Merck: Remicade/Simponi Arbitration To Be Conducted In September 2010

Once again, using the backwater disclosure method of issuing FAQs, instead of a press release or an SEC-filed Form 8-K material event disclosure form (in a page torn from legacy Schering-Plough's playbook on semi-buried material disclosures) -- in December 2009, New Merck projected late September 2010 as the date for conducting the arbitration with J&J's Centocor unit -- over the rights to continue selling Remicade and Simponi outside the United States (perhaps $4.8 billion in annual revenues in 2011, and beyond).

I think it fair to infer that New Merck is telling us, below, that there is little remaining chance of a negotiated settlement -- prior to the ultimate arbitrators' ruling. And that is material news:

. . . .With respect to the arbitration with Centocor, a wholly-owned subsidiary of Johnson & Johnson, the arbitration panel has recently been selected. Since the selection, the parties have met with the panel and the hearing in this matter has been scheduled for late September 2010. . . .

Depending on one's perspective, this could well be seen as a negative admission by Merck -- that it sees scant value in any negotiated settlement, and thus must roll the dice with the arbitrators. Now, as to the process. . . .

The general rule on disclosure is -- if the event is material -- the negative should be disclosed just as prominently as the positive. Recall that New Merck made several decidedly bullish pronouncements about its chances in arbitration in 2009 -- by press releases, and by SEC proxy statement filings. Curious that it would bury this disclosure, no?