Johnson & Johnson just filed its SEC Form 10-Q, at 5:11 PM EDT, tonight -- and we learn that Schering-Plough has filed a formal denial of J&J's claims. We also learn that the parties are selecting the arbitrators. In this context, given the mechanics of Appendix K to the original Centocor agreement, we may fairly safely infer that each side has already chosen an arbitrator, and that those two arbitrators are now seaching for the "neutral" -- the arbitrator not affiliated with either side. I'll explain why, after the pull-quote.
At pages 34 and 35 of its Form 10-Q, J&J provides this update, on the reversion of Remicade and Simponi rights, worldwide -- now being arbitrated with Schering-Plough. Significantly, this is more detail than either Schering-Plough, or Merck provided, in the Forms 10-Q of each company:
. . . .In May 2009, Centocor Ortho Biotech Inc. (COBI) commenced an arbitration proceeding before the American Arbitration Association against Schering-Plough Corporation and its subsidiary Schering-Plough (Ireland) Company (collectively, Schering-Plough). COBI and Schering-Plough are parties to a series of agreements (the Distribution Agreements) that grant Schering-Plough the exclusive right to distribute the drugs REMICADE® and SIMPONI™ worldwide, except within the United States, Japan, Taiwan, Indonesia, and the People’s Republic of China (including Hong Kong) (the “Territory”). COBI distributes REMICADE® within the United States and also plans to distribute SIMPONI™, the next-generation treatment, domestically. In the arbitration, COBI seeks a declaration that the agreement and plan of merger between Merck & Co., Inc. (Merck) and Schering-Plough constitutes a change of control under the terms of the Distribution Agreements that permits COBI to terminate the Agreements. The termination of the Distribution Agreements would return to COBI the right to distribute REMICADE® and SIMPONI™ within the Territory. Schering-Plough has filed a response to COBI’s arbitration demand that denies both that it has undergone a change of control and that it will undergo a change of control upon the completion of the merger with Merck. The parties are in the process of selecting the arbitrator who will preside over the arbitration proceeding. . . .
As the bolded portion indicates, the process of selecting the three arbitrators is ongoing. Timelines from the agreement, and the governing rules -- in a moment. The relevant rule provides:
. . . .R-12. Direct Appointment by a Party(a) If the agreement of the parties names an arbitrator or specifies a method of appointing an arbitrator, that designation or method shall be followed. The notice of appointment, with the name and address of the arbitrator, shall be filed with the AAA by the appointing party. Upon the request of any appointing party, the AAA shall submit a list of members of the National Roster from which the party may, if it so desires, make the appointment.
(b) Where the parties have agreed that each party is to name one arbitrator, the arbitrators so named must meet the standards of Section R-17 with respect to impartiality and independence unless the parties have specifically agreed pursuant to Section R-17(a) that the party-appointed arbitrators are to be non-neutral and need not meet those standards.
(c) If the agreement specifies a period of time within which an arbitrator shall be appointed and any party fails to make the appointment within that period, the AAA shall make the appointment.
(d) If no period of time is specified in the agreement, the AAA shall notify the party to make the appointment. If within 15 days after such notice has been sent, an arbitrator has not been appointed by a party, the AAA shall make the appointment. . . .
Assuming that J&J's Form 10-Q disclosure was carefully vetted, and thus taking it as accurate, we may infer, from the reference to a singular "arbitrator" being selected, in the blue bolded sentences above, that the "neutral" is going to sit alone, when hearing the arbitration. That makes the selection of this person a particularly weighty matter -- perhaps a $3 billion to $5 billion matter. This could take a while -- as each side's arbitrator interviews and searches for a true neutral. We shall see.
6 comments:
Listen to this. FDA has issued a guidance to industry for assessing drug induced liver injury during development. Now there's really nothing new in there that hasn't been known since 2001. However it's nice that it's largely clearly laid out. Yet in spite of mentioning the importance of oxidative metabolites which cause hepatocelluar (but not things like N-formyl which may result in steatotic injury, and acyl glucuronides/sulfates which may cause cholestatic etc.) Drug metabolism is given short shrift. Including failure to mention the need for good mass balance studies. So why is FDA issuing it now?
FDA began seminars about DILI shortly after rezulin (troglitazone) and really kicked the profile up in 2005 about a year after duloxetine (Cymbalta - Lilly) was approved and I believe before the warning letter to prescribers went out. Now we have asenapine which appears to have concerns which were apparent during development. Plus from reviewing the background documents and specifically Dr. Zornberg's critique of serious AEs. Which from putting together time lines from the documents within the AC background package it appears that she was aware of this from the beginning and may have tried to intentionally misdirect and then interfere with other reviewer's detection of the issue.
In response to the why now? It's been my impression that one of the reasons and selection of timing for FDA guidance issuance is a problem that has occurred with a or several drugs and they wait until the pharmaceutical industry decides what they want to do and they also complete the development and get approval for all drugs with problems that were in the pipeline in the clinic. Since once they spend a lot of money in going forward from phase I they don't want anyone telling them no. The problem though is sometimes they know even before phase I and don't want to do the appropriate phase I studies until after they show proof of concept and then do an inadequate phase I mass balance simply as a regulatory requirement.
Salmon
Where can one find a comprehensive list of companies, their research investments amounts and the country of origin that is credible? (Not wikipedia) Thanks
Not at all comprehensive -- but here is a pretty reliable Canadian government PDF File -- covering at least seven post-industrial nations -- and each nation's spending (not broken out by company).
If you have a budget, I am certain IMS Health will be able to sell you very current, and extremely comprehensive company by company, country by country, sliced data.
For PhRMA's perspective (pro drug companies), see this -- Figures 12 and 13.
Hope this will (at least) be a start.
Namaste
Question is how much of Figure 12 is attributable to things such as 'expert medical advisors' and 'seeding' or other types of clinical studies not designed to be supportive of regulatory actions or purely scientific, (e.g. to understand mechanisms). Or are supportive of basic academic research etc. which are in truth more to support relationships or marketing.
Salmon
DING!
Right -- exactly, Salmon!
Namaste
Post a Comment