This subscriber loss may haunt RIM in coming months

 share price popped by 8% soon after it released its earnings, buoyed by positive sales and earnings surprises. The fact that RIM managed to beat expectations on both fronts is a real achievement. The company has been able to manage the 50% annualized decline in device volume a lot more gracefully than most investors expected. The adjusted EPS loss of $0.22 was much smaller than the $0.36 loss Wall Street expected. However, there is a fly in the ointment the size of a hamster — for the first time ever, the base of BlackBerry subscribers has started shrinking globally. Wall Street expected RIM to add 300,000 new subscribers. Instead, the company lost about a million, with the number of total subscribers dipping from 80 million to 79 million in three months.
[More from BGR: RIM’s first BlackBerry 10 smartphone to be called the ‘Z10′]
The key surprise in RIM’s summer quarter was the company’s ability to expand its subscriber base even as its sales in the United States and the United Kingdom markets tanked. That was one of the factors that underpinned the strong share price rebound during the autumn. And the key surprise in RIM’s November quarter is the new trend of subscriber base decline. What has been crucially important for RIM over the past dark year is the rock solid loyalty of its emerging market customers in South Africa, Nigeria, Indonesia, Malaysia, the Philippines and Brazil. Those markets have enabled RIM to beat subscriber base estimates for four quarters running, even as American and British consumers abandoned the brand.
[More from BGR: RIM beats estimates in Q3, but subscriber base shrinks]
That loyalty may now be wobbling. Nokia (NOK) launched a broad range of very cheap Asha QWERTY models in the beginning of 2012 and has been pushing these models aggressively into Africa and Asia over the past two quarters. Samsung (005930) has moved into bargain basement level with its own Android QWERTY devices dropping to the 5,000 rupee level and below in India. This pincer move may have started to take its toll on RIM.
RIM added 2 million subscribers during the August quarter and then lost 1 million in the November quarter. It’s hard to estimate precise rates, because RIM refuses to give out detailed information but this could represent a swing from 9% annualized growth to 4% annualized decline in just three months.
In a couple of months, RIM will launch a new range of Blackberry models with a spanking new OS and appealing revamp of the Blackberry Messenger software. But the first models coming out will be expensive and aimed at business users. The low-end erosion that the autumn subscriber loss indicates may bite deep during the February and May quarters. What RIM really needs badly is a range of appealing new QWERTY devices priced well below $200 in retail. It is not clear when these devices will arrive. Much hinges now on whether RIM has an aggressive low-end strategy in place or whether the company will chase the dream of reconquering its high-end prominence.
Messaging apps like 2go and WhatsApp are growing at breakneck speed in Africa and Asia — they knit together users of various platforms from iOS to Android to S40 to Blackberry. The subscriber contraction of the November quarter indicates that RIM needs to somehow revive the emerging market interest in BBM very soon. The short squeeze that started in October is still driving RIM’s share price higher. But over the coming weeks we may well see investors begin to ponder the year 2013 subscriber trajectory.

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RIM loses BlackBerry subscribers for first time

 Research In Motion's stock plunged in after-hours trading Thursday after the BlackBerry maker said it plans to change the way it charges fees.
RIM also announced that it lost subscribers for the first time in the latest quarter, as the global number of BlackBerry users dipped to 79 million.
In a rare positive sign, the Canadian company added to its cash position during the quarter as it prepared to launch new smartphones on Jan. 30. The new devices are deemed critical to the company's survival.
RIM's stock initially jumped more than 8 percent in after-hours trading on that news, but then fell $1.48, or 10.4 percent, to $12.65 after RIM said on a conference call that it won't generate as much revenue from telecommunications carriers once it releases the new BlackBerry 10 platform.
RIM is changing the way it charges service fees, putting an important source of revenue at risk. RIM CEO Thorsten Heins said only subscribers who want enhanced security will pay fees under the new system.
"Other subscribers who do not utilize such services are expected to generate less or no service revenue," Heins said. "The mix in level of service fees revenue will change going forward and will be under pressure over the next year during this transition."
RIM's stock had been on a three-month rally that has seen the stock more than double from its lowest level since 2003.
But Mike Walkley, an analyst with Canaccord Genuity, said BlackBerry 10 will change RIM's services revenue model dramatically. He said that instead of getting about $6 per device each month from carriers and users RIM could get as little as zero.
"That's what turned the stock from being up 10 percent to being down 10 percent," Walkley said. "That's been part of our worry. How do they come back with a new platform and get carriers to continue to share the higher revenue —which sounds like they are not going to— and then subsidize the phone to make it affordable for consumers and enterprises."
"People are seeing that the services revenue has a lot of risk to it now with the BlackBerry 10 migration."
Three months ago, RIM had 80 million subscribers. Analysts said the loss of 1 million subscribers was expected. Once coveted symbols of an always-connected lifestyle, BlackBerry phones have lost their luster to Apple's iPhone and phones that run on Google's Android software.
RIM is banking its future on its much-delayed BlackBerry 10 platform, which is meant to offer the multimedia, Internet browsing and apps experience that customers now demand.
"We believe the company has stabilized and will turn the corner in the next year," Heins said. He noted that the company's cash holdings grew by $600 million in the quarter to $2.9 billion, even after the funding of all its restructuring costs. RIM previously announced 5,000 layoffs this year.
Heins said subscribers in North America showed the largest decline, but said there is growth overseas.
Colin Gillis, an analyst with BGC Financial, said before the conference call that the company bought itself more time.
"It doesn't mean (BlackBerry) 10 will gain traction. A lot of people said 10 would be DOA, but I don't think that's going to be the case," he said.
Jefferies analyst Peter Misek also earlier called the results better than expected, noting that RIM added a significant amount of cash. RIM will need the money to advertise the new BlackBerrys and operating system.
Misek also called it a positive development that RIM said there would not be another delay to BlackBerry 10.
"The success or failure of this company will be on BlackBerry 10," Misek said.
RIM posted net income of $14 million, or 3 cents per share for its fiscal third quarter, which ended Dec. 1. That compares with a profit of $265 million, or 51 cents per share, in the same quarter a year ago.
The latest figure includes a favorable tax settlement. Excluding that adjustment, RIM lost 22 cents per share. Analysts polled by FactSet were expecting a wider loss of 27 cents.
RIM reported revenue of $2.7 billion, down 47 percent from a year ago.

