As reported by WSJ, Merck says its arbitration hearing with J&J over the status of Remicade has ended. Now both sides will file final post-hearing briefs and make final arguments to the three judge panel that will make the ruling. A final ruling is now NOT expected until sometime in 2011 -- and that may not occur until sometime in the "first half" of 2011.
Originally, the judgment was supposed to be handed down within 20 days after the evidentiary hearing ended. Now apparently the decision and its announcement can be delayed by mutual agreement. To me, that sounds like both sides heard the arguments presented and can now sink their teeth into a negotiated settlement knowing the relative strength of their positions.
J.P. Morgan analyst Chris Schott wrote in a note to clients that Merck's partnership with J&J is worth about $2.50 per share for Merck, and "anything other than a complete loss of the franchise would represent a positive" for Merck shares. Look for Merck to best a "complete loss of franchise" outcome.
Posted by Bruce Lehr October 14th 2010.