Business

Legion M is taking crowdfunding to the next level — giving ordinary moviegoers a seat at Hollywood’s table.
In less than a decade, the studio has worked with a number of Hollywood stars and funded the recently released cryptocurrency documentary “This is Not Financial Advice,” as well as the upcoming William Shatner documentary “You Can Call Me Bill.”
If a film or television project performs well at the box office or is bought by a distributor, those who invested get a cut.

William Shatner attends the William Shatner handprint ceremony hosted by Legion M during 2022 Comic-Con International: San Diego at Theatre Box on July 21, 2022 in San Diego, California.
Emma Mcintyre | Getty Images

When Paul Scanlan and Jeff Annison first dreamed up their production studio, Legion M, they set out to build not just a company, but a community.
The movie studio behind buzzy names like “Jay and Silent Bob Reboot,” “Colossal” and the upcoming William Shatner documentary “You Can Call Me Bill” is part of a shift in Hollywood over the last decade to a new crowdfunding model, allowing producers to solicit donations for film and television projects and reward investors with more than just a limited edition piece of merchandise.

Now, fans can get an actual return on their investment.
“I think a lot of people look at equity crowdfunding as a different way to raise money,” said Annison, cofounder and president of Legion M. “It’s a different way to fund your company, or a different way to fund your film. And we look at it as a fundamentally different way to build a fundamentally different type of business.”
Legion M launched in 2016 in the wake of the Jumpstart Our Business Startups, or JOBS, Act, which lowered barriers to entry for raising capital and allowed companies to access funding in ways that were previously barred due to securities regulations.
While crowdfunding is not a new concept, Legion M is taking it to the next level — giving ordinary moviegoers a seat at Hollywood’s table.
In less than a decade, the studio has worked with a number of Hollywood stars, including Anne Hathaway, Jason Sudeikis on 2016’s “Colossal” and Simon Pegg and Minnie Driver in 2023’s “Nandor Fodor and the Talking Mongoose.”

The company has also funded the recently released cryptocurrency documentary “This is Not Financial Advice.”

Risks and rewards

Crowdfunding sites like Kickstarter, GoFundMe and Indiegogo have long allowed creators to tap into their most ardent fan bases to create content.
In the past, Kickstarter backers generated $3.1 million for Zach Braff’s 2014 film “Wish I Was Here,” $5.7 million for Rob Thomas’ 2014 “Veronica Mars” movie and a record-breaking $11.3 million for Critical Role’s “Legend of Vox Machina” animated series, which was later picked up by Amazon Prime Video.
However, Kickstarter does not allow campaign creators to offer those who donate any financial returns.
That’s what sets Legion M apart. If a film or television project performs well at the box office or is bought by a distributor, those who invested get a cut.
“For the William Shatner documentary, we basically replaced the role of a single financier writing that check with 1,200 small financiers that wrote smaller checks,” Annison said.
The minimum investment for the documentary was $100.
Investors can also buy a stake in Legion M itself for as little as $40. The company says it has more than 45,000 investors.
For Legion M’s “My Dead Friend Zoe,” the company collected funds from Legion M investors and from larger, more traditional Hollywood financiers, including Kansas City Chiefs star tight end Travis Kelce.

Left to right, Chris Temple, Glauber Contessoto, Zach Ingrasci and Rayz Rayl of “This Is Not Financial Advice” pose for a portrait during the 2023 Tribeca Festival at Spring Studio on June 10, 2023 in New York City.
Erik Tanner | Getty Images

Legion M offers creators access to its fanbase, something that independent filmmaker Chris Temple, co-director of “This is Not Financial Advice” found complimented his documentary. His film centers on several retail investors navigating the peaks and valleys of the crypto world.
He said working with Legion M “felt very natural from the first call.”
“This is a grassroots film about investors who have finally gotten access into markets that they don’t have access into and people taking control of their own finances,” he said, noting the parallels with Legion M’s work.

Fans know best

Legion M is not alone in this space. Angel Studios made headlines after its crowdfunded “Sound of Freedom” secured around $250 million at the global box office on a budget of just $14.5 million.
While Angel Studios markets itself as a production studio that brings “light” to entertainment, much of its focus is on elevating religious titles to the mainstream. Legion M’s focus is the Comic Con crowd, though it’s diversifying its portfolio to include comedies, thrillers, murder mysteries, dramas, sci-fi action flicks and documentaries.