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RIM shares slump as service revenue, subscriber concerns weigh

Research In Motion shares tumbled more than 10 percent on Thursday after the company reported the first ever decline in its subscriber numbers and outlined plans to transform the way it charges for its BlackBerry services.
RIM, which hopes to revive its fortunes and reinvent itself via the launch of a brand new line of BlackBerry 10 devices next month, caught investors off-guard on its quarterly conference call, when it said it plans to alter its service revenue model - a move that will pressure the high-margin business that accounts for about a third of RIM's sales.
"RIM provided few details regarding the economics of these changes, thus adding a large cloud of uncertainty to the primary driver of its profitability, which we view as especially worrisome given risks already surrounding the firm's massive BlackBerry 10 transition," said Morningstar analyst Brian Colello.
Those subscribers who need enhanced services like advanced security will pay for these services, while those who do not use such services will generate much lower to no service revenue, RIM Chief Executive Thorsten Heins told analysts and investors on a conference call on Thursday.
"I want to be very clear on this. Service revenues are not going away, but our business model and service offerings are going to evolve ... The mix in level of service fees revenue will change going forward and will be under pressure over the next year," cautioned Heins.
The news startled investors, who had earlier in the evening pushed RIM's stock more than 7 percent higher in post-market trading, after the company reported a narrower-than-expected quarterly loss and said it boosted its cash cushion ahead of next month's crucial launch of the BlackBerry 10 smartphone.
RIM's shares have for weeks been on a tear as optimism around BB10 has grown. Following RIM's surprise announcement on service revenues, however, the stock ended 9 percent lower at $12.85 in trading after the closing bell.
Analysts also expressed concern about the decline in RIM's subscriber base.
"The early reaction was probably just 'Hey, numbers looked OK, better loss, the cash flow was good' but if you know the company, you're looking at the subscriber base falling off," said Mark McKechnie at Evercore Partners in San Francisco.
CASH BALANCE
One reason the shares rose earlier was RIM managed to build up its cash cushion to $2.9 billion from $2.3 billion in the previous quarter.
Analysts have been keeping a sharp eye on the size of RIM's cash pile, as RIM will need the funds to manufacture and effectively promote BlackBerry 10 in a crowded market.
RIM is counting on the new line to claw back market share lost in recent years to the likes of Apple Inc's iPhone and a slew of devices powered by Google Inc's Android operating system.
"They've done a great job at generating cash," said Raymond James analyst Tavis McCourt in Nashville. "They're certainly in a much better position than they were three or four quarters ago."
The Waterloo, Ontario-based company said it is now testing its BB10 devices with more than 150 carriers - up from about 50 carriers as of the end of October. RIM expects more carriers to come on board ahead of the formal launch of BB10 on January 30.
Positive feedback from developers and carriers around RIM's new BlackBerry 10 devices has buoyed the stock in the last three months. Despite the plunge in RIM's share price on Thursday, the stock has more than doubled in value the last three months.
SMALLER-THAN-EXPECTED LOSS
On an operating basis, RIM fared a little better than Wall Street had expected. It reported a loss of $114 million or 22 cents a share, excluding one-time items. Analysts, on average, had forecast a loss of 35 cents a share, according to Thomson Reuters I/B/E/S.
RIM also reported a surprise net profit of $9 million, or 2 cents a share, for its fiscal third quarter ended December 1, on the back of a one-time income tax related gain. That compared with a year-ago profit of $265 million, or 51 cents.
RIM said it shipped 6.9 million smartphones in the quarter, even as its subscriber base fell to about 79 million in the quarter from about 80 million in the period ended September 1.
In recent years, RIM's user base has grown, even as the BlackBerry lost ground in North America and Europe, boosted by gains in emerging markets. While eye opening, the shrinkage was not as bad as some observers expected during the last quarter before the BB10 launch.
"We're encouraged that the subscriber base only declined slightly during a very public transition, and BlackBerry sales were about what we expected," said Morningstar's Colello, who is based in Chicago.

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Nokia to get payments in patent deal with RIM

Struggling Finnish mobile phone maker Nokia has settled its patent dispute with BlackBerry maker Research in Motion in return for payments, as it tries to exploit its trove of technology patents to boost its finances.
Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.
Nokia is one of the industry's top patent holders, having invested 45 billion euros ($60 billion) in mobile research and development over the past two decades.
It has been trying to make use of that legacy to ensure its survival, amid a fall in sales as well as cash. The Finnish firm is battling to recover lost ground in the lucrative smartphone market to the likes of Apple and Samsung.
The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC Corp and ViewSonic still stood.
"This agreement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market," said Paul Melin, Nokia's chief intellectual property officer.
Nokia has earned around 500 million euros a year from patent royalties in key areas of mobile telephony.
Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully.
Analysts estimated its June 2011 settlement with Apple was worth hundreds of millions of euros.

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HTC brushes off Microsoft’s earlier rejection, will reportedly make Windows RT tablets after all

Microsoft (MSFT) may have barred HTC (2498) from participating in the first wave of Windows RT tablets, but that apparently hasn’t stopped the company from gearing up for the next wave. Unnamed sources have told Bloomberg that HTC “is working on a 12-inch device and a 7-inch version” of a Windows RT tablet “that can also make phone calls.” The planned seven-inch tablet, which will be unveiled alongside the 12-inch tablet some time in 2013, will be the first small Windows RT tablet to hit the market and go head-to-head with other popular small tablets such as the Google (GOOG) Nexus 7 and the iPad mini.

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Zurich puts Sandy storm damage claims at $700 million

 Zurich estimates that damage claims relating to tropical storm Sandy, which hit the United States in October, will amount to $700 million in its fourth-quarter earnings.
The Swiss insurer's announcement on Monday also said that it expects $58 million of "reinstatement premiums due on reinsurance covers". The company gave no further explanation. It is due to report quarterly earnings on February 14.
The storm, which killed 132 people in the United States and Canada on October 29, led to power outages, disruptions of public transport and massive damage to infrastructure.
U.S. insurer AIG said it expects post-tax losses of at least $1.3 billion from Superstorm Sandy, while Travelers Companies Inc and Swiss Re estimated their claims burdens at $650 million after tax and $900 million before tax respectively.
Sandy is expected ultimately to be the second-costliest catastrophe in U.S. history, with insured loss estimates as high as $25 billion. The costliest catastrophe was hurricane Katrina in 2005.

