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Basilea awarded $130m in J&J dispute

A tribunal in the Netherlands has awarded Basilea around $130m in a dispute with Johnson & Johnson about a partnership for antibiotic ceftobiprole

A tribunal in the Netherlands has awarded the Swiss pharma company Basilea approximately $130m in a dispute with Johnson & Johnson that arose after failures in the companies' partnership for the broad-spectrum antibiotic ceftobiprole, which is intended to treat MRSA and other infections.

The tribunal at the Netherlands Arbitration Institute found J&J in breach of the licence agreement for the drug, and made the monetary award to Basilea as compensation for lost payments, including milestone payments.

Basilea granted J&J's Cilag GmbH International an exclusive worldwide licence to develop, manufacture and commercialise ceftobiprole in early 2005. Under that agreement, all responsibilities for ceftobiprole clinical trials were transferred to J&J.

In 2009, Basilea submitted a request for arbitration under the licence agreement, arguing that deficiencies in the manner in which J&J had run the clinical trials programme had caused approval of the drug to be delayed in the US and EU.

Basilea has since gained back full control of the development and commercialisation of ceftobiprole from J&J and expects to complete procedures related to the return of the drug by February 2011, after which it will continue the product's development.

Ceftobiprole is a cephalosporin antibiotic that exhibits activity against a wide spectrum of Gram-positive bacteria, including MRSA and penicillin-resistant Streptococcus pneumoniae, as well as many clinically important Gram-negative bacteria, according to Basilea.

In December 2009, the FDA issued a complete response letter pointing to deficiencies in the marketing application for ceftobiprole for the treatment of complicated skin and skin structure infections and requiring two new clinical trials before the drug can be approved. Later that year, the FDA issued J&J a warning letter stating that the company had not adhered to regulations in conducting phase III clinical trials for the drug.

Then, in February 2010, European regulatory authories declined to approve the drug, stating that J&J had not conducted the phase III studies in compliance with good clinical practice at some study sites.

30th November 2010

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