Johnson & Johnson Common Stock (NYSE: JNJ) started Tuesday's trading on a negative note amid reports that the company has been directed by a Dutch tribunal to pay about $130 million as compensation to Basilea Pharmaceu (Swiss: BSLN.SW) for breaching a license agreement for a super bug antibiotic ceftobiprole. The company has already lost 0.47 percent in the day's trading till afternoon. The victory seems to have no effect on Basilea as it has also started Tuesday's trading on a poor note, losing 4.65 percent in the first half.
Johnson & Johnson has been directed by the Netherlands Arbitration Institute tribunal to pay the compensation immediately to Basilea which covers both lost milestone payments and damages. Basilea had filed the arbitration claim against Johnson & Johnson last year relating to delays in the drug's development. Johnson & Johnson, which was in charge of the trials for ceftobiprole and acted as Basilea's drug sponsor, had returned the rights to Basilea in February after the European and United States authorities decided not to support the drug citing doubts on the reliability of its trials. European health authorities claim that the trials did not follow satisfactory clinical practice at some sites and the drug should not be approved.
According to Johnson & Johnson sources, the arbitration panel had rejected various claims and allegations filed against it by Basilea.
Expressing his pleasure on the Dutch tribunal decision, Basilea's CEO Anthony Man said that the company expects to gain complete control of the development and commercialization of ceftobiprole by February 2011, and will try to make the drug available to patients at the earliest.
Basilea's CFO Ron Scott said that the drug has significant sales potential but declined to disclose the company's top sales estimate.
According to Helvea analyst Olav Zilian, Johnson & Johnson was expected to lose the fight but the compensation amount came as a surprise for the market.