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Laclede to double customers in $1 billion deal with Energy Transfer

 Natural gas distributor Laclede Group Inc is buying two utilities from Energy Transfer Equity LP for $1 billion, doubling its customer numbers and boosting its exposure to more stable state-regulated income.
More than 91 percent of Laclede's earnings will come from rate-regulated business after the acquisition of Missouri Gas Energy and New England Gas Co, owned by Energy Transfer's affiliate, Southern Union Co.
About 68 percent of Laclede's operating revenue of $1.12 billion came from its regulated gas distribution business in the year ended September 30.
"With lower ... prices, more and more customers are interested in using natural gas," Chief Executive Suzanne Sitherwood told Reuters. "The other emerging market that is taking place is with natural gas vehicles."
Gas prices have fallen sharply from their peak of more than $13 per million metric British thermal unit (mmBtu) to about $3 now due to vast supplies from shale fields in North America.
This has prompted increased use of gas for heating and power generation. Westport Innovations Inc , General Motors Co , Caterpillar Inc and Ford Motor Co are some of the companies developing technologies to drive the use of the fuel in vehicles.
Laclede too has been working on fueling natural gas vehicles and has received a lot of interest for possible partnerships, Sitherwood said. She did not name the interested parties.
GOOD PRICE FOR ETE
Missouri Gas and New England Gas, which had combined revenue of about $517 million for the year ended September 30, serve more than 500,000 customers in western Missouri and about 50,000 in Massachusetts.
The acquisition, which includes debt of about $20 million, will take Laclede's customer base to 1.2 million, the company said in a statement.
Laclede expects the acquisition to be neutral to its earnings per share in the first full year after close, likely in the third quarter of 2013.
Energy Transfer Partners LP , a unit of Energy Transfer Equity and a party to the deal, said the transaction was part of the company's efforts to divest non-core assets.
The gas utilities passed into Energy Transfer's hands when it bought pipeline operator Southern Union Co last year.
"For the Energy Transfer family, this (deal) compares favorably to our previously modeled $710 million sale estimate," analysts at Robert W. Baird wrote in a note to clients.
St Louis, Missouri-based Laclede said Wells Fargo Bank will provide a $1 billion bridge facility for the purchase.
Laclede shares were down about 2 percent at $39.12 in afternoon trading on Monday on the New York Stock Exchange. Shares of Energy Transfer Equity and Energy Transfer Partners were slightly up.
Wells Fargo Securities LLC advises Laclede, while Credit Suisse Securities LLC is advising Energy Transfer and Southern Union. Moelis & Co gave the fairness opinion to Laclede.

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Sun Life sells U.S. annuity business, shares drop

 Sun Life Financial Inc will sell its U.S. annuity business for $1.35 billion to a firm connected to Guggenheim Partners in a deal that should reduce the exposure of the insurer's earnings to market swings and boost its cash levels.
While the deal could bring long-term benefits to Sun Life, whose earnings have been derailed by wild market swings during recent years, investors pulled the company's shares down by nearly 4 percent as the financial terms fell short of initial expectations.
"The stock's sort of correcting back because the deal isn't quite as big a windfall as I think the market was anticipating," said National Bank financial analyst Peter Routledge.
Delaware Life Holdings, owned by certain Guggenheim clients and shareholders, will rename itself Delaware Life Insurance Co following the cash purchase. Guggenheim will provide investment management services to the new company.
Sun Life, Canada's No. 3 insurer, said last year it would stop selling variable annuities and individual life products in the United States to focus more on group insurance and voluntary benefits.
Variable annuities - retirement products that guarantee the investor a minimum monthly payment - became a source of earnings volatility for Sun Life in the wake of the 2008 financial crisis. That is because low interest rates and Canadian accounting rules force insurers to take upfront losses on products that will not come due for years.
"The business makes money, but not enough," said Routledge.
Weak equity markets and low bond yields sent Sun Life's profit down 87.5 percent during the second quarter of 2012 and caused losses during the third and fourth quarters of 2011.
EARNINGS HIT
The deal will cut Sun Life's profit by 22 Canadian cents a share annually and reduce book value by C$950 million ($965 million), the company said in a statement. According to Thomson Reuters I/B/E/S, Sun Life was expected to earn C$2.53 a share on a net basis in 2013.
The deal has also prompted Sun Life to take a second look at its 2015 financial targets, which include a goal of C$2 billion in operating profit.
In an interview, Sun Life Chief Executive Dean Connor said he would update the market on the targets after the deal closes, which is expected during the second quarter next year.
"I'm not saying we will necessarily reduce them. I'm not saying we will necessarily leave them as they are, because we don't know yet," he said.
The deal is also expected to reduce the company's earnings sensitivity to equity markets by 50 percent and its sensitivity to interest rates by 35 percent, compared with estimates on September 30.
It will raise Sun Life's cash position to C$1.9 billion.
"Over time, we'll redeploy that cash to fund growth," said Connor. He said the growth could include acquisitions on the "smaller end of the spectrum."
Sun Life, which also owns U.S. asset manager MFS Investment Management, is targeting growth in its Asian business.
SHARES DOWN
Sun Life shares, which have outperformed its rivals with a 47 percent year-to-date rise coming into Monday's session, ended down 3.9 percent at C$26.74 on the Toronto Stock Exchange. Despite the strong rise this year, the stock still trades at less than half its all-time high set in 2007.
Robert Sedran, an analyst at CIBC World Markets, said in a research note that the earnings and book value reductions were worse than he had expected.
"Moreover, while the decline in the earnings sensitivity to market variables improves the risk-reward profile, we did not view those sensitivities as excessive to begin with," he said.
However, he said the deal will free up time and capital that would otherwise have been engaged in what is essentially a closed business, which is a positive.
Morgan Stanley & Co advised Sun Life on the transaction financials.
Law firm Debevoise & Plimpton LLP was legal adviser to Sun Life, while Skadden, Arps, Slate, Meagher & Flom advised Guggenheim Partners.

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FactSet forecasts second-quarter results largely below estimates, shares fall

 FactSet Research Systems Inc reported lower-than-expected first-quarter revenue, and the financial information provider forecast current-quarter results largely below estimates as banks and brokerages cut costs.
FactSet shares fell 5 percent before the bell on Tuesday.
The company, which provides data to portfolio managers, research analysts and investment bankers, forecast second-quarter earnings of $1.11 to $1.13 per share, on revenue of $212 million and $215 million.
Analysts on average were expecting earnings of $1.13 per share on revenue of $216.3 million, according to Thomson Reuters I/B/E/S.
FactSet's financial sector clients are cutting staff and trimming costs to cope with increased regulation and a struggling global economy.
In the United States, financial companies have announced plans to cut 28,000 jobs through the first nine months of this year, compared with 54,000 during the same period in 2011, according to executive placement firm Challenger, Gray & Christmas.
FactSet said its net income rose to $49.8 million, or $1.11 per share, in the first quarter, from $45.5 million, or 99 cents per share, a year earlier.
The company earned $1.22 cents per share, excluding items.
Revenue rose 7.5 percent to $211.1 million for the quarter ended November 30.
Analysts on average had expected earnings of $1.11 per share, on revenue of $212.3 million.
FactSet rival Thomson Reuters Corp, the owner of Reuters News, last month reported a 15 percent fall in operating profit for the quarter ended September 30, on declining revenue and higher costs in its division that serves the financial industry.
FactSet's shares closed at $96.39 on the New York Stock Exchange on Monday.

