Hassan sees Merck retaining Remicade

By Bill Berkrot and Ransdell Pierson

NEW YORK (Reuters) - Fred Hassan, former head of Schering-Plough Corp, said Merck & Co (MRK.N) is likely to prevail over Johnson & Johnson (JNJ.N) in its battle to retain overseas rights to the blockbuster arthritis drug Remicade.

"Personally, I feel good that Merck will be able to keep Remicade," Hassan said on Thursday at the Reuters Health Summit in New York, just four weeks after completing the $41 billion sale of his company to Merck.

Schering-Plough garnered $2 billion a year in overseas sales of Remicade under a long-term marketing pact with J&J. The deal required Schering-Plough to hand back the sales rights if it underwent a change of control.

But that requirement became clouded when the Schering-Plough/Merck deal was structured as a reverse merger -- which technically means Schering-Plough bought the larger company even though the combined company retained the Merck name and Merck's CEO.

J&J objected to the reverse-merger logic. An arbitrator is expected to decide the high-stakes matter.

"We had very good external advice; the case is good," Hassan said.

A victory for Merck would also allow it to retain rights to a newer once-monthly Schering-Plough arthritis drug called Simponi, which it had also sold overseas through its longstanding marketing deal with J&J.

Merck would not be greatly shaken even if it should lose rights to Remicade and Simponi, Hassan said.