Jeff Annison and Paul Scanlan attend the world premiere of “You Can Call Me Bill” at the 2023 SXSW Conference and Festivals at The Paramount Theater on March 16, 2023 in Austin, Texas.
Frazer Harrison | Getty Images

“What’s nice about what Legion M is doing is we’re creating a built-in audience,” said Scanlan, the company’s cofounder and CEO.
The company’s logo, an “M” with a bar over top representing the roman numeral for one million, is a nod to Legion M’s goal of drawing in one million fans as shareholders.
“Imagine an entertainment company or a studio that has a million fans that are literally financially invested in the films that they have coming out, but they’re also emotionally invested in the films,” Annison said. “Because they’ve been following around since day one and they got a chance to go behind the scenes and they’ve heard the director articulate his story and their vision for what the movie will be.”
One of those fans is Matt Conkling, who made his first investment in the company in 2019, drawn to how Legion M offered investors a chance not just to give money, but to be involved in productions, too.
Soon after his first investment, Conkling saw a post from the company requesting a number of props including neon signs and automobiles for its mystery-thriller film “Archenemy,” which starred Joe Manganiello of “True Blood.”
“I raised my hand,” Conkling said, who volunteered his 1975 Chevy El Camino. Two days later, Conkling got a call to help handle the car around set.
“So it went from, ‘Here’s my keys,’ to a huge crash course on the film industry,” he said. “After that, I got hooked.”
Conkling had previously tried to get in on the ground floor of a film project from a different production company he preferred not to name, but he wasn’t able to meet the minimum investment amount of $25,000.
“How often do regular everyday people get the chance to potentially invest in something at a low dollar amount?” he said.
For Conkling, Legion M has become more than a casual investment, it’s become a career, of sorts. While he continues to finance individual film projects the company is promoting — and said he ultimately wants to invest enough to own 1% of the company — by volunteering his car to one production, he’s managed to find his niche in Hollywood.
After “Archenemy,” Conkling was tapped to source the titular white van for Legion M’s “The Man in the White Van,” a crime thriller based on actual events that occurred the 1970s. That gig fostered another on Dennis Quaid’s “The Long Game,” which filmed in Texas. And it hasn’t stopped there: Conkling can even be spotted playing dead in the background of the Netflix film “The Grey Man.”
“Legion M is the gift that keeps giving,” Conkling said. More

Biotech company Viking Therapeutics has emerged as a strong potential player — and deal target — in the budding weight loss drug market. 
Viking is just one of several companies racing to join the space, which is currently dominated by Eli Lilly and Novo Nordisk.
Some Wall Street analysts said Viking’s experimental obesity treatment may be “best-in-class” following the release of midstage trial data.

Cr | Istock | Getty Images

Biotech company Viking Therapeutics has emerged as a strong potential entrant — or takeover target — in the budding weight loss drug market. 
Viking is just one of several companies racing to join the growing space. Some analysts say the market could be worth $100 billion by the end of the decade. Viking aims to compete with injectable drugs from Eli Lilly and Novo Nordisk, which sparked the weight loss drug industry gold rush over the past year despite their hefty price tags and barriers to insurance coverage. 

Viking’s drug could become a strong rival. Some Wall Street analysts said its experimental obesity treatment may be “best-in-class.” In a midstage trial, an injectable version of Viking’s drug appeared to promote even greater weight loss than Eli Lilly’s Zepbound.
Viking gave a first glimpse at data from that study on Tuesday, and its shares soared 120%. The promising results make the company an impressive potential player in a market that will likely have room for more entrants in the coming years. 
Goldman Sachs projects that between 10 million and 70 million Americans will be taking weight loss drugs by 2028. Eli Lilly and Novo Nordisk have also struggled to offer enough supply of their treatments, giving other companies a chance to win market share.  
The new data also makes Viking a more attractive deal target for larger companies trying to break into the space or expand their obesity treatment offerings.
It’s too early to say whether Viking’s drug could have an edge over existing or developing weight loss treatments. It’s difficult to compare therapies without pitting them head to head in the same clinical trial. 

Viking also needs to conduct a late-stage study on its drug, and likely won’t launch the injection until the later part of the decade. The small company faces hurdles to entering the market, such as manufacturing enough of the drug to meet booming demand. But an acquisition by a larger company could help solve some of those issues.

Data suggests Viking’s drug may have an edge

Viking’s phase two trial followed more than 170 patients who are overweight or obese. They received different dose sizes of the injectable drug or a placebo.
The trial did not directly compare Viking’s treatment to other drugs. Still, many analysts compared Viking’s injection to Eli Lilly’s Zepbound, largely because they work the same way. 