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Jefferies results beat estimates on higher fixed-income revenue

 Jefferies Group Inc reported a higher-than-expected adjusted quarterly profit as the investment bank benefited from higher earnings from its fixed-income unit, and said its business expansion in Asia has started delivering.
The midsized investment bank has been expanding in China and India and recently poached bankers from the Royal Bank of Scotland to expand its business in China.
Jefferies said it also benefited from a pickup in trading across the board in September thanks to fresh stimulus plans from the U.S. Federal Reserve, and that it was gaining market share from larger rivals. The Fed had unveiled a program to purchase $40 billion in mortgage bonds.
The company saw its trading revenue more than double to $293 million from $141 million a year earlier.
"Our competitive position is very strong so across the products within fixed income I think we're gaining market share," Chief Executive Richard Handler said on a post-earnings conference call.
As the first investment bank to report earnings, Jefferies is often viewed as an indicator for larger Wall Street banks such as Goldman Sachs Group and Morgan Stanley .
Jefferies, founded in 1962 in Los Angeles to trade large stock orders away from the New York Stock Exchange, agreed last month to be bought by top shareholder Leucadia National Corp for $2.76 billion in stock.
"Combining our company with an extremely well-capitalized parent will allow us to continue to aggressively add value to our clients," Jefferies said in a statement on Tuesday.
Compensation costs at the company remained high with the company paying 59.9 percent of net revenue to employees, in line with previous periods but higher than the 50 percent industry peers generally target.
Net income rose to $72 million, or 31 cents per share, in the fourth quarter from $48 million, or 21 cents per share, a year earlier.
On an adjusted basis, earnings were 35 cents per share.
Analysts had expected the company to earn 32 cents per share, according to Thomson Reuters I/B/E/S.
Revenue for the quarter rose 39 percent to $769 million, above estimates of $722.6 million. Investment banking revenue rose 8 percent to $283 million.
Jefferies shares, which have risen 12 percent since the Leucadia deal was announced in mid-November, was trading up 2.5 percent at $18.70 on the New York Stock Exchange on Tuesday.

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The Great Netflix Christmas Outage Is Thankfully Over

The great Netflix outage of Christmas 2012 is thankfully over, according to a tweet from the company. The service went down last night, during arguably one of the worst possible times ever, when many people stuck at home with their families would hope to seek a little refuge in some streaming movies.
Special thanks to our awesome members for being patient. We're back to normal streaming levels. We hope everyone has a great holiday.
— Netflix US (@netflix) December 25, 2012
Netflix blamed the outage on the Amazon Web Services Elastic Compute Cloud, which frequently takes out parts of the Internet when its servers go down. AWS reported "Elastic Load Balancing Service" issues on its status page last night and this morning. Curiously, this time, the outage only affected Netflix's video service and not Amazon's own video service, as GigaOm's Barb Darrow pointed out. Heroku, a cloud application platform, was also down. Perhaps its not such a good idea for Netflix to use its competition to host its site? As for the rest of you, you can now go back to spending quality, no-talking allowed, movie-time with the fam.

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Netflix streaming service back online after outage

Those hoping to spend the holiday watching streaming video from Netflix can now get back in front of their TVs, tablets and PCs after a Christmas Eve outage.
A Netflix Inc. spokesman said by email Tuesday morning that the service has been fully restored.
The outage affected customers in the Americas starting around 12:30 p.m. PST on Monday. The company, which is based in Los Gatos, Calif., blames problems with Amazon Web Services, and says it is investigating further.
Amazon Web Services provides companies with online storage and computing. It is separate from Seattle-based Amazon.com Inc.'s better-known shopping website.

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Netflix suffers Christmas Eve outage, points to Amazon

 An outage at one of Amazon's web service centers hit users of Netflix Inc.'s streaming video service on Christmas Eve and was not fully resolved until Christmas day, a spokesman for the movie rental company said on Tuesday.
The outage impacted Netflix subscribers across Canada, Latin America and the United States, and affected various devices that enable users to stream movies and television shows from home, Netflix spokesman Joris Evers said. Such devices range from gaming consoles such as Nintendo Wii and PlayStation 3 to Blu-ray players.
Evers said that the issue was the result of an outage at an Amazon Web Services' cloud computing center in Virginia, and started at about 12:30 p.m. PST (2030 GMT) on Monday and was fully restored Tuesday morning, although streaming was available for most users late on Monday.
"We are investigating exactly what happened and how it could have been prevented," Evers said.
"We are happy that people opening gifts of Netflix or Netflix capable devices can watch TV shows and movies and apologize for any inconvenience caused last night," he added.
An outage at Amazon Web Services, or AWS, knocked out such sites as Reddit and Foursquare in April of last year.
Amazon Web Services was not immediately available for comment. Evers, the Netflix spokesman, declined to comment on the company's contracts with Amazon.

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Samsung Elec seeks U.S. sales ban on some Ericsson products

Samsung Electronics said on Wednesday it had filed a complaint against Ericsson with the U.S. International Trade Commission (ITC), requesting a U.S. import ban and sales ban on some of the Swedish telecoms equipment maker's products.
The action taken on Friday by the world's top smartphone maker, which accused Ericsson of breaching seven of its patents, came after Ericsson requested an ITC U.S. import ban on Samsung products and sued the South Korean firm for patent infringement.
"We have sought to negotiate with Ericsson in good faith. However, Ericsson has proven unwilling to continue such negotiations by making unreasonable claims, which it is now trying to enforce in court," Samsung Electronics said in a statement.
"The accused Ericsson products include telecommunications networking equipment, such as base stations," Samsung said.
With Ericsson suffering a big drop in sales at its network unit, down 17 percent in the third quarter, it is turning to the courts to maintain its patent income, part of a wider trend where big technology names are fiercely protecting intellectual property as global sales of tablets and smartphones boom.
Ericsson is facing a growing challenge from Samsung Electronics, a smaller player in the network equipment market.
"I'm sure that at this point, no one in the industry would underestimate Samsung's ability to become a significant player, if not the leader, in a new segment of the overall market for telecommunications hardware," Florian Mueller, a patent expert, said in a blog posting on Monday.
"This certainly adds a more strategic dimension to the Ericsson-Samsung dispute."
Samsung Electronics and its arch smartphone rival Apple Inc have been also locked in patent disputes in at least 10 countries as they vie to dominate the mobile market and win over customers with their latest gadgets.
The European Commission on Friday charged Samsung Electronics with abusing its dominant position in seeking to bar rival Apple from using a patent deemed essential to mobile phone use.
Samsung Electronics shares were trading up 1.3 percent, outperforming the wider market's 0.7 percent gain as of 0037 GMT.

