Good Morning. This is the Investor Lookout with the daily digest.

Here’s what we got today:

• 🤖 Redmond’s $14B AI Rebalance

• 💉 BioNTech Settles $1.26B in Royalty Disputes

• 🤝 UnitedHealth-Amedisys Merger Deadline Extended to 2025

Redmond’s $14B AI Rebalance

When $14B feels like loose change: Microsoft’s ($MSFT) AI pivot in action. After nearly $14B in OpenAI, the software giant is trimming reliance on the ChatGPT-maker by exploring internal and external AI models for its 365 Copilot. This move aims to manage costs and address speed concerns for enterprise users. Microsoft still calls OpenAI a “frontier partner,” but GitHub, a Microsoft subsidiary, is already adopting alternatives like Anthropic. No specific data on Copilot’s sales yet, leaving the product’s ROI uncertain.

• Microsoft and OpenAI are negotiating how the $14B investment converts into equity.

• The ChatGPT-maker will reportedly remove a clause restricting Microsoft’s access to advanced AI models after achieving AGI.

BioNTech Settles $1.26B in Royalty Disputes

Some vaccines come with a hefty tab—BioNTech ($22UA) is shelling out up to $1.26B in royalty settlements with the NIH and Penn. The NIH deal includes $750M for claimed royalties from 2020 to 2023, plus $41.5M for a new license. Penn’s portion could reach $467M, mainly tied to mRNA research royalties. Pfizer ($PFE) will reimburse a slice of these outlays. That sum includes $364.5M for NIH costs and $170M for Penn. Both settlements address previous claims that BioNTech underpaid royalties for its Covid-19 vaccine patents.

• BioNTech is headquartered in Mainz, Germany.

• Penn researchers are recognized as early innovators of mRNA technology.

UnitedHealth-Amedisys Merger Deadline Extended to 2025

That $3.3B deal’s getting more extensions than a college student with final papers. The companies have extended their merger deadline to 10 days after a final court decision or Dec. 31, 2025, whichever comes first. This move follows the DOJ and three states’ lawsuit to block the deal, citing concerns about reduced competition in home health services. Officials say the extension was granted more than a month after the DOJ’s legal challenge, placing both sides on standby for a final verdict. A prior suit involving UnitedHealth’s ($UNH) acquisition of Change Healthcare was eventually resolved, but that doesn’t guarantee a similar outcome this time.

• Amedisys ($AMED) shares jumped 3.5% in premarket trading.

• The original deadline was set for Dec. 27, 2024.

#1

While Microsoft hasn’t disclosed specific sales figures for its Copilot product, any positive traction could strengthen Microsoft’s enterprise portfolio and, in turn, boost its share price over the long haul.

#2

BioNTech’s strengths lie in its mRNA platform. Now that the royalty issues are mostly resolved, management can refocus on pipeline development, including possible cancer vaccines.

#3

Investors in health services companies should pay attention to the DOJ’s stance, as it can set precedents for future mergers.

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