Biotech Values

[DewDiligence]

JNJ bests MRK in settlement of Remicade dispute arising from MRK’s 2009 reverse merger with Schering-Plough:

http://finance.yahoo.com/news/Merck-and-Johnson-Johnson-bw-1776682481.html?x=0

The settlement has these main terms:

• JNJ gets a one-time cash payment of $500M from MRK.

• JNJ takes over the marketing rights and 100% of the net profits from Remicade and Simponi in Asia, Latin America, Canada, and the Middle East—territories that comprise 30% of MRK’s prior sales of Remicade/Simponi.

• MRK retains marketing rights to Remicade/Simponi in Europe.

• JNJ increases its share of net profits in MRK’s territory (Europe) from 42% to 50%.

All told, the settlement terms reflect MRK’s woefully weak case in arguing that its reverse merger with Schering-Plough was not a change of control for Schering-Plough. I pointed out the absurdity of this argument in #msg-38036981.