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Netflix blames Amazon for Christmas Eve outage

 An outage at one of Amazon's web service centers hit users of Netflix Inc's streaming video service on Christmas Eve and was not fully resolved until Christmas Day, a spokesman for the movie rental company said on Tuesday.
The outage impacted Netflix subscribers across Canada, Latin America and the United States, and affected various devices that enable users to stream movies and television shows from home, Netflix spokesman Joris Evers said. Such devices range from gaming consoles like the Nintendo Wii and PlayStation 3 to Blu-ray DVD players.
Netflix, which is based in Los Gatos, California, has 30 million streaming subscribers worldwide, of which more than 27 million are in the Americas region that was exposed to the outage and could have potentially been affected, Evers said.
Evers said the issue was the result of an outage at an Amazon Web Services' cloud computing center in Virginia and started at about 12:30 p.m. PST (2030 GMT) on Monday and was fully restored before 8:00 a.m. PST Tuesday morning, although streaming was available for most users by 11:00 p.m. PST on Monday.
The event marks the latest in a series of outages from Amazon Web Services, with one occurring in April of last year that knocked out such sites as Reddit and Foursquare.
"We are investigating exactly what happened and how it could have been prevented," Evers of Netflix said.
"We are happy that people opening gifts of Netflix or Netflix capable devices can watch TV shows and movies and apologize for any inconvenience caused last night," he added.
Officials at Amazon Web Services were not available for comment. Evers, the Netflix spokesman, declined to comment on the company's contracts with Amazon.

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Pope's Christmas message focuses on Mideast, China

 In his Christmas message to the world Tuesday, Pope Benedict XVI called for an end to the slaughter in Syria and for more meaningful negotiations between Israelis and Palestinians, while encouraging more religious freedom under China's new leaders.
Delivering the traditional speech from the central balcony of St. Peter's Basilica, Benedict also encouraged Arab spring nations, especially Egypt, to build just and respectful societies.
The pope prayed that China's new leadership may "esteem the contribution of the religions, in respect for each other" to help build a "fraternal society for the benefit of that noble people."
It was a clear reference to the Chinese government's often harsh treatment of Catholics loyal to the pontiff instead of to the state-sanctioned church. Earlier this month, the Vatican refused to accept the decision by Chinese authorities to revoke the title of a Shanghai bishop, who had been appointed in a rare show of consensus between the Holy See and China.
As the 85-year-old pontiff, bundled up in an ermine-trimmed red cape, gingerly stepped foot on the balcony, the pilgrims, tourists and Romans below backing St. Peter's Square erupted in cheers.
Less than 12 hours earlier, Benedict had led a two-hour long Christmas Eve ceremony in the basilica. He sounded hoarse and looked weary as he read his Christmas message and then holiday greetings in 65 languages.
In his "Urbi et Orbi" speech, which traditionally reviews world events and global challenges, Benedict prayed that "peace spring up for the people of Syria, deeply wounded and divided by a conflict that does not spare even the defenseless and reaps innocent victims."
He called for easier access to help refugees and for "dialogue in the pursuit of a political solution to the conflict."
Benedict prayed that God "grant Israelis and Palestinians courage to end long years of conflict and division, and to embark resolutely on the path to negotiation."
Israel, backed by the United States, opposed the Palestinian statehood bid, saying it was a ploy to bypass negotiations, something the Palestinians deny. Talks stalled four years ago.
Senior Palestinian official Saeb Erekat said that in a meeting with the pope last week, Palestinian President Mahmoud Abbas "emphasized our total readiness to resume negotiations." The Palestinians have not dropped their demand that Israel first stop settlement activities before returning to the negotiating table.
Hours earlier, in the ancient Bethlehem church built over the site where tradition holds Jesus was born, candles illuminated the sacred site and the joyous sound of prayer filled its overflowing halls.
Overcast skies and a cold wind in the Holy Land didn't dampen the spirits of worshippers in the biblical West Bank town. Bells pealed and long lines formed inside the fourth-century Church of the Nativity complex as Christian faithful waited to see the grotto that is Jesus' traditional birthplace.
Duncan Hardock, 24, a writer from MacLean, Virginia, traveled to Bethlehem from the republic of Georgia, where he had been teaching English. After passing through the separation barrier Israel built to ward off West Bank attackers, he walked to Bethlehem's Manger Square where the church stands.
"I feel we got to see both sides of Bethlehem in a really short period of time," Hardock said. "On our walk from the wall, we got to see the lonesome, closed side of Bethlehem ... But the moment we got into town, we're suddenly in the middle of the party."
Bethlehem lies 10 kilometers (6 miles) south of Jerusalem. Entry to the city is controlled by Israel, which occupied the West Bank in 1967.
For those who couldn't fit into the cavernous Bethlehem church, a loudspeaker outside broadcast the Christmas day service to hundreds of faithful in the square.
Their Palestinian hosts, who welcome this holiday as the high point of their city's year, were especially joyous this season, proud of the United Nations' recognition of an independent state of Palestine just last month.
"From this holy place, I invite politicians and men of good will to work with determination for peace and reconciliation that encompasses Palestine and Israel in the midst of all the suffering in the Middle East," said the top Roman Catholic cleric in the Holy Land, Latin Patriarch Fouad Twal in his annual address.
Back at the Vatican, Benedict offered encouragement to countries after the Arab spring of democracy protests. He had a special word for Egypt, "blessed by the childhood of Jesus."
Without citing the tumultuous politics and clashes in the region, he urged the North African region to build societies "founded on justice and respect for the dignity of every person."
Benedict prayed for the return of peace in Mali and harmony in Nigeria, where, he recalled "savage acts of terrorism continue to reap victims, particularly among Christians."
The Vatican for decades has been worried about the well-being of its flock in China, who are loyal to the pope in defiance of the communist's government support of an officially sponsored church, and relations between Beijing and the Holy See are often tense.
Speaking about China's newly installed regime leaders, Benedict expressed hope that "they will esteem the contribution of the religions, in respect for each other, in such a way that they can help to build a fraternal society for the benefit of that noble people and of the whole world."
Acknowledging Latin America's predominant Christian population, he urged government leaders to carry out commitments to development and to fighting organized crime.
In Britain, the royal family was attending Christmas Day church services at St. Mary Magdelene Church on Queen Elizabeth II's sprawling Sandringham estate, though there were a few notable absences. Prince William is spending the holiday with his pregnant wife Kate and his in-laws in the southern England village of Bucklebury, while Prince Harry is serving with British troops in Afghanistan.
Later Tuesday, the queen delivered her traditional, prerecorded Christmas message, which for the first time was broadcast in 3D.
At Canterbury cathedral, Anglican leader Rowan Williams delivered his final Christmas day sermon as archbishop of Canterbury. He acknowledged how the church's General Synod's vote against allowing women to become bishops had cost credibility and said the faithful felt a "real sense of loss" over the decision.
In the U.S., the Rev. Jesse Jackson brought his message of anti-violence and gun control to a Chicago jail, using his traditional Christmas Day sermon at the facility to challenge inmates to help get guns off the streets.
"We've all been grieving about the violence in Newtown, Connecticut, the last few days," he told reporters after addressing inmates, referring to the Dec. 14 school shooting that killed 26 children and adults. "Most of those here today ... have either shot somebody or been shot. We're recruiting them to help us stop the flow of guns."
In Newtown, well-wishers from around the U.S. showed up on Christmas morning to hang ornaments on a series of memorial Christmas trees while police officers from around Connecticut took extra shifts to direct traffic and patrol the town to give local police a day off. In a 24-hour vigil, volunteers watched over 26 candles that had been lit at midnight in honor of those slain at the Sandy Hook Elementary School.
At a town hall memorial, Faith Leonard waved to people driving by and handed out Christmas cookies, children's gifts and hugs to anyone who needed it.
"I guess my thought was if I could be here helping out maybe one person would be able to spend more time with their family or grieve in the way they needed to," said Leonard, who drove to Newtown from Gilbert, Arizona, to volunteer on Christmas morning.
At St. Rose of Lima Roman Catholic Church, which eight of the child victims of the massacre attended, the Rev. Robert Weiss told parishioners that "today is the day we begin everything all over again."
"We know Christmas in a way we never ever thought we would know it," he said. "We need a little Christmas and we've been given it."
In a New York City neighborhood ravaged by Superstorm Sandy in late October, some holiday traditions had to go by the wayside, but Christmas was celebrated with a special sense of gratitude.
Midmorning and noon Masses were packed Tuesday at St. Francis De Sales Church in the Rockaways; the church only recently got heat restored after Sandy flooded its basement. The bells and organ still don't work, so St. Francis De Sales is making do with a keyboard for now.
"But nobody is feeling morose or down. They're just rebuilding their lives, keeping the faith and going forward," choir member Ed Quinn said. "It's not the best of circumstances, that's for sure. But we're making the best of it.

