John A. Boehner, have signaled they are willing to put new tax revenues on the table, creating the outlines of a possible deal. Several Republican lawmakers used the Sunday talk shows to distance themselves from their party’s anti-tax pledge, publicly breaking with conservative stalwart Grover Norquist, although they insisted any agreement must include spending cuts.

A so-called grand bargain of tax hikes and spending cuts has eluded Washington in the past, but both political parties are wary of rattling the financial markets and sparking a crisis in consumer spending. Wall Street has signaled a bold deficit-reduction plan is needed to prevent a credit downgrade.

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No talks between the president and congressional leaders have been scheduled. The parties had agreed to meet this week to put the framework of a two-part deal on the table.

If Republicans continue to fight higher tax rates for the wealthy, Boehner will face pressure to propose an alternative way to raise new revenue – either by closing individual loopholes or capping deductions in a way that produces new money.

“Congressional and White House staff continue to work to find common ground that is consistent with the ‘balanced approach’ the White House says it wants – with significant spending cuts, and without job-killing small business tax hikes,” said a senior House leadership aide.

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Lisa.Mascaro@latimes.com

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Man accused of stealing Tim Allen's Chevy Impala

DENVER (AP) — A man suspected of stealing one of Tim Allen's custom cars says the comedian left the keys so he could drive it to Denver.

Denver police spokesman Sonny Jackson said Monday that 34-year-old Faustino Ibarra is being held without bond while awaiting extradition to California after his arrest on Saturday.

In a jailhouse interview with KDVR-TV (http://bit.ly/TpJirK ), Ibarra claimed Allen adopted him years ago. Jackson said there is no evidence of any adoption.

Ibarra said Allen had left the door to his garage open along with the keys.

Police confirmed that the customized 1996 Chevrolet Impala SS belonged to the "Home Improvement" star but said it hadn't yet been reported stolen when it turned up in Denver.

Allen's publicist Marleah (mar-LEE-uh) Leslie said she wouldn't comment because it's a police matter.

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Amid Hurricane Sandy, a Race to Get a Liver Transplant

It was the best possible news, at the worst possible time.

The phone call from the hospital brought the message that Dolores and Vin Dreeland had long hoped for, ever since their daughter Natalia, 4, had been put on the waiting list for a liver transplant. The time had come.

They bundled her into the car for the 50-mile trip from their home in Long Valley, N.J., to NewYork-Presbyterian Morgan Stanley Children’s Hospital in Manhattan. But it soon seemed that this chance to save Natalia’s life might be just out of reach.

The date was Sunday, Oct. 28, and Hurricane Sandy, the worst storm to hit the East Coast in decades, was bearing down on New York. Airports and bridges would soon close, but the donated organ was in Nevada, five hours away. The time window in which a plane carrying the liver would be able to land in the region was rapidly closing.

In a hospital room, Natalia watched cartoons. Her parents watched the clock, and the weather. “Our anxiety was through the roof,” Mrs. Dreeland said. “It just made your stomach into knots.”

The Dreelands, who are in their 60s, became Natalia’s foster parents in 2008 when she was 7 months old, and adopted her just before she turned 2. They have another adopted daughter, Dorothy Jane, who is 17.

Natalia is a “smart little cookie” who loves school and dressing up Alice, her favorite doll, her mother said. At age 3, Natalia used the word “discombobulated” correctly, Mr. Dreeland said.

Natalia’s health problems date back several years. Her gallbladder was taken out in 2010, and about half her liver was removed in 2011. The underlying problem was a rare disease, Langerhans cell histiocytosis. It causes a tremendous overgrowth of a type of cell in the immune system and can damage organs. Drugs can sometimes keep it in check, but they did not work for Natalia.

In her case, the disease struck the bile ducts, which led to progressive liver damage. “She would have eventually gone into liver failure,” said Dr. Nadia Ovchinsky, a pediatric liver transplant specialist at NewYork-Presbyterian. “And she demonstrated some signs of early liver failure.”

The only hope was a transplant.

