Thursday, May 21, 2009

Could Schering-Plough's "Company X" Suitor Have Been Johnson & Johnson?

UPDATED -- 05.21.09 @ 4:40 PM EDT: WSJ confirms.

There will be nothing official, that is certain. But, I submit this -- for the readers' consideration -- tell me why these things don't make it more likely than not, that "Company X" is led by CEO William Weldon -- as the shy, and ultimately retiring, Schering-Plough (non-)suitor (archive Weldon letter, imaged at right):

First, the timing laid out in the "Background of the Transaction" section (at pages 48-55) suggests that someone (at Company X) got up to speed very-quickly, on Schering-Plough (based on public documents), then negotiated and signed a confidentiality agreement, in seven elapsed days, with Schering-Plough GC Sabatino. [And, that, in turn, suggests some very-tight guardrails (right down the middle of the Jersey turnpike!) -- consistent with the overlap in J&J & Schering-Plough businesses.]

Then, just ten days after a confidential information exchange meeting -- with Cox and Koestler, meeting their counterparts at Company X -- Company X formally bowed out. That was February 5, 2009.

On that day, and more importantly, on the day after, Johnson & Johnson announced intitial FDA filings for two indications -- on one of J&J's important home-grown drug candidates -- that's entirely consistent with a "go it alone" strategy being re-affirmed, right? Right.

Those drugs would be used to treat the same conditions as. . . wait for it -- Schering Plough's Saphris (Asenapine). They are for schizophrenia, and related schizoaffective disorders. Wow.

Fascinating, no?

Add to this that the Sunscreen Battle Royale only became litigation after the Remicade negotiations apparently bogged down. Okay. Who owns Neutrogena? That's right. Johnson & Johnson. And the complained-of advertising has been "out there" since 2007, "for more than two years" -- according to Neutrogena's lawyers. But Schering-Plough waited until near the end of April 2009, to file a Lanham Act suit (April 21, 2009).

Interesting timing, that.

So, even aside from the Remicade/Simponi thing -- it struck me that, on the morning of March 9, 2009 (when the reverse merger was announced), CEO Hassan said one of his first calls was from J&J CEO William Weldon. It was described by Hassan as "cordial".

I think it would make sense that Weldon's people found out what they wanted to know -- from Koestler and Cox, about Asenapine/Saphris -- and decided against an outright bid -- knowing that they could have the "most of the milk" (Remicade and Simponi) back -- without buying the whole cow.

So -- of course Weldon was "cordial". Now we are seeing his business-fangs -- presumably, after CEO Hassan's team declined to "be reasonable" about higher royalties on products outside the US, post merger. That's just my take. But it should be yours, too. . . .

Note that the poll, lower left, is runing about 3 to 1 in favor of J&J, as well. So, that nails it, right? Heh.

What am I missing here, folks? Do let me know -- I am an amateur scientist after-all -- and this is just a hypothesis, submitted for your dissection. Dig in.


Anonymous said...

Gee based on the timelines. I wonder if JNJ would pay me a consulting fee.


Condor said...

They certainly ought to, Salmon!

Good luck collecting it, though.

Seems Bill weldon had this all figured out -- from the jump.