Appendix K -- Arbitration Mechanics -- of Centocor Agreement to Stay Sealed Until 2017

Remember how I was asking after the terms of Appendix K, in the original Centocor Schering-Plough Remicade/Simponi Distribution Agreement? Sure you do.

Appendix K sets forth the procedural mechanics that govern any manditorily arbitrated dispute between the parties. It was redacted from the original filing, in February 2004. Just now, the SEC extended, by administrative order, the confidentiality of that Appendix (and several other portions of other sections, from the Centocor agreement), until December 20, 2017. Gee -- that's a long time.

So, we won't know exactly what happens in any potential arbitration, until either J&J tells us, or it is all over -- and a decision has been announced. I am not sure that the idea of "Schering's confidential commercial or financial information" should really trump a public company investor's right to receive all material information -- about an investment decision (here, whether to vote for, or against, the proposed Merck-reverse merger). It would seem a rather important consideration, in assessing the probabilities of whether J&J will ultimately prevail in reclaiming the perhaps $3 billion to $4 billion a year in Remicade/Simponi rights, outside the United States.

On the other hand, perhaps J&J will, sua sponte, decide to tip its hand, for some perceived business advantage (and explain how CEO Weldon sees the arbitration mechanics of Appendix K playing out) -- and with it, give the investors a sense of what any arbitration might hold. We'll see. From the SEC's Order, then:

. . . .Schering-Plough Corporation submitted an application under Rule 24b-2 requesting an extension of a previous grant of confidential treatment for information it excluded from the Exhibits to a Form 10-K filed on February 26, 2004.

Based on representations by Schering-Plough Corporation that this information qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. 552(b)(4), the Division of Corporation Finance has determined not to publicly disclose it. Accordingly, excluded information from the following exhibit(s) will not be released to the public for the time period(s) specified. . . . through December 20, 2017. . . .