Dr. Tomoaki Kato, Natalia’s surgeon, knew that the liver in Nevada was a perfect match for Natalia in the two criteria that matter most: blood type and size. The deceased donor was 2 years old, and though Natalia is nearly 5, she is small for her age. Scar tissue from her previous operations would have made it very difficult to fit a larger organ into her abdomen.

Though Dr. Kato had considered transplanting part of an adult liver into Natalia, a complete organ from a child would be far better for her. But healthy organs from small children do not often become available, Dr. Kato said. This was a rare opportunity, and he was determined to seize it.

But as the day wore on, the odds for Natalia grew slimmer. The operation in Nevada to remove the liver was delayed several times.

At many hospitals, surgery to remove donor organs is done at the end of the day, after all regularly scheduled operations. The Nevada hospital had a busy surgical schedule that day, made worse by a trauma case that took priority.

At the hospital in New York, Tod Brown, an organ procurement coordinator, had alerted a charter air carrier that a flight from Nevada might be needed. That company in turn contacted West Coast carriers to pick up the donated liver and fly it to New York.

Initially, two carriers agreed, but then backed out. Several other charter companies also declined.

Mr. Brown told Dr. Kato that they might have to decline the organ. Dr. Kato, soft-spoken but relentless, said, “Find somebody who can fly.”

Dr. Kato used to work in Miami, where pilots found ways to bypass hurricanes to deliver organs. Even during Hurricane Katrina, his hospital performed transplants.

“I asked the transplant coordinators to just keep pushing,” he said.

Mr. Brown said, “Dr. Kato knew he was going to get that organ, one way or another.”

As the trajectory of the storm became clearer, one of the West Coast charter companies agreed to attempt the flight. The plan was to land at the airport in Teterboro, N.J. The backup was Newark airport, and the second backup was Albany, from where an ambulance would finish the trip.

The timing was critical: organs deteriorate outside the body, and ideally a liver should be transplanted within 12 hours of being removed.

Early Monday, as the storm whirled offshore, the plane landed at Teterboro. Soon a nurse rushed to tell the Dreelands that she had just seen an ambulance with lights and sirens screech up to the hospital. Someone had jumped out carrying a container.

At about 5 a.m., the couple kissed Natalia and saw her wheeled off to the operating room.

Three weeks later, she is back home, on the mend. The complicated regimen of drugs that transplant patients need is tough on a child, but she is getting through it, her father said.

Recently, Mr. Dreeland said, he found himself weeping uncontrollably during a church service for the family of the child who had died. “Their child gave my child life,” he said.

Though only time will tell, because the histiocytosis appeared limited to Natalia’s bile ducts and had not affected other organs, her doctors say there is a good chance that the transplant has cured her.

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FDA halts operations at peanut butter plant

The Food and Drug Administration halted operations of the country's largest organic peanut butter processor Monday, cracking down on salmonella poisoning for the first time with the new enforcement authority the agency gained in a 2011 food safety law.

FDA officials found salmonella all over Sunland Inc.’s New Mexico processing plant after 41 people in 20 states, most of them children, were sickened by peanut butter manufactured at the Sunland plant and sold at Trader Joe's grocery chain. The FDA suspended Sunland's registration Monday, preventing the company from producing or distributing any food.

The food safety law gave the FDA authority to suspend a company's registration when food manufactured or held there has a “reasonable probability” of causing serious health problems or death. Before the food safety law was enacted early last year, the FDA would have had to go to court to suspend a company's registration.

Sunland had planned to reopen its peanut processing facility on Tuesday and a spokeswoman said before the FDA's announcement Monday that the company hoped to be selling peanut butter again by the end of the year. The spokeswoman didn't have immediate comment on the suspension.

The company now has the right to a hearing and must prove to the agency that its facilities are clean enough to reopen.

Michael Taylor, the FDA's deputy commissioner for foods, said the FDA's ability to suspend a registration like this one is a major step forward for the agency.

“Consumers can be assured that products will not leave this facility until we determine they have implemented preventive measures that are effective to produce safe products,” Taylor said.

Sunland Inc. is the nation's largest organic peanut butter processor, though it also produces many non-organic products. The company recalled hundreds of organic and non-organic nuts and nut butters manufactured since 2010 after Trader Joe's Valencia Creamy Peanut Butter was linked to the salmonella illnesses in September.