An injection pen of Zepbound, Eli Lilly’s weight loss drug, is displayed in New York City on Dec. 11, 2023.
Brendan Mcdermid | Reuters

Both drugs target two naturally produced gut hormones called GLP-1 and GIP. The combination is said to slow the emptying of the stomach, make people feel full for longer and suppress appetite by slowing hunger signals in the brain. Meanwhile, Novo Nordisk’s weight loss injection Wegovy only targets GLP-1. 
Analysts were particularly impressed by the weight patients lost after they took the highest dose of Viking’s drug. Those who received a weekly 15 milligram dose of the treatment lost 13.1% of their body weight on average after 13 weeks compared to those who took the placebo. 
Viking’s drug data shows a “best-in-class profile” among both approved and experimental weight loss drugs with phase two trials, William Blair analyst Andy Hsieh wrote in a note Tuesday. Eli Lilly’s Zepbound generated roughly 7% weight loss relative to a placebo after 12 weeks in a phase three clinical trial, Hsieh noted.
Viking’s drug also appears to top Novo Nordisk’s weight loss injection Wegovy, according to a separate Tuesday note from BTIG analysts.
Based on chart data from a phase three trial, the analysts estimated that Wegovy caused around 5% weight loss at 13 weeks compared to a placebo.
Meanwhile, several analysts estimated that some doses of Eli Lilly’s experimental injection, retatrutide, caused between 9% and 13% weight loss relative to a placebo at 13 weeks based on chart data from a midstage trial.
The majority of adverse side effects that patients experienced after starting Viking’s drug were mild or moderate. Many of those instances were gastrointestinal, which is common across all weight loss and diabetes treatments.
Around 20% of patients who took the 15 milligram version of Viking’s drug discontinued treatment early in the study. That compares with around 14% of those taking the placebo who stopped early in the trial. 
But Jefferies analyst Akash Tewari wrote in a note Tuesday that Viking’s trial used faster “titration” in patients, which refers to increasing the dose size a patient takes over time until they reach a target dosage level. 
He said Viking may be able to make its drug easier for patients to tolerate in a future trial with slower titration, which could potentially lower the treatment’s efficacy. 

Viking still has a long way to go

Despite the compelling data, Viking has far more work to do before it can compete in the weight loss drug market. 
The company plans to meet with the U.S. Food and Drug Administration later this year to discuss a clinical development plan for the treatment. 
Viking CEO Brian Lian told investors on a call Tuesday that the company will likely conduct another phase two trial that could last six to nine months.
Jefferies’ Tewari estimates that Viking’s treatment won’t reach the market until 2029 or later. A late-stage trial on the drug could be lengthy. Eli Lilly’s phase three study on Zepbound lasted two and a half to three years.
The late entrance of Viking’s drug is one reason why Tewari doesn’t believe the company will meaningfully cut into Eli Lilly’s market.
The pharmaceutical giant could also launch a slate of other weight loss treatments over the next few years that may have advantages over Zepbound, whether they offer more weight loss or convenience. They include Eli Lilly’s experimental pill orforglipron and the widely watched retatrutide, which mimics three gut hormones instead of two. 

An Eli Lilly and Company pharmaceutical manufacturing plant is pictured in Branchburg, New Jersey, on March 5, 2021.
Mike Segar | Reuters

Analysts from Deutsche Bank added in a note Tuesday that manufacturing the treatments “at scale to meet outsized demand has proven to be no easy feat,” which gives Eli Lilly and Novo Nordisk a “defensive moat” against rivals.
Viking acknowledged this hurdle on the call Tuesday. Lian said the company has enough supply of the drug to support its clinical trials, but its manufacturing capacity is insufficient for a commercial rollout. 
But Lian noted that the company is “spending a lot of time” evaluating multiple manufacturing processes to understand “what’s fastest, what’s highest yielding, what’s cheapest and what’s most scalable.” 

Partnerships, buyouts are on the table 

Viking’s impressive data could make it an attractive target for a takeover or partnership with a large pharmaceutical company. That could give Viking the commercial and manufacturing capabilities needed to compete in the weight loss drug market. 
William Blair’s Hsieh added that large pharmaceutical companies could maximize the value of Viking’s treatment because they could better navigate the rebate and reimbursement landscape for weight loss drugs.
Some analysts expect other companies to have high interest in Viking.
“This very well could be on the shopping list for any large-cap pharma or biotech company that wants to be in the obesity market but currently doesn’t have a drug. There are plenty of them out there,” Oppenheimer analyst Jay Olson told CNBC. 
He added that a company could “pay a pretty significant premium for Viking and pick this up … for a relatively low price compared to the potential that exists for a drug like this.” As of Friday, Viking had a market cap of more than $8.5 billion.

