We won't find out what happens to Merck's disputed Remicade rights until next year. The drugmaker's fight with Johnson & Johnson has been prolonged, leaving the open question of whether Schering-Plough lost its share in the blockbuster arthritis drug when it merged with Merck last year.
The initial arbitration hearing with J&J is over. But now, both companies will have the chance to submit new briefs to the three-judge panel and to make their cases at a final meeting in December. Previously, Merck had thought the panel would decide within 20 days of the first hearing. Now, J&J spokesman Bill Price says it will probably come during the first half of next year.
J&J started the fight last year after Merck agreed to combine with Schering-Plough in a deal designed to avoid triggering change-in-control provisions of the Remicade partnership. Under that deal, either partner would lose its rights to Remicade--and its successor drug Simponi--if it experienced a change in control. And those rights are worth a lot: Merck reported $1.3 billion in sales of Remicade for the first half of 2010, the Star-Ledger points out, and Simponi could be even bigger.
The arbitration panel could come up with a compromise deal that would allow Merck to keep its rights to the drugs, but under less favorable terms. But the panel could just as easily nullify the partnership, giving full rights back to J&J. As Reuters points out, it could even require Merck to pay damages. J.P. Morgan analyst Chris Schott told clients (as quoted by the Wall Street Journal) "anything other than a complete loss of the franchise would represent a positive" for Merck at this point.