Merck faces Johnson & Johnson rights obstacle

Johnson & Johnson, the US pharmaceuticals group, has a month to decide whether to try to claim back full rights over two pivotal medicines as a result of Merck’s US$41 billion planned takeover of Schering-Plough according to Financial Times.

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 $1 billion.

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.

All takeover news could have far-reaching implications for©the company’s©animal health divisions. Schering-Plough is the holding company of Intervet/Schering-Plough Animal Health. This animal health company was created after a takeover of Akzo Nobel’s health division Organon by Schering-Plough©in 2007. Belgian pharmaceutical company Janssen Animal Health is a subsidiary of©Johnson & Johnson.

Only two months ago, US pharmaceutical company Pfizer announced to purchase American animal health company Wyeth, which includes Fort Dodge Animal Health.

Related news item:
Merck and Schering-Plough announce merger©(March 11, 2009)©

Related websites:

Merial
Johnson & Johnson
Financial Times

Janssen Animal Health

Merck

Intervet/Schering-Plough Animal Health