Merck sells 50% interest in JJMCP joint venture

MerckSep 29 2011

Merck (NYSE:MRK), known outside the United States and Canada as MSD, today announced that the company has sold its 50 percent interest in the Johnson & Johnson--Merck Consumer Pharmaceuticals Co. joint venture (JJMCP) to Johnson & Johnson (J&J) affiliates, McNEIL-PPC, Inc., McNEIL MMP, LLC, and Johnson & Johnson, Inc. The venture between Merck and J&J was formed in 1989 to develop, manufacture, market and distribute certain over-the-counter (OTC) consumer products in the United States (U.S.) and Canada.

Merck decided to sell its interest in the joint venture to enable the company to fully focus on building the long-term growth prospects of the wholly-owned consumer products division that had been part of Schering-Plough Inc. prior to the 2009 merger. Under the agreement, Merck will receive a one-time payment of $175 million. Merck's rights to the Pepcid brand outside the U.S. and Canada are not affected by this transaction. Termination of the JJMCP venture also gives Merck greater freedom to operate in the OTC consumer sector, allowing Merck to fully exploit its pipeline of Rx-to-OTC switches as well as actively pursue OTC licensing activities in the U.S. and Canada.

Following the transaction, J&J will own the venture's assets which include the exclusive rights to market OTC Pepcid, Mylanta, Mylicon and other local OTC brands where they are currently sold in the U.S. and Canada. The partnership assets include a manufacturing facility in Lancaster, PA.