In addition to Trader Joe's, Sunland sold hundreds of different peanut products to many of the nation's other large grocery chains, including Whole Foods, Safeway, Target and others.

In a monthlong investigation in September and October, after the outbreak linked to processor Sunland and to Trader Joe's, FDA inspectors found samples of salmonella in 28 different locations in the plant, in 13 nut butter samples and in one sample of raw peanuts.

The agency also found improper handling of the products, unclean equipment and uncovered trailers of peanuts outside the facility that were exposed to rain and birds.

The FDA said that over the past three years, the company shipped products even though portions of their lots, or daily production runs, tested positive for salmonella in internal tests. The agency also found that the internal tests failed to find salmonella when it was present.

FDA inspectors found many of the same problems — including employees putting their bare fingers in to empty jars before they were filled, open bags of ingredients, unclean equipment, and many other violations — in a 2007 inspection. Similar problems were recorded by inspectors in 2009, 2010 and 2011, though government officials didn't take any action or release the results of those inspections until after the illnesses were discovered this year.

In a statement earlier this month, Sunland officials denied that they knowingly shipped tainted products.

“At no time in its 24-year history has Sunland, Inc. released for distribution any products that it knew to be potentially contaminated with harmful microorganisms,” Sunland president and CEO Jimmie Shearer said in a statement on the company's website. “In every instance where test results indicated the presence of a contaminant, the implicated product was destroyed and not released for distribution.”

A separate peanut butter outbreak in 2009 not related to Sunland was linked to hundreds of illnesses and nine deaths.

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Graham, King depart from Norquist's anti-tax pledge

Americans for Tax Reform president Grover Norquist explains his anti-tax pledge.

By Morgan Little

November 25, 2012, 12:24 p.m.

Sen. Lindsey Graham (R-S.C.) on Sunday joined the ranks of Republican lawmakers stepping away from Grover Norquist’s famous anti-tax pledge, offering to cut his support for the pledge – with a catch.

“I will violate the pledge for the good of the country only if Democrats will do entitlement reform,” he said on ABC’s “This Week,” adding that “the only pledge we should be making to each other is to avoid being Greece.”

Graham specified that although he agrees with Norquist's stand against raising tax rates and not raising taxes for wealthy Americans, he disagrees with him on deduction caps and buying down debt.

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Graham was accompanied by Rep. Peter King (R-N.Y.), who said that “the world has changed,” and sticking to the pledge was a non-starter.

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“If I were in Congress in 1941, I would have signed a declaration of war against Japan. I’m not going to attack Japan today,” he said, asserting that pledges should apply only to the era in which they are signed.

Nonetheless, King remained confident that House Speaker John A. Boehner would do “everything he can to avoid raising tax rates” during negotiations with Democrats.

Norquist’s “Taxpayer Protection Pledge” has been a calling card for Republicans, and a sticking point for Democrats, since its inception in 1986. It calls for the signer to oppose “any and all efforts” to increase tax rates, and to oppose the reduction or elimination of deductions or credits, unless those reductions are met with tax-rate cutbacks.

Graham and King joined Sen. Saxby Chambliss (R-Ga.), who said Wednesday that “I care more about my country than I do about a 20-year-old pledge.”

Chambliss, speaking with Georgia television station WMAZ-TV Channel 13, said he’s ready to “let the political consequences take care of themselves,” setting the stage for Graham and King’s remarks Sunday.

Norquist responded to Chambliss, stating that “his promise is to the people of Georgia."

PHOTOS: President Obama’s past

Norquist also brought attention to a letter Chambliss signed in 2011, promising not to vote for tax increases.

“If he plans to vote for higher taxes to pay for Obama-sized government, he should address the people of Georgia and let them know that he plans to break his promise to them,” Norquist said in a statement, the principles of which also apply to Graham's and King’s comments.

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Nokia imaging chief to quit

HELSINKI (Reuters) – Nokia‘s long-time imaging chief Damian Dinning has decided to leave the loss-making cellphone maker at the end of this month, the company said in a statement.

