J&J plays its Remicade card

It's official: Johnson & Johnson wants out. The drugmaker will ask an arbitrator to dissolve its Remicade partnership with Schering-Plough. Selling the almost $6 billion anti-inflammatory drug has been a joint effort between J&J and Schering for years, but now that Schering is merging with rival-slash-partner Merck, J&J has the chance to wriggle free. Obviously billions are at stake; Remicade brought in $3.75 billion for J&J last year and another $2.12 billion for Schering. 

Under the terms of the J&J-Schering partnership, their arrangement can be nullified if one of the companies changes hands. Though Merck and Schering structured their combo as a "reverse merger"--Schering is "buying" Merck, with the resulting company taking on the Merck name--J&J says it's within its rights to break the Remicade venture. Adding to the tension is the fact that full rights to a Remicade successor--Simponi (golimumab)--could revert to J&J as well.

In a filing with the SEC, Schering said it and Merck would "vigorously contest" any attempt by J&J to terminate the distribution agreement. Of course. But--heads up, J&J--given the uncertainty of arbitration, "the parties may choose to settle."

- read the Wall Street Journal story