Merck (MRK) Settles with J&J (JNJ); to Make One-Time Payment of $500M; Affirms FY11 Outlook
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Financial Fact:
Restructuring costs: 545.6M
Today's EPS Names:
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Financial Fact:
Restructuring costs: 545.6M
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Merck (NYSE: MRK) affirms FY11 non-GAAP EPS outlook of $3.64 - $3.76, ex-items.
The announcement comes following the report that it has settled with Johnson & Johnson (NYSE: JNJ) and its subsidiary Centocor Ortho Biotech Inc., and reached an agreement to amend the distribution rights to REMICADE (infliximab) and SIMPONI (golimumab).
Under the terms of the amended distribution agreement, Merck's subsidiary, Schering-Plough (Ireland) will relinquish exclusive marketing rights for REMICADE and SIMPONI to Johnson & Johnson’s Janssen pharmaceutical companies in territories including Canada, Central and South America, the Middle East, Africa and Asia Pacific, effective July 1, 2011. Merck will retain exclusive marketing rights throughout Europe, Russia and Turkey.
The retained territories represent approximately 70 percent of Merck's 2010 revenue of approximately $2.8 billion from REMICADE and SIMPONI, while the relinquished territories represent approximately 30 percent. In addition, all profit derived from Merck's exclusive distribution of the two products in the retained territories will be equally divided between Merck and Johnson & Johnson, beginning July 1, 2011.
Under the prior terms of the distribution agreement, the contribution income (profit) split, which is currently at 58 percent to Merck and 42 percent to Centocor Ortho Biotech Inc., would have declined for Merck and increased for Johnson & Johnson each year until 2014, when it would have been equally divided.
Johnson & Johnson will also receive a one-time payment of $500 million in April 2011.
This agreement concludes the arbitration proceeding Johnson & Johnson initiated in May 2009, requesting a ruling related to the distribution agreement following the announcement of the proposed merger between Merck and Schering-Plough.
The announcement comes following the report that it has settled with Johnson & Johnson (NYSE: JNJ) and its subsidiary Centocor Ortho Biotech Inc., and reached an agreement to amend the distribution rights to REMICADE (infliximab) and SIMPONI (golimumab).
Under the terms of the amended distribution agreement, Merck's subsidiary, Schering-Plough (Ireland) will relinquish exclusive marketing rights for REMICADE and SIMPONI to Johnson & Johnson’s Janssen pharmaceutical companies in territories including Canada, Central and South America, the Middle East, Africa and Asia Pacific, effective July 1, 2011. Merck will retain exclusive marketing rights throughout Europe, Russia and Turkey.
The retained territories represent approximately 70 percent of Merck's 2010 revenue of approximately $2.8 billion from REMICADE and SIMPONI, while the relinquished territories represent approximately 30 percent. In addition, all profit derived from Merck's exclusive distribution of the two products in the retained territories will be equally divided between Merck and Johnson & Johnson, beginning July 1, 2011.
Under the prior terms of the distribution agreement, the contribution income (profit) split, which is currently at 58 percent to Merck and 42 percent to Centocor Ortho Biotech Inc., would have declined for Merck and increased for Johnson & Johnson each year until 2014, when it would have been equally divided.
Johnson & Johnson will also receive a one-time payment of $500 million in April 2011.
This agreement concludes the arbitration proceeding Johnson & Johnson initiated in May 2009, requesting a ruling related to the distribution agreement following the announcement of the proposed merger between Merck and Schering-Plough.
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