Merck Gets $175 Million from J&J Joint Venture Sale

Merck announced today that they are removing themselves from participation in a joint venture called “Johnson & Johnson Merck Consumer Pharmaceuticals.”

Merck had a 50% interest in the venture with Johnson & Johnson (J&J) and the company said it has sold it to a pair of J&J affiliates named McNEIL-PPC, Inc., McNEIL MMP, LLC, as well to Johnson & Johnson, Inc. itself.

The joint venture originally began in 1989 to develop, manufacture, market and distribute certain over-the-counter (OTC) consumer products in the United States and Canada according to the company.

The sell on part of Merck is a focus-shift within the company.  Prior to the merger with Schering-Plough Inc. in 2009, Merck had been making headway into the consumer products arena.  This is something that Merck intends to refocus on and believes that they will be able to emphasize more attention to by not dealing with their former joint venture with J&J.

Merck will receive a one-time payment of $175 million dollars from J&J and their affiliates and will retain the rights to the Pepcid brand name.  Merck reiterates that by not being part of the joint venture that they believe it will provide them with an increased OTC outlook in the future, including licensing and exploitation of their Rx-to-OTC switches.

Merck is not the only company coming out of the deal with branding rights.  J&J will also have rights to market Pepcid, Mylanta, Mylicon and other brand names.  J&J will also walk away with a manufacturing facility in Lancaster, PA.