Injection pens of Novo Nordisk’s weight loss drug Wegovy are shown in this photo in Oslo, Norway, on Nov. 21, 2023.
Victoria Klesty | Reuters

Viking is an appealing deal target because of more than just the new data. Wall Street is eager for the company to release early-stage trial results on an oral version of its weight loss treatment this quarter. 
The BTIG analysts noted that the intellectual property coverage for both versions of the drug extends beyond 2040, “boding well” for potential partnership discussions. 
Viking also has other drugs in development, including an oral treatment for a certain form of liver disease. Eli Lilly, Novo Nordisk and other drugmakers are also racing to see whether their drugs can treat that same condition. 
Viking hasn’t disclosed any details about its discussions with potential partners. But the company has “always been open to partner discussions since day one, so we’re always opportunistically evaluating whatever is presented to us,” Lian said during Viking’s fourth-quarter earnings call last month. 
Other drugmakers have pursued deals over the past year to carve out a space in the weight loss drug market. 
Swiss company Roche said it would buy the privately held U.S. obesity drugmaker Carmot Therapeutics for $2.7 billion. AstraZeneca signed a licensing agreement with Chinese biotech company Eccogene to develop an obesity pill. 
Even Novo Nordisk and Eli Lilly have snapped up smaller obesity drug companies this year to maintain their dominance in the market.Don’t miss these stories from CNBC PRO: More

Avelo and Breeze Airways debuted in 2021.
Avelo and Breeze Airways’ CEOs each said they expect their airlines to turn a profit this year.
The airline industry has recently faced a rise in oil prices, supply chain snarls and shortages of pilots and air traffic controllers.

The inaugural flight of an Avelo Airlines Boeing 737-800 takes off from Hollywood Burbank Airport to Charles M. Schulz-Sonoma County Airport in Santa Rosa on April 28, 2021.
Patrick T. Fallon | AFP | Getty Images

In the nearly four years since the Covid-19 pandemic upended air travel, the largest U.S. airlines have returned to profitability. The CEOs of two upstart airlines that launched in the middle of the pandemic say they’re about to join them.
Avelo and Breeze Airways, two low-cost carriers that debuted in 2021 when U.S. air travel demand was more than 30% below pre-pandemic levels, have both grown their operations rapidly.

They’ve launched dozens of new routes across the country, and their founders say their strategy of linking cities where there’s less competition from large carriers is paying off. Think Los Angeles’ Hollywood Burbank Airport, rather than Los Angeles International, or Islip, Long Island, over New York City.
“When you have Goliaths, and you’re just David, it’s really hard,” said Avelo Airlines CEO Andrew Levy.
Delta, American, United and Southwest together control about three-quarters of the U.S. market, according to Cirium data.
Avelo says it flew 2.3 million customers in 2023, and that its planes were more than 80% full on average. Breeze flew more than 2.8 million travelers last year, and its flights were 77% full, according to the company. The carriers are still tiny. For comparison, Southwest Airlines, the largest domestic carrier, flew more than 137 million passengers last year.
Yet, Avelo reported its first profitable quarter in the last three months of 2023, and a company spokesperson said the airline will likely turn an annual profit in 2024. It brought in revenue of $265 million for the full year 2023, up 74% from the prior year.

Levy said he had expected the airline to turn a profit sooner, but high fuel costs during a period of broad inflation and Russia’s invasion of Ukraine two years ago pushed back the timeline.
Breeze is also on track for its first profitable year in 2024, said CEO David Neeleman.

David Neeleman, founder and CEO of Breeze Airways, before boarding the airline’s inaugural flight at Tampa International Airport in Tampa, Florida, on May 27, 2021.
Matt May | Bloomberg | Getty Images

It typically takes two to four years from launch for airlines to turn a profit, said Henry Harteveldt, president of Atmosphere Research Group, a travel industry consulting firm. Avelo and Breeze each faced additional challenges that have weighed on the entire industry, including a jump in oil prices, supply chain snarls and shortages of pilots and air traffic controllers.
“The fact that the airlines are both still operating is a credit to [Levy’s and Neeleman’s] visions, their leadership, but also the dedication of their employees,” Harteveldt said.

