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News in brief - Sept. 15, 2003

HealthSouth executive resigns - Venture capital investment up - New name for Palm

HealthSouth executive resigns

The former president of HealthSouth's ambulatory services division has resigned, becoming the latest executive to leave the troubled outpatient services company.

HealthSouth announced Aug. 21 that Daniel J. Riviere had resigned to pursue other opportunities. The company said Robert P. May, HealthSouth's interim chief executive officer, would take over the division until a permanent replacement could be found.

Riviere's departure comes in the wake of an exodus of HealthSouth executives, 14 of whom have agreed to plead guilty to criminal charges in an accounting scandal. Federal investigators have accused Birmingham, Ala.-based HealthSouth of overstating earnings by at least $2.4 billion to meet Wall Street expectations.

Soon after the allegations were announced in March, chief executive Richard Scrushy was fired. The Securities and Exchange Commission is investigating Scrushy for alleged insider trading. No criminal charges have been filed against him.

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Venture capital investment up

The health care sector attracted about $1.1 billion of venture capital in the second quarter, according to Growthink Research, a Venice. Calif.-based research firm.

The $1.1 billion represented about 26.1% of all venture capital invested in the quarter ended June 30, Growthink Research said. About 61% ($670 million) of the $1.1 billion went to biotechnology and pharmaceutical companies; 32% ($352 million) to medical devices companies; 6% ($67 million) to medical software and services companies; and 2% ($19 million) to diagnostic/patient care companies.

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New name for Palm

Palm Inc., which is dividing itself into two businesses, will change its name to palmOne Inc. after it completes the spin-off of the software division, PalmSource Inc., in the fall. The hardware company, palmOne, also expects to complete its merger with Handspring Inc., which makes handheld devices and smart telephones, around the same time.

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