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Cricket-South Africa v New Zealand Twenty20 scoreboard

DURBAN, Dec 21 (Reuters) - Scoreboard from the first
Twenty20 International between South Africa and New Zealand at
Kingsmead Stadium on Friday.
New Zealand
R.Nicol c de Kock b Kleinveldt 3
P.Fulton c Morris b Steyn 9
B.McCullum c Steyn b Kleinveldt 6
J.Franklin c de Kock b McLaren 0
C.Munro c and b Morris 23
C.Anderson c Levi b Morris 5
N.McCullum b Peterson 1
J.Neesham b Peterson 10
D.Bracewell not out 21
R.Hira c Kleinveldt b Steyn 5
M.McClenaghan c Peterson b Kleinveldt 0
Extras (lb-1, w-2) 3
Total (all out in 18.2 overs) 86
Fall: 1-9, 2-19, 3-19, 4-27, 5-34, 6-36, 7-54, 8-60, 9-81
Bowling: McLaren 4-0-27-1, Steyn 3-0-13-2 (1w), Kleinveldt
3.2-1-18-3, Morris 3.4-0-19-2 (1w), Peterson 4-0-8-2, Du Plessis
0.2-0-0-0.
South Africa
R.Levi c Fulton b McClenaghan 0
H.Davids b Hira 20
F.du Plessis not out 38
Q.de Kock not out 28
Extras (w-1) 1
Total (for two wickets in 12.1 overs) 87
Fall: 1-0, 2-45
Bowling: McClenaghan 3-1-20-1, Bracewell 2-0-21-0 (1w), Hira
3-0-15-1, Anderson 1-0-11-0, N.McCullum 2-0-7-0, Nicol 1-0-11-0,
Neesham 0.1-0-2-0.
South Africa won by eight wickets and lead three-match
series 1-0.

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Tennis-Robson, Watson to warm up for Australian Open in Hobart

MELBOURNE, Dec 22 (Reuters) - British Olympic silver medallist Laura Robson and compatriot Heather Watson will warm up for the Australian Open at the Jan. 4-12 Hobart International, organisers said on Saturday.
The 18-year-old Robson, who won mixed doubles silver with men's singles champion Andy Murray at the London Olympics, will make her first appearance at the Tasmanian tournament headlined by former French Open champion Francesca Schiavone of Italy.
Watson, 20, who became Britain's first WTA champion in 24 years with her win at the Japan Open in October, returns for her second appearance after playing this year's tournament as a qualifier.

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Robson, Watson to warm up for Australian Open in Hobart

MELBOURNE (Reuters) - British Olympic silver medalist Laura Robson and compatriot Heather Watson will warm up for the Australian Open at the January 4-12 Hobart International, organisers said on Saturday.
The 18-year-old Robson, who won mixed doubles silver with men's singles champion Andy Murray at the London Olympics, will make her first appearance at the Tasmanian tournament headlined by former French Open champion Francesca Schiavone of Italy.
Watson, 20, who became Britain's first WTA champion in 24 years with her win at the Japan Open in October, returns for her second appearance after playing this year's tournament as a qualifier.
The Australian Open starts January 14.

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Cricket-Oram opts out of New Zealand contract

Dec 22 (Reuters) - All-rounder Jacob Oram has opted out of his New Zealand Cricket (NZC) central contract to focus on his professional Twenty20 career.
The 34-year-old Oram, who played 33 tests and 160 one-day internationals, secured an early release from his contract, NZC said in a statement on Saturday.
"This was a very difficult decision but in recent weeks I have come to the conclusion that I can no longer make a full-time commitment to NZC," Oram said in the statement.
"Various factors have led me to make this decision including my age, the stage of my career and the impending birth of my second child.
"I really enjoy the Twenty20 format and see it as a way to stay involved in cricket for a while longer."
Oram, who quit test cricket in 2009 in a bid to prolong his career, has struggled with injuries in recent years and managed only one ODI and a T20 match against Sri Lanka on tour in October and November.
He was left out of the team's T20 tour squad for South Africa and would be unlikely to feature in New Zealand's three one-day matches against the Proteas from Jan. 19-25, a NZC spokesman said.
Oram would continue to play T20 cricket for domestic side Central Districts and play in competitions overseas, he said.
However, the door would still be open for his return to international cricket again, NZC said.
A powerful striker of the ball, the 1.98 metre (6-ft-6in) left-hander compiled over 1,780 test runs at an average of over 36 and 2,434 runs in ODIs.
He also netted 60 test wickets with his right-arm medium pace bowling and 173 ODI wickets at an average of just over 29.

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Tsotsobe ruled out of Twenty20 series

DURBAN (Reuters) - South Africa left-arm pace bowler Lonwabo Tsotsobe has been ruled out of the three-match Twenty20 series against New Zealand starting on Friday after suffering an ankle injury, Cricket South Africa said.
Lonwabo, 28 was taken for a scan on Thursday after bowling 10 balls in the nets on the eve of the first international.
His withdrawal follows the news that another pace bowler Vernon Philander in an injury doubt for the first test starting in Cape Town on January 2 after injuring a hamstring in a domestic first class match.