Skipping hubs

Both airlines have staked a claim in the low-cost carrier segment, which also includes Frontier and Allegiant, which offer base fares, add-ons and secondary airport flights.
Avelo flies to about 50 destinations and operates out of six bases including Connecticut’s Tweed-New Haven Airport and Delaware’s Wilmington Airport. Many of its destinations are from the Northeast to popular vacation destinations in Florida and South Carolina, but it also serves destinations in California and other western states in the U.S.
The carrier moved beyond the continental U.S. in 2023 when it launched service to Puerto Rico and will likely expand to international destinations this year, Levy said.
Breeze, which Neeleman founded after also starting JetBlue Airways and Brazilian carrier Azul, mostly eschews major hubs and flies out of about 50 airports such as New York’s Westchester County Airport and Akron-Canton Airport in Ohio.
It flies to standard vacation destinations, but also offers cross-country flights from cities such as Hartford, Connecticut or Charleston, South Carolina, to destinations including Las Vegas and Los Angeles. It hopes to launch international service by 2025.
Avelo and Breeze have both continued to announce new routes and destinations this year. Avelo had 11 routes shortly after launching in the summer of 2021 and now has about 75, while Breeze flew about 16 routes that summer and is currently selling roughly 180.

A Breeze Airways airplane on the tarmac at Tampa International Airport in Tampa, Florida, on May 27, 2021.
Matt May | Bloomberg | Getty Images

Breeze and Avelo sell base fares — some as low as double digits — and charge fees for checked luggage and advanced seat assignments, upcharges that have become common not just among budget airlines, but most large carriers, too.
Breeze’s lowest-fare option allows travelers to bring on only a personal item, but the airline also sells first class seats and extra legroom options with more amenities. Neither airline’s base fare includes a carry-on bag.

Operational costs

Offering low airfares has made industry-wide cost increases all the more daunting for Avelo and Breeze. The nationwide shortage of pilots following the pandemic and rising labor costs, for example, have posed a challenge.
Large airlines, which can offer pilots big salaries, have hired away pilots from smaller carriers in recent years to staff up after the pandemic.
“What you really want to watch with pilots is attrition. … We had an attrition rate that was higher than we liked, and now it’s where we want it,” said Neeleman.
The carrier has many first officers who are poised to be upgraded to captain, helping alleviate the shortage, he added.
Airlines have also struggled with late deliveries of aircraft and difficulties getting thousands of replacement parts.

Founder, Chairman and CEO of Avelo Airlines Andrew Levy speaks at Hollywood Burbank Airport in Burbank, California, on April 7, 2021.
Joe Scarnici | Getty Images

Avelo has faced delays in delivery of its used Boeing 737 aircraft that it leases, CEO Levy said. The company currently has 16 planes in its fleet and has five on order.
“The whole aviation supply chain system has been mucked up since Covid. And it still is not quite back to what it was,” Levy said.
Breeze said last month that it will exercise options on 10 more Airbus A220 aircraft. The company will exclusively fly the A220 for its commercial service by the end of 2024. It currently flies 22 A220s and will have 32 in operation by the end of 2024, according to Neeleman.
Neeleman said Breeze is aiming to be profitable before it decides whether to file for an initial public offering or another option. Avelo also hopes to achieve sustained levels of profitability before an IPO.
Levy said Avelo’s focus is “on getting to a point where the company is IPO ready,” and that he has no interest in selling the company.
Some airlines, particularly low-cost carriers, have in recent years looked to merges to chip away at the dominance of the big four carriers. JetBlue and Spirit announced plans to combine in July 2022 in a deal that would have created the fifth-largest airline in the U.S., though a federal judge blocked that merger in January. Those airlines have appealed that ruling.
Hawaiian Airlines and Alaska Airlines plan to combine, though they’ll continue to operate the brands as distinct carriers.
Both Levy and Neeleman said there is room for multiple players in the low-cost carrier space.
“The more competition we have in the U.S. airline industry, the better it is for the traveling public,” Atmosphere Research Group’s Harteveldt said.
— CNBC’s Leslie Josephs contributed to this report.Don’t miss these stories from CNBC PRO: More

Lockheed Martin submitted a bid to acquire spacecraft manufacturer Terran Orbital, the defense giant revealed in a securities filing.
The cash offer values Terran at just below $600 million.
Terran went public via a SPAC in early 2022 at a $1.8 billion valuation.

