J&J ordered to pay Swiss biotech $130 million

A Dutch court Monday ordered pharmaceutical giant Johnson & Johnson to pay a Swiss biotech company $130 million for breaching its license agreement. Johnson & Johnson  had entered into an agreement five years ago to run the clinical trials for ceftobiprole, an antibiotic developed by the Swiss company Basilea to target “super bugs.”

The drug was denied approval by the Food and Drug Administration after it told J&J it was not properly overseeing those clinical trials.

Ron Scott, Basilea’s chief financial officer, said he would have rather had a drug on the market in 2008 than the $130 million settlement now, but the money validates the company’s grounds for attribution.

“It certainly is a decision in our favor,” Scott said.

A company representative said it hopes to have the drug compound and relevant data back from New Jersey-based Johnson & Johnson by February so it can conduct new trials and move forward in development.

George Chressanthis, professor of health-care management at Temple University, said the $130 million awarded for lost payments and damages probably isn’t fazing Johnson & Johnson, a $62 billion company, too much.

“The fine is secondary to really the reputational effect, and also what it says to regulators, physicians and patients about whether or not they have the right quality controls and whether or not they’re adhering to best practices,” said Chressanthis.

A spokeswoman for Johnson & Johnson said Monday it filed to terminate its relationship with the company in February 2009. She pointed out that several other claims for breach of contract made by Basilea were thrown out by the arbitration tribunal. The company has not made a decision about whether to appeal the decision.