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Ben Stiller's Red Hour sells two more comedies to ABC Studios

Ben Stiller's Red Hour Television is continuing to pump out comedies for ABC Studios.
Following the sale of "Complikated" in October, the production company has sold network's production division two new series - "You're Not Doing It Right" and "Between Two Kings" - a rep for Red Hour told TheWrap on Monday.
Comedian Michael Ian Black writes, stars and produces in the former, a half-hour single-camera comedy based on his book of the same name that explores his childhood, marriage, children and career. Set "in the wilds of Connecticut," the show takes a hard look at what happens when you wake up, look around and don't recognize the life you're living as your own, Red Hour said.
"Between Two Kings" is written and executive-produced by Jeff Kahn, who has written for series like "Drawn Together" and "The Ben Stiller Show." It follows the hardships of a divorced father raising an 11-year-old son while living in his elderly father's home.
Both are being executive-produced by Stiller, along with Red Hour's Debbie Liebling and Stuart Cornfeld.
Since signing an overall deal with ABC Studios at the end of 2011, Red Hour also has sold "Please Knock," written by Kevin Napier, and "The Notorious Mollie Flowers," written by Adam Resnick.
The sale of "You're Not Doing It Right" and "Between Two Kings" were first reported by Deadline.

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Participant Media plans cable TV network targeting millenials

 Entertainment company Participant Media, one of the backers of the hit historical drama "Lincoln", will launch a cable TV network next summer with programming that focuses on social issues of interest to the millenials generation of teens and young adults.
The channel's original programming, films and documentaries will be aimed at viewers age 18 to 34 in the large demographic group known as millenials, Participant Media CEO Jim Berk said in an interview on Monday.
Millenials are particularly interested in the type of content that Participant produces about social issues, Berk said. The studio's credits include the current release "Lincoln", about President Abraham Lincoln's push to ban slavery, last year's civil rights drama "The Help" and Al Gore climate change documentary "An Inconvenient Truth".
Participant Media is creating the new network by purchasing two existing cable channels, The Documentary Channel and Halogen TV. After those networks are combined and rebranded, the new channel will reach an estimated 40 million of the more than 100 million U.S. pay-TV subscribers.
The company, founded by billionaire and former eBay Inc President Jeff Skoll with the aim of producing entertaining content that inspires social change, interacts regularly with more than 2.5 million people through social media, local movie screenings and its Takepart.com website, Berk said.
The challenge for Participant will be to sign up additional pay-TV distributors and win viewership in a crowded media landscape. The company is privately held and is not part of a large media conglomerate.
"We have the funding necessary to take a very long-term view, and to spend what we need to spend in terms of programming," Berk said.
The mainstay of the network's lineup will be original programming from a variety of genres, said Evan Shapiro, a Participant executive who will run the new network.
The company is developing programming with established Hollywood names including former MTV President Brian Graden, "Inconvenient Truth" director Davis Guggenheim and documentary filmmaker Morgan Spurlock.
Participant also hopes to work with pay-TV distributors to make the channel's content available on mobile devices such as smartphones and tablets, to meet the viewing patterns of younger audiences, Shapiro said.

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"Family Guy," "Haven" episodes pulled due to Newtown shootings rescheduled

In a possible sign that the nation - or at least network programmers are beginning to regain their composure after Friday's horrific school shootings in Newtown, Conn., episodes of Fox's "Family Guy" and Syfy's "Haven" have been rescheduled.
The "Family Guy" episode "Jesus, Mary and Joseph," which was initially scheduled to run on Sunday before being pulled from the schedule following the massacre, will now air this upcoming Sunday.
While the episode isn't particularly violent, the holiday parody episode does poke fun at religion - something that might not have sat well in the days following the killings.
An episode of "American Dad" that also was pulled last Sunday has not yet been rescheduled.
The "Reunion" episode of Syfy's "Haven," which was due to air Friday night - the same day of the shootings - will now run on January 17, along with the show's season finale. That episode features fictional gun violence.
In addition to the "Family Guy" and "Haven" postponements, the TLC special "Best Funeral Ever" had its December 26 premiere date pushed back to January, while a recent episode of the ABC drama "Scandal," which depicted the killing of a family of four, was removed from the network's website Monday.

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Leah Remini sued by former managers over "Family Tools" commissions

Leah Remini's new TV gig is already giving her a headache, months before it even starts. Former "King of Queens" star Remini is being sued by her former managers, the Collective Management Group, which claims that it's owed $67,000 in commissions relating to her upcoming ABC comedy "Family Tools," which debuts May 1.
In a complaint filed with Los Angeles Superior Court on Tuesday, the Collective says that it entered into an agreement with the actress in November 2011 that guaranteed the company 10 percent of the earnings that emerged from projects that Remini "discussed, negotiated, contemplated, or procured/booked during Plaintiff's representation of Remini," regardless of whether the income was earned after she and the Collective parted ways.
According to the lawsuit, that would include the $1 million that it says Remini will earn for the first season of "Family Tools." (The suit allows that it isn't owed commission on a $330,000 talent holding fee that Remini received from ABC prior to officially being booked on the show.)
Remini, pictured above wearing the self-satisfied smirk of someone who just might stiff her former managers out of their commission, terminated her agreement with the Collective "without warning or justification" in October, the suit says.
Alleging breach of oral contract among other charges, the suit is asking for an order stipulating that it's owed the $67,000, plus unspecified damages, interest and court costs.
Remini's agent has not yet responded to TheWrap's request for comment.

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National Geographic marks anniversary with "Exploration" of Titanic, Lighting Strikes, Genghis Khan

 The National Geographic Channel is celebrating the 125th anniversary of the National Geographic Society with a new "Night of Exploration" on Fridays that will look at Titanic, Stonehenge, Easter Island, and more of the world's fascinating places and mysteries.
Beginning January 11, the network will air programs about exploration every Friday night from 8 to 10 p.m. On that night, it will premiere of "A New Age of Exploration: National Geographic at 125," which will feature such explorers as storm chaser Tim Samaras as he tries to film a lightning bolt the moment it hits the ground.
The special will also feature research scientist and engineer Albert Lin, who believes he's located the burial ground of Genghis Khan, and James Cameron and Bob Ballard as they plunge the ocean's depths. NGC will also re-air "Titanic: The Final Word With James Cameron" on January 11.
Subsequent Friday-night programming includes re-airings of "The Human Family Tree," "Stonehenge Decoded" and "Easter Island Underworld." Other re-airings include "Drain the Ocean," "King Tut and the Lost Dynasty," and "King Tut's Final Secrets."

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Cancer Immunotherapy Where Are We Going?