Terran Orbital’s banner above the New York Stock Exchange on March 28, 2022.
Terran Orbital

Lockheed Martin submitted a bid to acquire spacecraft manufacturer Terran Orbital, the defense giant revealed in a securities filing on Friday.
The nonbinding proposal would see Lockheed acquire Terran Orbital’s outstanding common stock at $1 a share in cash, as well as pay $70 million for Terran’s outstanding warrants and assume the company’s $313 million in outstanding debt.

Together, the offer values Terran Orbital at just below $600 million. Terran Orbital stock closed at $1.07 a share on Friday.
Terran Orbital did not immediately respond to CNBC’s request for comment.

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

The small spacecraft maker went public via a SPAC in early 2022 at a $1.8 billion valuation. Like many space stocks, the yet-unprofitable company has been hit hard by the shifting risk environment in the market.
Lockheed Martin is already a significant stakeholder in Terran Orbital, with a 28.3% stake as of Friday, having bought in during the company’s SPAC process and again in late 2022.
Additionally, Lockheed noted in its letter to Terran Orbital management that the defense giant “continues to be Terran’s largest revenue generating customer accounting.”

Terran Orbital

Don’t miss these stories from CNBC PRO: More

NASA said it is shutting down a $2 billion project to test satellite refueling in space.
The agency’s auditor recently criticized the OSAM-1 program’s lead contractor, Maxar, for “poor performance.”
OSAM-1 has been in development since 2015, with the goal of docking with Landsat 7 imagery satellite in orbit, to repair, refuel and extend the life of the aging spacecraft.

A “grapple test” of the OSAM-1 spacecraft’s robotic servicing arm.

NASA is shutting down a $2 billion project to test satellite refueling in space, it announced Friday, after the agency’s auditor criticized the program’s lead contractor, Maxar, citing “poor performance.”
The space agency said in a statement that the OSAM-1 — On-orbit Servicing, Assembly, and Manufacturing 1 — project was being discontinued after nearly a decade of work.

NASA cited in its announcement “continued technical, cost, and schedule challenges, and a broader community evolution away from refueling unprepared spacecraft, which has led to a lack of a committed partner.”
The agency said in a statement to CNBC that about 450 personnel are supporting OSAM-1, but that NASA “is committed to supporting project workforce per plan through fiscal year 2024.”
“While we are disappointed by the decision to discontinue the program, we are committed to supporting NASA in pursuing potential new partnerships or alternative hardware uses as they complete the shutdown,” Maxar Space Systems spokesperson Eric Glass said in a statement to CNBC.
Maxar was taken private by private equity firm Advent International in May 2023 before being split into two businesses: Maxar Intelligence, focused on satellite imagery and analytics, and Maxar Space Systems, focused on spacecraft manufacturing.

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

NASA’s Goddard Space Flight Center in Maryland was leading the work on OSAM-1, with Maxar Space Systems as the project’s prime contractor under multiple deals. OSAM-1 has been in development since 2015, with the goal of docking with the U.S.-owned Landsat 7 imagery satellite in orbit, to repair and refuel the aging spacecraft to extend its life.

But OSAM-1 has fallen years behind schedule, while the program’s cost to NASA soared. In a scathing October report, NASA’s Inspector General “found that project cost increases and schedule delays were primarily due to the poor performance of Maxar,” while noting that the agency’s Goddard center has also struggled with key parts of development.
“NASA and Maxar officials acknowledged that Maxar underestimated the scope and complexity of the work, lacked full understanding of NASA technical requirements, and were deficient in necessary expertise,” NASA’s Inspector General said in its report, following a yearlong audit.
The agency’s auditor noted that OSAM-1 was likely to both “exceed its current $2.05 billion price tag and the December 2026 launch date,” which was already six years behind schedule. The report, citing Maxar representatives, noted the company was “no longer profiting from their work on OSAM-1” and, in NASA’s view, it no longer appeared “to be a high priority for Maxar in terms of the quality of its staffing.”
NASA’s cancellation of OSAM-1 comes months after Maxar delivered major segments of the spacecraft to Goddard in Maryland — but other key parts were yet to be finished.
Satellite servicing is a nascent sub-sector of the space industry that’s only recently begun to be proven out, with Northrop Grumman’s extension missions representing an early effort. More

Boeing is in talks to acquire fuselage maker Spirit AeroSystems.
It comes less than two months after a section of a Boeing 737 Max 9 jet blew out during an Alaska Airlines flight.
Both companies have been scrambling to stamp out manufacturing flaws on Boeing’s top-selling plane.