The strong imaging capabilities of the new Lumia smartphone models are a key sales argument for the former market leader, which has been burning through cash while losing share in both high-end smartphones and cheaper handsets.

Nokia’s Chief Executive Stephen Elop has replaced most of the top management since he joined in late 2010 and Dinnig is the latest of several executives to leave.

Dinning did not want to move to Finland as part of the phonemakers’ effort to concentrate operations and will join Jaguar Land Rover to head innovations in the field of connected cars, he said on Nokia’s imaging fan site PureViewclub.com.

(Reporting By Tarmo Virki, editing by William Hardy)

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'Twilight,' Bond, 'Lincoln' lead record weekend

LOS ANGELES (AP) — Bella Swan, James Bond and Abe Lincoln have combined to lift Hollywood to record Thanksgiving revenue at the box office.

Kristen Stewart's finale as Bella in "The Twilight Saga: Breaking Dawn — Part 2" was No. 1 again with $64 million during the five-day holiday stretch that began Wednesday, according to studio estimates Sunday.

Daniel Craig's Bond adventure "Skyfall" came in at No. 2 with $51 million, while Daniel Day-Lewis and Steven Spielberg's Civil War saga "Lincoln" finished third with $34.1 million.

According to box-office tracker Hollywood.com, the three films paced Hollywood to an all-time Thanksgiving week best of about $290 million from Wednesday to Sunday.

That tops the previous record of $273 million over Thanksgiving in 2009, when "The Twilight Saga: New Moon" led the weekend.

This Thanksgiving also was a huge 25 percent jump from a year ago, when domestic revenues were a weak $232 million as some big holiday releases fizzled.

With a strong December lineup ahead, Hollywood has resumed its record revenue pace for the year after a brief box-office lull in late summer and early fall.

Domestic revenues for 2012 are at $9.75 billion, putting Hollywood potentially on track for its first $11 billion year, which would beat the 2009 record of $10.6 billion, said Hollywood.com analyst Paul Dergarabedian.

"We're barreling toward a record-breaking box-office year," Dergarabedian said. "It's built on the back of just a lot of really strong movies that have come out over the past few weekends. It bodes very well for the rest of the holidays."

The "Twilight" finale, "Skyfall" and "Lincoln" finished in the same top-three rankings for the second-straight weekend as new releases were unable to dislodge the holdovers.

Released by Lionsgate's Summit Entertainment banner, "Breaking Dawn — Part 2," pulled in $43.1 million from Friday to Sunday, raising its domestic total to $227 million. The movie added $97.4 million overseas to bring its international total to $350.8 million and its worldwide take to $577.7 million.

Sony's "Skyfall" also topped $200 million domestically, ringing up $36 million for the three-day weekend to put its U.S. total at $221.7 million. With $41.3 million more overseas, "Skyfall" raised its international revenues to $568.4 million and its worldwide sales to $790.1 million.

"Lincoln," a DreamWorks film distributed by Disney, took in $25 million over the weekend to lift its domestic revenue to $62.2 million.

Leading the newcomers was Paramount and DreamWorks Animation's tale "Rise of the Guardians" at No. 4 with $24 million for the weekend and $32.6 million since opening Wednesday.

Based on William Joyce's "Guardians of Childhood" books, "Rise of the Guardians" gathers Santa Claus, the Easter Bunny, the Tooth Fairy and other mythical beings as a team of heroes battling an evil overlord.

Close behind at No. 5 was director Ang Lee's shipwreck saga "Life of Pi" at No. 5 with $22 million over the weekend. The 20th Century Fox release has taken in $30.2 million domestically since its Wednesday debut and added $17.5 million in four Asian markets.

"Life of Pi" was adapted from Yann Martel's best-selling novel about an Indian youth adrift on a lifeboat with a Bengal tiger. Many fans considered the introspective novel impossible to film, but Lee has charmed audiences and critics with an inspiring survival story told through dazzling 3-D images.

The weekend's other new wide release, a remake of the 1980s U.S.-invasion tale "Red Dawn," opened at No. 7 with $14.6 million, raising its total to $22 million since debuting Wednesday.

