Update: Merck faces Johnson & Johnson rights obstacle

Documents filed with the US Securities & Exchange Commission give the timetable and conditions by which Johnson & Johnson could try to cancel its partnership with Schering-Plough for sales of the blockbuster anti-inflammatory drug Remicade and of golimumab, a newer version in development.

 

They show that Johnson & Johnson, which developed the two drugs through its subsidiary Centocor, can seek mandatory binding arbitration after 20 days’ notice if it considers there to have been a change in control at Schering-Plough.

 

Withdrawing the rights outside the US and Asia from Schering-Plough of Remicade would mark a sharp blow to Merck’s acquisition by reducing annual sales by more than $2bn and sacrificing sales forecast after launch in 2010 of golimumab of a further $1bn.

 

Bankers on Tuesday indicated that Merck might have to offer first refusal rights of Schering-Plough’s animal health products to Merial, Merck’s joint venture with Sanofi-Aventis of France.