Airplane fuselages bound for Boeing’s 737 Max production facility sit in storage at their top supplier, Spirit AeroSystems Holdings Inc, in Wichita, Kansas, U.S. December 17, 2019. 
Nick Oxford | Reuters

Boeing is in talks to buy back Spirit AeroSystems, which makes fuselages for Boeing’s 737 Max jets, the companies said Friday, as the manufacturers scramble to stamp out production flaws on the top-selling plane.
Shares of Spirit rose 15% on Friday, while Boeing’s stock fell close to 2%. Spirit AeroSystems had a market capitalization of $3.8 billion as of Friday’s close.

Boeing in 2005 spun off operations in Kansas and Oklahoma that became the present-day Spirit AeroSystems. About 70% of Spirit’s revenue last year came from Boeing, and roughly a quarter came from making parts for Boeing’s main rival, Airbus, according to a securities filing. Airbus declined to comment on the deal talks.
“We believe that the reintegration of Boeing and Spirit AeroSystems’ manufacturing operations would further strengthen aviation safety, improve quality and serve the interests of our customers, employees, and shareholders,” Boeing said in a statement on Friday. “Although there can be no assurance that we will be able to reach an agreement, we are committed to finding ways to continue to improve the safety and quality of the airplanes on which millions of people depend each and every day.”
Spirit also confirmed the talks.
Boeing CEO Dave Calhoun, when asked about outsourcing production of parts of its airplanes, told CNBC in January: “Did it go too far? Yeah … probably did, but now it’s here and now I gotta deal with it.”
Spirit has struggled financially, and was last profitable in 2019, before the pandemic. In October, Spirit appointed Pat Shanahan, who spent about three decades at Boeing, as its new, interim CEO.

The deal talks come less than two months after a section of a Boeing 737 Max 9 plane blew out during an Alaska Airlines flight. The Federal Aviation Administration temporarily grounded all of the planes in January, leading to investigations into the accident and Boeing’s production lines.
It was the latest and most serious in a host of flaws on the Boeing 737 Max, the company’s bestselling jet.
The bolts on the door plug of the Max involved in the January accident appeared not to have been attached when it left Boeing’s Renton, Washington, factory, according to a preliminary report from the National Transportation Safety Board.
Boeing has disclosed several production problems and quality flaws on the fuselages that Spirit makes, including incorrectly drilled holes and wrong spacing on some fuselage components, problems that have slowed deliveries of new jets to airlines.
The FAA, which oversees Boeing and certifies its planes, has vowed deeper scrutiny of the company’s production lines since the Jan. 5 accident. Earlier this week, after a meeting with Calhoun, the FAA’s administrator, Mike Whitaker, said the agency was giving the company 90 days to come up with a plan to improve its quality control and safety systems.
Boeing and Spirit’s deal talks were reported earlier by The Wall Street Journal.
Don’t miss these stories from CNBC PRO: More

A federal judge rejected AstraZeneca’s legal challenge to Medicare’s new power to negotiate the prices of certain costly prescription drugs with manufacturers.
The decision is another win for the Biden administration in a bitter legal fight with the pharmaceutical industry over the constitutionality of those price talks.
U.S. District Judge Colm Connolly’s decision also comes one day before manufacturers have to respond to Medicare’s initial price offers.

Activists protest the price of prescription drug costs in front of the U.S. Department of Health and Human Services building in Washington, D.C., on Oct. 6, 2022.
Anna Moneymaker | Getty Images

A federal judge on Friday rejected AstraZeneca’s legal challenge to Medicare’s new power to negotiate the prices of certain costly prescription drugs with manufacturers.
The decision is another win for the Biden administration in a bitter legal fight with the pharmaceutical industry over the constitutionality of those price talks. The negotiations are a key policy under the Inflation Reduction Act that aims to make medicines more affordable for seniors and could take a bite out of the pharmaceutical industry’s profits.

The legal wrangling over the policy is far from over. Manufacturers have said they intend to escalate the issue to the Supreme Court. 
The judge’s decision came one day before a crucial deadline in the process. 
Manufacturers of the first 10 drugs selected for negotiations have until Saturday to respond to Medicare’s initial price offer for their treatments. Those drugs include AstraZeneca’s Farxiga, which is used to treat Type 2 diabetes, chronic kidney disease and heart failure. 
Final negotiated prices for the first round of drugs will go into effect in 2026. 
In a 47-page opinion, U.S. District Judge Colm Connolly of the District of Delaware said AstraZeneca has not identified a property protected by the constitution that will be jeopardized by the price talks. 

