Basilea awarded $130 million in breach of contract arbitration with Johnson & Johnson; updates on isavuconazole program

Switzerland-based Basilea Pharmaceutica (SIX: BSLN) announced yesterday that a Dutch arbitration tribunal has found US drug major Johnson & Johnson (NYSE: JNJ) in breach of its license agreement with the company. The tribunal awarded Basilea around $130 million as compensation for lost payments related to ceftobiprole, including milestones, other damages and interest, which is immediately enforceable.

The tribunal at the Netherlands Arbitration Institute has found Johnson & Johnson, Johnson & Johnson Pharmaceutical Research and Development, and Cilag GmbH International [collectively J&J] in breach of its agreement with Basilea, which caused the rejection of ceftobiprole, a novel anti-MRSA broad-spectrum antibiotic, by health authorities (The Pharma Letter February 22). Basilea’s shares rose nearly 7% at one point but closed just 1% higher at 68.45 Swiss francs on the news, while J&J slipped 1% to $61.67.

"This award in our favor has validated our grounds for arbitration," said Anthony Man, chief executive of Basilea. "Ceftobiprole is a very innovative drug. It has activity against a wide range of bacteria, including MRSA and many Gram-negative pathogens, that no other single antibiotic can currently provide. Patients are dying from serious resistant bacterial infections in hospitals. This is a very unfortunate situation in which patients have not been able to access this potentially life-saving drug. We are pleased that we will gain full control of the development and commercialization of ceftobiprole. We are now focusing on completing the return of ceftobiprole to Basilea at the latest by February 2011 so that we can move forward with its future development and make this important drug available again to patients as soon as possible," Dr Man added.