The compelling concept of utilizing the patient's own immune system for a stronger and more effective way to attack cancer cells is not a new one. William Coley observed in 1891 that infections produced in patients with inoperable cancer following an injection of streptococcal organisms (Gram-positive bacteria) led to tumor shrinkage especially when the patients developed fever and other signs of a full-blown infection.1 Since then, research has embraced approaches to "train" the patient's own immune system to recognize certain biomarkers or proteins that are mainly found on cancer cells and to destroy the cells.
After several setbacks the first cellular immunotherapy, Dendreon's Sipuleucel-T (Provenge(R)), was approved for the treatment of prostate cancer in 2010. Today, new promising cancer immunotherapy approaches are in clinical trials. Most recently, researchers at the 54th American Society of Hematology (ASH) meeting reported early success with a developmental-stage cell-based cancer vaccine for the treatment of leukemia and have shown remission in several patients 2,3, including a 7-year old girl who relapsed twice after chemotherapy.
Cancer immunotherapy can be thought of as either active or passive immunotherapy. The most prominent passive immunotherapies, which have revolutionized cancer therapy, are monoclonal antibodies that either target tumor-specific antigens and receptors or block important pathways central to tumor growth and survival. Therapeutic monoclonal antibodies are the market leader in the targeted cancer therapy space and include blockbusters such as trastuzumab (Herceptin(R)) or rituximab (Rituxan(R)).
In general, antibodies are significant elements of the body's adaptive immune system. They play a dominant role in the recognition of foreign antigens and the stimulation of the immune response. Therapeutic antibodies target and bind to antigens, usually proteins that are mainly expressed on diseased cells such as cancer cells. After binding, cancer cells can be destroyed by different mechanisms such as antibody-dependent cellular cytotoxicity, the activation of the complement system -- an important part of the immune system -- and triggering cell death.
Although very successful, especially in oncology, therapeutic antibodies have a significant limitation: they don't generate a memory response by the immune system, and thus, repeated antibody infusions are required. Further, monoclonal antibodies are only able to recognize specific proteins present of the cell surface. Monoclonal antibodies are mostly produced in cell culture systems which are often costly. Humanization of murine monoclonal antibodies by replacing of certain parts of the antibody with human sequences has improved the tolerability of antibodies and made them less immunogenic, but even fully human sequence-derived antibodies can carry some immunological risk.
Novel approaches in the passive immunization strategy include antibody drug conjugates, a combination of targeting antibody with a very potent drug such as the recently approved brentuximab vedotin (ADCETRIS(TM)) for Hodgkin lymphoma and anaplastic large cell lymphoma (ALCL). ADCETRIS comprises an anti-CD30 monoclonal antibodyanti-CD30 monoclonal antibody and a cytotoxic (cell-killing) agent that is released upon internalization into CD30-expressing tumor cells. Currently, the development of next generations of ADCs is underway.
Alternatively, specific and durable cancer immunotherapies designed to actively "train" or stimulate the patient's intrinsic immune response have been more problematic; however, recent success stories, such as the cell-based immunotherapy Provenge, have revitalized this field. Dendreon's approach modifies the patients' own dendritic cells to present a protein specific to prostate cancer cells.
Dendritic cells are the most potent, "professional" antigen-presenting cells. They process the antigen material and present it on their surface to other cells of the immune system. Once activated, the dendritic cells migrate to the lymphoid tissues where they interact with T-cells and B-cells -- white blood cells and important components of the immune system -- to initiate and shape the adaptive immune response. To develop Provenge, each patient's own dendritic cells are harvested and then loaded ex vivo with the tumor-associated antigen. Now "presenting" the antigen, the dendritic cells are administered back into the patient to induce a potent, cell-mediated anticancer immune response resulting in tumor shrinkage and clinical benefit.
In another experimental approach for the treatment of leukemia, patients' own modified T-cells were infused back into the patients. Prior to this, the T-cells were transduced with a lentivirus to express the CD19-specific chimeric antigen receptor. CD19 is an antigen which is found on B-cell neoplasms, cancerous B-cells, and the lentivirus was the vehicle to transfer the genetic material for CD19 into the cells. A case report published in the New England Journal of Medicine stated that a patient with chronic lymphocytic leukemia (CLL) was in ongoing remission 10 months after treatment.3
These promising results have spurred continued research for new and safe ways to achieve effective tumor vaccination, and drug developers have explored many cancer immunotherapy strategies. To generate an effective antitumor immunity, therapeutic intervention should drive several functions; specifically, it should promote the antigen presentation functions of dendritic cells, promote the production of protective T-cell responses, stimulate B-cells and overcome immunosuppression characteristics that are common to tumor cells.4
Cell-based therapeutic vaccines are most frequently produced outside the patient's body and involve isolation of the specific cells, such as dendritic cells, and the introduction of preselected antigens, often with the use of specific vehicle, into the cells. The antigens can be encoded in viral vectors (frequently DNA) or administered as peptides or proteins in a suitable adjuvant and carrier through a long and cumbersome process.
During my doctoral thesis, I conducted immunization experiments using RNA as a negative control, assuming that the RNA would be degraded during the experiment thus making it impossible to use as a vaccine. The physiological role of messenger (m) RNA is to transfer genetic information from the nucleus to the cytoplasm where this information is translated into the corresponding protein. mRNA is known to be very unstable and has a relatively short half-life. But astonishingly, we were able to measure a solid T-cell immune response. We repeated the experiment and confirmed that the RNA we had produced had the potential to be used as a vaccine. Importantly, we didn't need to isolate the patients' cells: mRNA-based vaccines can be injected directly into the skin (intradermal). The mRNA-based vaccines are then taken up by antigen-presenting cells, such as dendritic cells, and are then able to induce an immune response. Importantly, mRNA-vaccines can also be synthesized quickly for any antigen sequence identified.5
The first mRNA-based vaccines (RNActive(R)) are now in the clinic for the treatment of prostate cancer and lung cancer and have demonstrated that they do what they are supposed to do - induce a balanced humoral, as well as T cell-mediated, immune response that is entirely HLA independent. The HLA (human leukocyte antigen) system is used to differentiate the body's own cells (self) and non-self cells. Additionally, RNA-vaccines do not need a vehicle such as a virus for delivery to the cells, nor do they contain virus-derived elements that are often found in DNA-vaccines. These attributes make RNActive a very safe therapeutic.
The risk of integration of the RNA into the host-genome is minimized (RNA would have been transcribed first to DNA, and then it has to be transported to the nucleus), as is the residual risk of DNA-based vaccines for inactivating or activating genes or affecting cellular regulatory elements, which can induce oncogenesis. Thus, the favorable safety profile of mRNA-based therapies broadens their potential use not only for the treatment of diseases but for use as prophylactic vaccinations. A recent proof-of-concept study using mRNA-based vaccines (RNActive) in animal models for influenza was published in Nature Biotechnology.6
Therapeutic cancer immunotherapies and vaccines have come a long way, and novel, promising approaches give hope for safe and effective treatment options. This may one day lead to the treatment of all cancers as chronic diseases.

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