"Red Dawn" sat on the shelf for three years while studio backer MGM went through bankruptcy, with distributor FilmDistrict eventually picking it up for domestic release. The movie's cast includes Chris Hemsworth ("Thor") and Josh Hutcherson ("The Hunger Games") in a story of young guerrillas battling North Korean invaders.

In limited release, Fox Searchlight's "Hitchcock" opened solidly with about $300,000 in 17 theaters. The movie stars Anthony Hopkins as Alfred Hitchcock in a behind-the-scenes story of the making of "Psycho."

The weekend's overall strength came from a broad range of films that clicked with various audiences, from action and family fare to thoughtful drama.

"This is a marketplace that has something for everyone," said Chris Aronson, head of distribution for 20th Century Fox. "You have something deeper like 'Life of Pi,' yet you have a very successful sequel in 'Twilight' at the same time. Adult bio-drama, if you will, in 'Lincoln,' and you have Bond. That's the secret to a very successful and balanced marketplace."

Estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Hollywood.com. Where available, latest international numbers are also included. Final domestic figures will be released Monday.

1. "The Twilight Saga: Breaking Dawn — Part 2," $43.1 million ($97.4 million international).

2. "Skyfall," $36 million ($41.3 million international).

3. "Lincoln," $25 million.

4. "Rise of the Guardians," $24 million ($10 million international).

5. "Life of Pi," $22 million ($17.5 million international)

6. "Wreck-It Ralph," $16.8 million ($2.1 million international).

7. "Red Dawn," $14.6 million.

8. "Flight," $8.6 million ($723,000 international).

9. "Silver Linings Playbook," $4.6 million ($1.6 million international).

10. "Argo," $3.9 million ($6 million international).

___

Estimated weekend ticket sales at international theaters (excluding the U.S. and Canada) for films distributed overseas by Hollywood studios, according to Rentrak:

1. "The Twilight Saga: Breaking Dawn — Part 2," $97.4 million.

2. "Skyfall," $41.3 million.

3. "Life of Pi," $17.5 million.

4. "Rise of the Guardians," $10 million.

5. "Argo," $6 million.

6. "Hotel Transylvania," $5.5 million.

7. "A Werewolf Boy," $4.2 million.

8 (tie). "Don't Cry, Mommy," $3.6 million.

8 (tie). "Evangelion: 3.0 You Can (Not) Redo," $3.6 million.

10. "Wreck-It Ralph," $2.1 million.

___

Online:

http://www.hollywood.com

http://www.rentrak.com

___

Universal and Focus are owned by NBC Universal, a unit of Comcast Corp.; Sony, Columbia, Sony Screen Gems and Sony Pictures Classics are units of Sony Corp.; Paramount is owned by Viacom Inc.; Disney, Pixar and Marvel are owned by The Walt Disney Co.; Miramax is owned by Filmyard Holdings LLC; 20th Century Fox and Fox Searchlight are owned by News Corp.; Warner Bros. and New Line are units of Time Warner Inc.; MGM is owned by a group of former creditors including Highland Capital, Anchorage Advisors and Carl Icahn; Lionsgate is owned by Lions Gate Entertainment Corp.; IFC is owned by AMC Networks Inc.; Rogue is owned by Relativity Media LLC.

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M.I.T. Lab Hatches Ideas, and Companies, by the Dozens

HOW do you take particles in a test tube, or components in a tiny chip, and turn them into a $100 million company?

Dr. Robert Langer, 64, knows how. Since the 1980s, his Langer Lab at the Massachusetts Institute of Technology has spun out companies whose products treat cancer, diabetes, heart disease and schizophrenia, among other diseases, and even thicken hair.

The Langer Lab is on the front lines of turning discoveries made in the lab into a range of drugs and drug delivery systems. Without this kind of technology transfer, the thinking goes, scientific discoveries might well sit on the shelf, stifling innovation.

A chemical engineer by training, Dr. Langer has helped start 25 companies and has 811 patents, issued or pending, to his name. That’s not too far behind Thomas Edison, who had 1,093. More than 250 companies have licensed or sublicensed Langer Lab patents.

Polaris Venture Partners, a Boston venture capital firm, has invested $220 million in 18 Langer Lab-inspired businesses. Combined, these businesses have improved the health of many millions of people, says Terry McGuire, co-founder of Polaris.

