We now know (courtesy of the preliminary S-4 filing with the SEC, this week) that on May 5, 2009, Bill Weldon, CEO of Johnson & Johnson, formally notified Schering-Plough CEO Fred Hassan that he, and J&J, would invoke the mandatory arbitration clause -- and seek the return of the international Remicade® and Simponi® distribution rights. Fascinatingly, on May 4, 2009 -- Abbott sued J&J, for patent infringement -- in the federal courts, in Massachusetts -- alleging that Centocor's recently-approved Simponi® (golimumab) infringed patents held by Abbott's Humira®. Was that fight "the straw that broke the camel's back", the very-next morning? Here's what I observed, that day:
. . . .Why do I mention all of these excesses of testosterone? Well, because I think these litigation "puts and takes" will at least marginally increase Johnson & Johnson's desire to seek the return of the non-US rights to Remicade and Simponi, from Schering-Plough (via the "change in Control" escape hatch). That (mandatory arbitration) is a slightly less-thorny path (for J&J) to secure an estimated $3 billion per year in incremental revenue, as compared to protracted dueling sets of opposing patent litigation proceedings, in two separate federal courts, half a continent apart. I actually expect that Abbott and Centocor/J&J will ultimately settle their respective differences -- working out reciprocal royalties, of some sort, on all US sales of each product -- but that, in turn may well reduce J&J's margins -- in the US -- on Remicade and Simponi.
And that is where the "rubber will likely meet the road" -- as CEO Bill Weldon drives toward Keniworth, thinking about all those Euros, Pounds-Sterling and Yen piling up on Remicade, and now, Simponi sales -- and being booked, on a consolidated basis, month-by-month, into K-1 (and very soon, now -- into Whitehouse Station). . . .
Indeed, it seems he acted on those thoughts, the very next morning.
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