He wrote that AstraZeneca’s participation in the Medicare market is voluntary, so the company’s “desire” or even “expectation” to sell its drugs to the government “at the higher prices it once enjoyed does not create a protected property interest.” 
The opportunity to sell drugs to more than 49 million Medicare and Medicaid beneficiaries is a “powerful incentive” for manufacturers to participate in the price talks with the government, Connolly wrote. But he said that incentive is not “a gun to the head” like AstraZeneca contends in its suit.”It is a potential economic opportunity that AstraZeneca is free to accept or reject,” Connolly wrote.
In a statement, AstraZeneca said it is “disappointed with the court’s decision and the potential negative impact it will have on patients’ access to future life-saving medicines.” The company said it is evaluating its path forward.
AstraZeneca’s lawsuit claimed that the talks would force it to sell medicines at huge discounts, below market rates. The company asserted that this violates due process under the Fifth Amendment, which requires the government to pay reasonable compensation for private property taken for public use. 
The judge’s decision is another blow to the pharmaceutical industry, which has filed a flurry of lawsuits claiming that the negotiations are unconstitutional. 
The ruling comes a month after a federal judge in Texas tossed a separate lawsuit challenging the price talks. 
A federal judge in Ohio also issued a ruling in September denying a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the price talks before Oct. 1.
But many of the other cases are still pending. On March 7, Bristol Myers Squibb, Novo Nordisk, Novartis and Johnson & Johnson will present their oral arguments to a federal judge in New Jersey in the same hearing.Don’t miss these stories from CNBC PRO: More

CVS and Walgreens will start selling the abortion pill mifepristone this month at certain pharmacy locations in states where it is legal to do so, spokespeople for the companies told CNBC.
CVS and Walgreens have received certification from the FDA to dispense the commonly used mifepristone at their retail pharmacies, spokespeople for each company said in separate statements.
The pharmacy chains will not provide the medication by mail.

A container holding boxes of mifepristone, the first medication in a medical abortion, are prepared for patients at Alamo Women’s Clinic in Carbondale, Illinois, on April 20, 2023.
Evelyn Hockstein | Reuters

CVS and Walgreens will start selling the abortion pill mifepristone this month at certain pharmacy locations in states where it is legal to do so, spokespeople for the companies told CNBC on Friday. 
CVS and Walgreens received certification from the U.S. Food and Drug Administration to dispense the commonly used pill at their retail pharmacies, spokespeople for each company said in separate statements.

CVS will begin filling prescriptions for the medication in Massachusetts and Rhode Island in the coming weeks, a spokesperson for the company said. They added that CVS will expand to additional states, “where allowed by law, on a rolling basis.” 
Walgreens expects to start dispensing prescriptions for the pill within a week at select pharmacy locations in New York, Pennsylvania, Massachusetts, California and Illinois, a company spokesperson said.
Notably, the chains will not provide the medication by mail. The New York Times reported the news earlier Friday.
Mifepristone is the first pill used in the two-drug medication abortion regimen.
The FDA is squaring off with anti-abortion physicians in an unprecedented legal challenge to its more than two-decade-old approval of mifepristone. An anti-abortion rights group sued the agency in 2022 in a bid to declare that approval unlawful and completely remove the pill from the U.S. market

On March 26, the Supreme Court will hear oral arguments in that closely watched case.
The FDA in January said it will allow retail pharmacies to offer mifepristone in the U.S. for the first time. 
Under a regulatory change at the agency, pharmacies can apply for certification to distribute the pill with one of the two companies that make it. That certification would allow pharmacies to dispense the medication directly to patients upon receiving a prescription from a certified prescriber.
Before the FDA’s regulatory change, only a few mail-order pharmacies or specially certified doctors or clinics could distribute mifepristone.
The regulatory change will potentially expand abortion access as the Biden administration wrestles with how best to protect abortion rights. The right to abortion in the U.S. was sharply curtailed by the Supreme Court’s 2022 decision to overturn the landmark Roe v. Wade ruling.
The Biden administration has sought to make abortion and contraception access a main platform of the president’s 2024 campaign.
Medication abortion is the most common method of terminating a pregnancy in the U.S., according to data from the Centers for Disease Control and Prevention. That method is approved by the FDA for use up to 10 weeks into pregnancy.Don’t miss these stories from CNBC PRO: More