Along the way, Dr. Langer and his lab, including about 60 postdoctoral and graduate students at a time, have found a way to navigate some slippery territory: the intersection of academic research and the commercial market.

Over the last 30 years, many universities — including M.I.T. — have set up licensing offices that oversee the transfer of scientific discoveries to companies. These offices have become a major pathway for universities seeking to put their research to practical use, not to mention add to their revenue streams.

In the sciences in particular, technology transfer has become a key way to bring drugs and other treatments to market. “The model of biomedical innovation relies on research coming out of universities, often funded by public money,” says Josephine Johnston, director of research at the Hastings Center, a bioethics research organization based in Garrison, N.Y.

Just a few of the products that have emerged from the Langer Lab are a small wafer that delivers a dose of chemotherapy used to treat brain cancer; sugar-sequencing tools that can be used to create new drugs like safer and more effective blood thinners; and a miniaturized chip (a form of nanotechnology) that can test for diseases.

The chemotherapy wafer, called the Gliadel, is licensed by Eisai Inc. The company behind the sugar-sequencing tools, Momenta Pharmaceuticals, raised $28.4 million in an initial public offering in 2004. The miniaturized chip is made by T2Biosystems,  which completed a $23 million round of financing in the summer of 2011.

“It’s inconvenient to have to send things to a lab,” so the company is trying to develop more sophisticated methods, says Dr. Ralph Weissleder, a co-founder, with Dr. Langer and others, of T2Biosystems and a professor at Harvard Medical School.

FOR Dr. Langer, starting a company is not the same as it was, say, for Mark Zuckerberg with Facebook. “Bob is not consumed with any one company,” says H. Kent Bowen, an emeritus professor of business administration at Harvard Business School who wrote a case study on the Langer Lab. “His mission is to create the idea.”

Dr. Bowen observes that there are many other academic laboratories, including highly productive ones, but that the Langer Lab’s combination of people, spun-out companies and publications sets it apart. He says Dr. Langer “walks into the great unknown and then makes these discoveries.”

Dr. Langer is well known for his mentoring abilities. He is “notorious for replying to e-mail in two minutes, whether it’s a lowly graduate school student or the president of the United States,” says Paulina Hill, who worked in his lab from 2009 to 2011 and is now a senior associate at Polaris Venture Partners. (According to Dr. Langer, he has corresponded directly with President Obama about stem cell research and federal funds for the sciences.)

Dr. Langer says he looks at his students “as an extended family,” adding that “I really want them to do well.”

And they have, whether in business or in academia, or a combination of the two. One former student, Ram Sasisekharan, helped found Momenta and now runs his own lab at M.I.T. Ganesh Venkataraman Kaundinya is Momenta’s chief scientific officer and senior vice president for research.

Hongming Chen is vice president of research at Kala Pharmaceuticals. Howard Bernstein is chief scientific officer at Seventh Sense Biosystems, a blood-testing company. Still others have taken jobs in the law or in government.

Dr. Langer says he spends about eight hours a week working on companies that come out of his lab. Of the 25 that he helped start, he serves on the boards of 12 and is an informal adviser to 4. All of his entrepreneurial activity, which includes some equity stakes, has made him a millionaire. But he says he is mainly motivated by a desire to improve people’s health.

Operating from the sixth floor of the David H. Koch Institute for Integrative Cancer Research on the M.I.T. campus in Cambridge, Mass., Dr. Langer’s lab has a research budget of more than $10 million for 2012, coming mostly from federal sources.

The research in labs like Dr. Langer’s is eyed closely by pharmaceutical companies. While drug companies employ huge research and development teams, they may not be as freewheeling and nimble, Dr. Langer says. The basis for many long-range discoveries has “come out of academia, including gene therapy, gene sequencing and tissue engineering,” he says.

He has served as a consultant to pharmaceutical companies. Their large size, he says, can end up being an impediment.

“Very often when you are going for real innovation,” he says, “you have to go against prevailing wisdom, and it’s hard to go against prevailing wisdom when there are people who have been there for a long time and you have some vice president who says, ‘No, that doesn’t make sense.’ ”

Pharmaceutical companies are eager to tap into the talent at leading research universities. In 2008, for example, Washington University in St. Louis announced a $25 million pact with Pfizer to collaborate more closely on biomedical research.

But in some situations, the close — critics might say cozy — ties between business and academia have the potential to create conflicts of interest.

There was a controversy earlier this year when it was revealed that the president of the University of Texas M.D. Anderson Cancer Center owned stock in Aveo Oncology, which had announced earlier that the university would be leading clinical trials of one of its cancer drugs.  Last month, the University of Texas announced that he would be allowed to keep his ties with three pharmaceutical companies, including Aveo Oncology; his holdings will be placed in a blind trust.

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L.A. Auto Show to serve as stage for vehicles, technologies

On any Saturday afternoon, the unlikely mix of exotic coupes, vintage woodies and electric cars sharing Pacific Coast Highway makes clear why Southern California is the center of U.S. car culture.

A similarly diverse array of machinery has made the Los Angeles Auto Show the premier stage for both cutting-edge green cars and sportier offerings designed to carve up that famous coastal road.

This year's show, the first North American showcase of the model year, starts Wednesday for the media and opens to the public Friday at the downtown convention center. It will feature two dozen world debuts, including Porsche's redesigned 2014 Cayman sports car, a hardtop counterpart to the Boxster convertible; and Toyota Motor Corp.'s latest RAV-4, a leading small sport utility vehicle.

Video chat: What's new at the Los Angeles Auto Show

Acura will unveil an all-new flagship sedan, powered by a 3.5-liter V-6 engine making 310 horsepower. Hyundai Motor Co. will show off a special concept car it says was designed with California car culture front of mind.

On the electric front, Chevrolet will reveal its Spark EV, which will have more power, torque and speed than the gas-powered version of the same car. General Motors Co. says the car will jump from a start to 60 mph in less than 8 seconds, which will make it one of the fastest EVs on the market (though still slow compared with the pricier, made-in-California Tesla Model S). Likewise, Fiat will show off an electric version of its 500 mini-car.

If you go to the show, or just want to track the latest in the auto industry, here are five new technologies to watch.

Three-cylinder engines

They have been tried before in America with little success. But a new generation of small, powerful engines will soon make inroads in cars that have traditionally needed at least a four-banger.

Ford Motor Co. will show off its small Fiesta with a new turbocharged three-cylinder engine that produces 123 horsepower and 148 pound-feet of torque — more powerful than the car's current base four-cylinder. The car may also achieve fuel economy north of 40 mpg.

Shrinking the engine size and weight without losing power is a key goal of automotive engineering, said Andrew Fraser, one of the Ford engineers who developed the power plant.

"It's a virtuous circle," Fraser said. "As you reduce the weight of the engine, everything else on the vehicle can be lighter, and you get better weight distribution and it drives better. Resistance to turning the car is largely determined by the weight in the front of it."

That's why many high-end sports cars have a mid-engine, he said, and why 50-50 weight distribution is seen as the holy grail of car design, creating nimble handling.

Other manufacturers — including BMW and Volkswagen — are working with three-cylinder engines that they may introduce in the U.S. market in coming years. The three-cylinder Ford Fiesta goes on sale in the U.S. in the second half of next year.

Phone navigation

Automakers typically embed features such as navigation and voice recognition in dashboards so they can charge as much as $2,000 for the options. Chevrolet is taking a different approach with its smallest and least expensive cars, the Spark and the Sonic.

These vehicles come with a 7-inch color touch screen and GM's MyLink, which allows drivers to purchase a $50 BringGo smartphone app to display a navigation program and traffic updates. This has virtually all of the information drivers would find in an embedded navigation system, including emergency information for police and the nearest hospital, points of interest, maps and turn-by-turn directions.

The MyLink system enables car owners to bring other apps to the vehicle such as Pandora and Stitcher radio services.

"This makes the car an extension of your smartphone," said Sara LeBlanc, global program manager for Chevrolet and General Motors infotainment. "It is an incredible deal when compared to the cost of an aftermarket Garmin or embedded navigation system."

So why don't automakers do this with all of their cars?

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